CNBC: Sopogy, Hawaii’s Energy Future

March 16, 2011

By: Jane Wells

No state in the nation is as dependent on oil as Hawaii.

Oil fuels 90 percent of its power grid, and all that fuel has to be shipped in. Governor Neil Abercrombie estimates oil costs the state of 1.3 million people $7 billion a year.

So Hawaii has been investing heavily in alternative sources of power, with a goal of getting 30 percent of all power from alternative sources by 2030, compared to about 10 percent now. Going green is a big theme here.

Even Hawaiian-born Pierre Omidyar, founder of Ebay [EBAY  30.78    0.83  (+2.77%)  ], is putting his money where his mouth is, as his charitable organizationsupports some sustainability projects.

But in Hawaii, NIMBY (not in my backyard) takes on a whole new meaning. When land is limited, the entire state is your backyard. Winning over the locals to the idea of wind farms and solar arrays in paradise takes patience and flexibility.

“I think it’s a great step forward,” says Carol Feinga, who helps head a community association in the town of Laie, on Oahu’s north shore. She’s talking about a new wind farm in nearby Kahuku built by First Wind, which will provide enough power to serve 7,700 homes. “For us to succeed and survive there are opportunities available for renewable resources,” she says in the shadow of the massive turbines.

But, so far, green power isn’t any cheaper, even with federal subsidies. “Right now we’re probably a little bit more expensive (than traditional electricity), but over a relatively short period of time, we’re going to be competitive,” says First Wind’s Chief Development Officer Kurt Adams.

His firm was able to build the new wind farm with a government loan, and Adams says that for the first time, a plant will combine turbines with a special battery system to smooth out volatility to the electrical grid caused by changes in wind velocity. Both the turbines and the batteries used here are built by American companies.

The Kahuku wind farm sits just out of view of the Turtle Bay Resort, but you can’t miss it if you’re driving on the main road. First Wind also operates a larger wind farm on Maui,  visible on the mountainside while driving from the airport to Lahaina.

The company would also like to build on Molokai as part of a plan to capture wind on outer islands and bring that power underwater to Honolulu, where it’s most needed. But locals on Molokai have not agreed on what land First Wind can use. David Murdock’s Castle & Cooke is running into similar problems on Lanai, where locals are pushing back against a wind farm that some feel will do more harm than good.

“Hawaiians have a very strong sense of their place,” says Kurt Adams of First Wind. “So we like to reach out to the community and spend a lot of time working with the community before we break ground.”

That’s something that Darren T. Kimura, CEO of Sopogy, already knows. His company is based in Hawaii, developing technology for concentrated solar power plants around the world, including one on the Big Island.

“The islands are separated, so every single island has its own grid,” he says, explaining the challenge of integrating renewable energy, with its intermittent nature, such as clouds over the sun. “Our technology incorporates storage, where we are able to basically buffer the effects of clouds.” Kimura says that with concentrated solar, a plant can store power to be used after the sun sets, “way up to maybe even midnight.”

He says solar power companies haven’t experienced the same pushback from locals that the wind energy industry has seen. Still, he’s heard complaints, like feedback on Sopogy’s solar collector called the SopoNova . “We heard from the locals here, ‘Wow, SopoNova’s really ugly’—and it did look ugly. We redesigned it, we designed the aesthetics of it to match the ground color for example, and we made it blend in with local topology.”

Such efforts pay off. Green energy has won over converts. “We lack sustainability,” says resident John Primacio of Kahuku, who’s become a fan of the wind farm. He was impressed that First Wind actually bought the land for the facility rather than leasing it.

“We interpret that to mean they’re going to stay here,” says Primacio. “They’re going to develop and continue providing wind energy. It can only help the endeavor to cut the state from buying oil.”

Star Advertiser: Sopogy thrives by thinking big

March 13, 2011

The high-tech company is using its expertise to compete globally

By Alan Yonan Jr.

POSTED: 12:30 a.m. HST, Mar 13, 2011

From its modest headquarters in an industrial area near Honolulu Airport, homegrown high-tech company Sopogy Inc. is taking on some of the world’s biggest names in renewable energy.

