REG lands second, larger Hawaiian bid

By Ron Kotrba | December 21, 2009
Posted January 6, 2010

Hawaiian Electric Co. signed a contract with a subsidiary of Renewable Energy Group Inc. to supply 3 million to 7 million gallons of biodiesel per year for two years, which will fuel Hawaiian Electric's new 110-megawatt combustion turbine generator unit at Campbell Industrial Park Generating Station.

REG won an earlier bid to supply biodiesel for emissions testing in the unit, and subsequently emerged as winning bidder out of eight companies. REG will supply biodiesel made from yellow grease and animal fats. Delivery could begin within about four months, after approval from the Hawaii Public utilities Commission with input from the state consumer advocacy group-standard operating procedure for such contract approvals.

This biodiesel supply arrangement, and others like it, can help offset some of the 600 million gallons of foreign petroleum burned in the U.S. for power generation each year, according to the Energy Information Administration.

While the company is pleased with this new supply agreement with Hawaii Electric, it noted the obvious right now-the biodiesel industry is faced with serious challenges due to the lapse of the federal blenders tax credit. New supply agreements are unlikely in the short-term, REG said, due to the marketplace disruption caused by the tax credit lapse.

REG manages a national network of biodiesel production with more than 300 MMgy of production capacity.
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