HECO, NRDC finalize biodiesel feedstock procurement policy

By Bryan Sims | October 16, 2007
Hawaiian Electric Co. (HECO) and the Natural Resources Defense Council (NRDC) have finalized a policy that will ensure that HECO's two electric companies in the state-Maui Electric and Hawaii Electric Light Co.-will only purchase biodiesel fuel produced from locally grown sustainable feedstocks and palm oil. These feedstocks would comply with international standards established by the Roundtable on Sustainable Palm Oil (RSPO), an international organization made up of more than 200 members who represent all factors of the palm oil industry.

According to NRDC Energy Program Codirector Ralph Cavanagh, conforming to the criteria set by the RSPO was a critical centerpiece behind the HECO/NRDC agreement. The new feedstock procurement policy with HECO is significant because more than 80 percent of the Honolulu-based utility company's electricity is derived through petroleum usage. The transition from petroleum to biodiesel use for electricity production would make HECO the largest user of biodiesel in the United States, Cavanagh said. "The effort here was to see if [HECO] could come up with criteria for procurement that would provide reasonable assurance of an environmental gain and still be commercially possible," he said. "We very much hope this will be a model for biofuels purchases by other utilities and indeed by all sectors."

Under the terms of the HECO/NRDC public process, the policy clarifies that in addition to procuring imported palm oil for conversion to biodiesel, HECO will also require that its suppliers and others in the supply chain be independently audited to ensure compliance with RSPO standards.

HECO, in partnership with Blue Earth Biofuels LLC, intends to build a 40 MMgy biodiesel production plant in Maui to supply the renewable fuel to Maui Electric Co., which uses diesel for about 85 percent of its electricity production. The project is slated for full operation by mid-2009. In addition, HECO has committed to using 100 percent biofuels at its new 110-megawatt electricity generator at Campbell Industrial Park in Oahu, which is slated to be completed in July 2009.

"Our commitment is to use biofuels, and what we really want to do is create a firm local market, which would really be the first step toward developing a thriving local agricultural energy industry," HECO spokesman Darren Pai said.

Initially, HECO will buy imported palm oil until the feedstock becomes locally available, according to Pai. Hawaii has about 140,000 acres that were cleared for agricultural use that are now fallow due to the decline of pineapple and sugar production. In addition to planting palm oil there, other feedstocks being considered include jatropha, coconut and kukui nuts, Pai said.
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