Launched in 2002 by local entrepreneur Darren Kimura, Sopogy has leveraged its expertise in the field of concentrated solar power to win contracts on the mainland and across the globe. Among its competitors are Siemens AG, a German conglomerate with a market capitalization of $116 billion, and Spain’s Abengoa SA, another multibillion-dollar firm.

Sopogy, which pioneered the development of “MicroCSP” technology, recently announced its biggest deal to date: the installation of 200 megawatts of generating capacity in China.

“Sopogy is a perfect example of a tech company that has hit a home run in Hawaii,” said Bill Spencer, president of the Hawaii Venture Capital Association. “Darren is a testament to how a technology company in Hawaii can seek out a global market and deliver. There are no boundaries if it is done properly.”

Sopogy’s patented system is a variation on an older solar energy technology first tested 30 years ago in the Mojave Desert. The Department of Energy oversaw the project near Barstow, Calif., that featured huge mirrored troughs used to concentrate solar energy and create steam that turned a turbine to generate electricity.

Kimura and his team took the technology, scaled down the troughs to one-fourth of the size and made other improvements that resulted in the systems being more mobile and less costly. Since completing research and development in 2005 Sopogy has installed six MicroCSP systems and has at least six more in the development stage. Project locations include Abu Dhabi, Mexico and Papua New Guinea.

The company has been growing at about 300 percent a year since 2005, but Kimura said he expects that to slow to a mere 60 percent to 80 percent annually in the coming years.

The 37-year-old Kimura, who launched his first company while a student at the University of Hawaii, has assembled an impressive management team that includes former Kamehameha Schools Vice President Michael Loo as chief financial officer.

Kimura remains chairman of the board of Energy Industries, an energy-efficiency consulting firm he launched in 2004 that now has offices across the western U.S., Hawaii, Guam and Japan.

“I can still say that all my companies are based here because that’s fundamental to what I do,” Kimura said. “I’m trying to develop an energy industry here that we can use to create critical mass.”

Kimura’s commitment to Hawaii, both through his business ventures and community outreach, will help pave the way for future local entrepreneurs looking to get ventures off the ground here, said Yuka Nagashima, president of the Hawaii Technology Development Corp.

“He’s very community oriented. He’s passing along his experience, and the more successful companies that Hawaii produces, the easier it will be for the rest of us,” Nagashima said.

“It helps counter the image of Hawaii as only a tourist destination.”

Sopogy was one of several Hawaii startups that benefited from a now-defunct state program known as Act 221 that provided tax breaks to investors who put money into local tech companies.

“It made people more willing to invest in Hawaii companies. That’s why I supported 221,” Spencer said. “We needed a way to get people to invest in Hawaii. At the same time, we have to have confidence in our entrepreneurs. We just needed to prime the pump,” he said.

Sopogy has 42 patents in various stages on its technology, Kimura said. One of the breakthroughs the company was able to achieve through its R&D was a way to use the heat from its solar collectors to turn a turbine without using steam. Standard CSP systems, as well as many oil-fired generators, use steam to turn turbines. But using steam requires a constant supply of fresh water. In addition, steam corrodes turbine blades, requiring frequent maintenance.

Sopogy’s system instead uses a thermodynamic cycle that achieves the same results without using steam, Kimura said. Parabolic mirrors made of polished aluminum are used to collect sunlight and focus it on a tube carrying a heat-transfer fluid, usually mineral oil. The mineral oil is heated to about 500 degrees Fahrenheit and pumped through an evaporator where the heat is used to vaporize a liquid refrigerant. The vapors turn a turbine that generates electricity. The mineral oil is then sent back to the mirrors to be reheated. The vaporized refrigerant is cooled and returned to a liquid state to be used again.

Sopogy also uses its MicroCSP technology to power air-conditioning systems using an absorption cooling process. The system works in much the same as a natural gas air-conditioning system.

In both systems, water is heated to temperatures just cooler than 200 degrees and collected in a storage tank. The water then goes through an absorption chiller that cools the cold water used in the building’s fan units.