Tuesday, April 09, 2013
Liquefied Natural Gas (LNG) is a double-edged sword
By Henry Curtis
Ililani Media
Besides the fracking issue, if both HECO and Hawai’iGas import LNG
because of its low price, then HECO can use LNG to generate electricity, while
Hawai`iGas will ship it through their downtown Honolulu pipeline system.
The Hawaii Consumer Advocate notes that "HECO and Hawaii Gas,
formerly The Gas Company, are both
carefully studying the possibility of
importing LNG for electricity generation." The Consumer Advocate goes on
to say that "given this currently low price, LNG offers potential lower cost electricity generation
for Hawaii’s consumers.”
In other words, Hawai`iGas would rely only on LNG, so if the price of LNG
were lower than other fossil fuels, Hawai`i Gas could offer substantial price
reductions to its customers. Since HECO’s electricity prices would be based on
both high and low cost fuels, the total price of HECO’s electricity would not
change as much.
Commercial and industrial customers could rely on the Hawai`iGas pipeline
system to get gas delivered to their buildings. These customers could install
on-site combined heat and power
(cogeneration) units which can convert 90% of the energy content of LNG
to useful heat and electricity.
Commercial and industrial customers will also be able to choose to stay
attached to the HECO grid and to rely on utility generators which are 20-40%
efficient. Most of the energy content of the fuel burned in a utility generator
is lost as heat, either up the smokestack or out to sea through an outfall
pipe.
Many of these large users will find the Hawai`iGas option to be much more
desirable, and will severe their electrical connection with HECO’s grid.
HECO has fixed costs for all of their investments. These are divvied up
among HECO’s ratepayers. As large customers leave, those remaining will have to
pay higher rates to cover these fixed costs. As part of the Hawai`i Clean
Energy Initiative (HCEI), the Public Utilities Commission recently enacted a
decoupling mechanism which automatically raises rates to cover this
contingency.
As rates rise, more residential customers will install photovoltaic
systems and energy efficiency devices driving down their own individual bills.
The decoupling mechanism will kick in again, driving rates even higher
for those who are unable to install photovoltaic systems and energy efficiency
devices. More and more people will then self-generate.
Eventually HECO will collapse under its own weight.
Hawaiian Electric Industries (HEI), the
holding company which owns HECO, MECO and HELCO, has already informed the U.S. Securities and
Exchange Commission (SEC) about the possibility that self-generation will put
the utilities out of business.
Hawai’iGas is courting HECO as a
customer for LNG.
HECO, MECO and HELCO are currently involved
in a one-year Public Utilities Commission led process called Integrated
Resource Planning (IRP). The HECO Companies are in the process of developing a
5-year Action Plan and a 20-year Strategic Plan. HECO believes that their
generators could be converted to using LNG in 2020. Alternatively, they could rely
on locally grown biofuel.
The Hawaii Governor just gave state money to
a private interest to use genetically engineered microbes to convert various
crops, including genetically modified crops, into biodiesel. The biodiesel
could then be burned in utility generators to make electricity.
The installed price of photovoltaic systems is dropping 5-7% per year. The price of lithium batteries is also dropping. Thus solar/batteries might be the solution of the near future. As part of the IRP process, HECO has run hundreds of computer simulations, but not one has involved batteries.
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Comments:
There are other health problems associated with LNG. Those with respiratory & chemical disabilities would have major problems, never mind, "equal access" problems in public buildings. It's the same old problem, old men thinking in liquid petroleum terms instead of envisioning new technology.
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There are other health problems associated with LNG. Those with respiratory & chemical disabilities would have major problems, never mind, "equal access" problems in public buildings. It's the same old problem, old men thinking in liquid petroleum terms instead of envisioning new technology.
# posted by
: April 9, 2013 at 6:57:00 AM HST
: April 9, 2013 at 6:57:00 AM HST << Home
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