A new agreement between Pacific West Energy and Kaua'i Island Utility Co-op (KUIC) in Hawaii looks likely to advance plans for a sugar-ethanol plant on Kauai, which could become the first sugar-based ethanol plant in the US.
Washington, US-based Pacific West intends to retrofit Gay & Robinson's Kaumakani sugar mill to produce 15 million gallons a year of ethanol and 30 megawatts of power by burning bagasse.
The proposed quantity of ethanol would supply about 35% of Hawaii’s current use, Maria Tome of the state Department of Business, Economic Development and Tourism says.
The bagasse-burning power plant would help the utility reach its goal of generating half its electricity with renewable sources by 2023, KIUC president Randy Hee says.
In a move to encourage local ethanol production, since 2006 Hawaii has required that petrol sold in the state include 10% ethanol.
A Hawaii tax credit of $0.30 (€0.21) a gallon of ethanol produced could yield $4.5 million a year for up to eight years. Additional federal tax credits expire in 2010, but are expected to be extended.
Financing for the project has grown to $125 million.
