Wednesday, July 30, 2008

Under the agreements, HR BioPetroleum will be responsible for overall project management, including obtaining financing and construction and operation of the microalgae facility; Alexander & Baldwin will provide strategically located land adjacent to Maui Electric`s Ma`alaea Power Plant, to site the algae production ponds and processing plant, and may provide equity capital to the project; and Hawaiian Electric and Maui Electric will lead in determining the permitting and construction needs for piping to carry stack gases containing carbon dioxide, which the algae consume, from the Ma`alaea plant to an adjacent algae facility.

Construction of the commercial microalgae facility is subject to a variety of factors, including confirmation of algae performance data from HR BioPetroleum`s pilot and demonstration facilities, receipt of required regulatory approvals, formation of a special-purpose entity, project financing commitments and the signing of definitive agreements with Hawaiian Electric, Maui Electric and A&B.

Assuming these successfully occur as planned, the first phase of the commercial facility could be in operation by 2011.

"This innovative partnership can help move Hawai`i one step closer to securing energy independence and achieving our goal of having 70 percent of Hawai`i`s energy come from clean sources by 2030," said Gov. Linda Lingle. "There is no single source of energy that will break our dependence on foreign oil, but investments in renewable projects such as this are part of the comprehensive solution to provide energy alternatives for our state."

Microalgae have significant potential as an energy crop, with the prospect for very high levels of oil production per acre. When combined with other vegetable-oil crops that could be grown locally, such as jatropha or palm, algae could help meet the biodiesel feedstock needs for Maui, which now fuels about 85 percent of its combustion generation with petroleum diesel.

The Ma`alaea algae facility would be HR BioPetroleum`s first commercial plant.

"This agreement is a welcome step in HR BioPetroleum`s efforts to accelerate its proven technology toward commercial scale," said Ed Shonsey, HR BioPetroleum chief executive officer. "HR BioPetroleum has developed techniques to scale production and achieve at least a 50 percent improvement over the price per barrel of fossil fuel today, while mitigating carbon dioxide release into the atmosphere. This is tremendous technological progress as we seek energy solutions that also attack global warming," he added.

"Alexander & Baldwin has been producing renewable energy in Hawai`i for more than 100 years through biomass and hydroelectric generation at its agricultural operations on both Maui and Kaua`i, and today generates approximately 7 percent of the electricity used on each of those islands," said Allen Doane, A&B chairman and CEO.

"We are excited about the promise of algae as another renewable energy source, and look forward to the potential reduction in imported oil and greenhouse gas emissions it represents," Doane continued.

"Hawaiian Electric is very pleased to be part of this pioneering accord," said Mike May, president and CEO of Hawaiian Electric. "Along with many other initiatives in the works, this is another example of how successful partnerships can move Hawai`i toward a clean, renewable energy future we can all take pride in."

"As we move toward siting an algae facility next to Maui Electric`s power plant, we will meet more of our energy needs at home and also reduce our carbon footprint," said Dr. Karl Stahlkopf, Hawaiian Electric senior vice president for energy solutions and chief technology officer. "This project entails some uncertainly. Stepping forward to be a first implementer of a new idea always does. However, it unites the best of the new Hawai`i high-tech industry with two long established Hawai`i infrastructure companies in a unique partnership. We have good reason to be confident it will be a step toward energy self-sufficiency, not only for Hawai`i but for the nation and the world."

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