Saturday, January 31, 2009

Gaining Host Community Approval for Renewable Energy Facilities

Local opposition to siting renewable energy facilities has the potential to derail Hawaii’s ambitious goals for converting to 70% renewable energy use by 2030. Power generating facilities of significant capacity (e.g., over 1 MW), such as large windfarms, solar photovoltaic arrays, and biodiesel conversion plants, can impact residents view planes, create noise, occupy large land areas from other uses, emit trace odors or fumes, etc. The State has partnered with the U.S. Department of Energy in the “Hawaii Clean Energy Initiative” (HCEI) to showcase Hawaii as a leader in renewable energy usage. Besides keeping $18 billion a year at home that would otherwise be spent for imported oil, achieving HCEI goals would create thousands of high-skilled “green collar” jobs. But implementation of these goals will require siting many new renewable energy facilities near resident communities across the State, so the big question now is, “How do we achieve these goals?”

A useful example of how to address potential local opposition due to siting impacts is the Payments for Ecosystem Services (“PES”) model developed by the United Nations Environment Programme (UNEP) and used in recent years by the World Bank and Asian Development Bank for siting infrastructure projects in environmentally sensitive areas in developing countries. The PES model is used to promote equitable benefit sharing and sustainable resource management with communities that host development projects that impact their environment. In the PES model, the ecosystem host community negotiates an equitable agreement with the project developer to share in the economic benefits of a project, as recompense beyond the usual considerations of facility design, operation, amenities, and impact mitigation.

In a similar manner in Hawaii, communities that are hosts to renewable energy power generating facilities that impact their environment can share in the benefits with the utility company or project developer. Benefit sharing can be readily implemented through the convenient vehicle of applying discounts to metered electricity rates for residents in the host communities. This approach, which I call “Metered Benefit Sharing”, allows host communities in effect to partner with the utility company or project developer by sharing in the economic benefits of renewable energy power generating facilities sited in their communities. By encouraging communities to become proactive consumers (“prosumers”), Metered Benefit Sharing can change the so-called NIMBY syndrome (“not-in-my-backyard”) into PIMBY (“put-in-my-backyard”) cooperation.

The State Legislature should give the Public Utility Commission statutory authority to study the use of Metered Benefit Sharing, which might be used to change the attitudes of host communities to enable widespread siting of renewable energy generating facilities within the 2030 timetable for achieving the State's ambitious renewable energy goals. While sharing in the economic benefits, Hawaii residents can do their part to reduce imported oil costs and supply risks for all energy users in the State and promote the economic health and sustainable future of the State as a whole. For developers and investors, the Metered Benefit Sharing model can mitigate or eliminate risk that a project will be derailed, giving them an incentive to participate in achieving the State’s renewable energy goals.