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Lighting a fire under geothermal energy | Pacific Business News http://www.bizjournals.com/pacific/print-edition/2011/05/20/lig... From the Pacific Business News: http://www.bizjournals.com/pacific/print-edition/2011/05/20/lighting-a-fireunder-geothermal-energy.html Lighting a fire under geothermal energy Native Hawaiian firm builds on New Zealand business model Premium content from Pacific Business News - by Sophie Cocke, Pacific Business News Date: Friday, May 20, 2011, 12:00am HST While the development of geothermal energy in Hawaii has come to a near standstill since Puna Geothermal Venture’s 30-megawatt plant on the Big Island went online in 1993, executives at Honolulu-based Innovations Development Group have been busy developing geothermal energy in New Zealand. Utilizing what they call a “native-to-native” business model, the executive leadership, composed of prominent members of the Native Hawaiian community, say their success is based on their sensitivities to other native cultures. “The model recognizes the rights of indigenous landowners to participate and benefit in the development of its land and resource assets in an equitable way,” said Robbie Cabral, the company’s founder. “Further, the model is based on the premise that utilizing the land assets must be done in culturally appropriate ways.” In addition to Cabral, the company includes Patricia Brandt, former chief of staff to the chairman of the board of the Office of Hawaiian Affairs, and Mililani Trask, who served as an OHA trustee-at-large and as interim prime minister of Ka Lahui Hawaii, the Native Hawaiian Nation, for 11 years. More specifically, their business model gives indigenous landowners a seat at the table — a position on the project’s governance board and an equity stake in the project. As developers, they also focus on providing employment, job training and scholarships for the local community. According to Cabral, typical benefits for landowners can include up to 50 percent equity ownership in the project, a signing bonus of at least $1 million, an annual administrative budget of $200,000, project liaison jobs and $20,000 worth of educational scholarships for five years. The equity ownership can be secured through the transfer of land or development rights. 1 of 4 5/20/11 12:42 PM Lighting a fire under geothermal energy | Pacific Business News http://www.bizjournals.com/pacific/print-edition/2011/05/20/lig... The model has proven successful in New Zealand in working with the country’s indigenous Polynesian population, the Maori. The company was awarded the exclusive rights to develop geothermal energy on a Native Maori land trust in New Zealand in 2008, and has since enlisted the Eastland Group, based in Gisborne, New Zealand, as its technical and financial partner. The 50-megawatt project is intended to be completed over the course of about five years, with the first phase, totaling 12 to 15 megawatts, expected to be operational within 18 months. Executives of Innovations Development Group also are consultants to another geothermal project on Maori land that is being developed by Contact Energy, the country’s largest geothermal producer, and they hope to acquire another geothermal project in Rotorua, which the company would own. During the past fiscal year, the company grossed more than $1 million in revenue. If it succeeds with development plans for the 50-megawatt geothermal project, Innovations Development Group’s ownership in the project is estimated to be worth $40 million, Cabral said. Founded in 1998, the company initially hoped to develop a cultural theme park in Kapolei, but was unable to secure the land for the project. Two years later, at the invitation of the late Maori queen, Dame Te Atairaangikahu, members of the company participated in a cross-cultural economic summit that led to their role as economic advisers to several Maori trusts to assess and develop the lands’ resources. Executives say a key to their ability to work with New Zealand’s Native Maori people stems from their own experience in Hawaii in the 1980s and 1990s when heavy investments in geothermal energy development were pouring into the Big Island. The state and utilities had hoped to develop a 600-megawatt geothermal project that would transfer 500 megawatts of that energy to Oahu through an undersea cable. About $26 million in federal and state funding was expended on studying and designing the cable alone, as well as millions more in government funding and private investment in exploring sites for geothermal wells. However, local protests within the Native Hawaiian community, led in part by Trask, had a significant role in sidelining efforts. Concerns included the disruption of Native Hawaiian cultural and religious practices, particularly in relation to Pele, the Goddess of Fire, who is believed to live at the summit of Mount Kilauea. There also were community protests about noise and potential environmental impacts. Major plans for the development of geothermal resulted in only a 30-megawatt plant owned by Puna Geothermal Venture, a subsidiary of Reno, Nev.-based Ormat Technologies, which currently is expanding by eight megawatts. But plans to supply much of the Big Island’s energy needs from geothermal, and a significant portion of Oahu’s needs, never 2 of 4 5/20/11 12:42 PM Lighting a fire under geothermal energy | Pacific Business News http://www.bizjournals.com/pacific/print-edition/2011/05/20/lig... materialized. Now, years later, executives of Innovations Development Group are looking to bring their experience with developing geothermal energy in New Zealand back to Hawaii. Cabral said the company has several partners interested in developing geothermal energy in Hawaii and recently began holding community meetings with residents of the Big Island. They also plan to hold meetings on Maui. While geothermal energy has never been developed on the Valley Isle, Cabral said the company was planning to respond to Hawaiian Electric Co.’s request for proposals for firm energy on the island, which is expected to be issued soon. Donald Thomas, an expert in geothermal energy at the University of Hawaii, said there is still a lot of potential for geothermal energy, but more studies are needed, and location is an issue. “I think the prospects are still quite good,” he said. “It’s a question of where we want to focus our attention. There seems to be a desire to move away from the Kilauea east rift. And I certainly understand that desire rather than confining all development in one location. The idea is to limit the impact in any one community by spreading it out to other areas.” While HECO has struggled in developing the resource in the past, Lynne Unemori, vice president of corporate relations for the utility, said that, “where the resource is available and can be tapped with sensitivity to cultural and environmental concerns, we see geothermal as a very significant part of Hawaii’s clean-energy future.” As to whether Hawaiian religious practices would still be a problem in moving forward on geothermal development, Cabral said: “If Tutu Pele doesn’t want this, she has much bigger power than man. We will know — she will let us know.” Innovations Development GroupEnergy consultants CEO: Patricia Brandt Founder and Senior Adviser: Robbie Cabral Address: 2990 Pacific Heights Road, Honolulu, HI 96813 Phone: (808) 536-0434 Email: [email protected] Small-business issue Developing energy resources in environmentally and cuturally sustainable ways. Strategies • Bring owners of indigenous land and resources into the development process. • Ensure that the local communities are afforded economic benefits such as an equity stake 3 of 4 5/20/11 12:42 PM Lighting a fire under geothermal energy | Pacific Business News http://www.bizjournals.com/pacific/print-edition/2011/05/20/lig... in the project and shared profits. • Develop community benefits, such as a fund for educational scholarships and job creation. [email protected] | 955-8036 4 of 4 5/20/11 12:42 PM