We've heard so much about the Clean Energy Policy and the Hawaiian Electric Co. deal with the state Department of Business, Economic Development and Tourism, most recently at yesterday's Hawai'i Clean Energy Day. What do we need to do to make sure our energy startups survive in a post-Act 221 world of big capital competition?

LAVISH PROMISES

Gov. Linda Lingle told us that her energy initiative would not only address global warming and reduce oil dependence, but would also create a new homegrown energy industry in Hawai'i, an industry of local startups with lots of local participation, capital and jobs. We're not even close. Instead, offshore capital concentrations are being welcomed to build our most ambitious projects.

Sure, local solar companies such as Hoku and Sopogy have done some R&D in Hawai'i, but they are exceptions and not the critical mass of an industry. Hawaii BioEnergy has unlimited land from partners Grove Farm, Maui Land and Kamehameha Schools, but with that acreage, you would hardly call them a startup. We need an industry of energy startups.

CAMPBELL BIODIESEL

By definition, utilities are large-scale. HECO's $150 million 110-megawatt peaking unit at Campbell Park is almost finished. It was supposed to run on biodiesel from a processing plant by Imperium Renewables. But Imperium lost its financing, and its plant. Imperium will now have to ship in tons of palm oil via Seattle. This will cost HECO more, and it will cost us more, too.

The increase has to be approved by the Public Utilities Commission, and this may delay things. The Imperium contract will last two years, and HECO will soon be looking for more biodiesel. Local production from palm, jatropha and algae cannot yet satisfy HECO's requirements. But local biodiesel is significantly better for the environment and the economy, and we must preserve our prerogative against offshore competitors.

WIND AND SOLAR

Hawai'i cannot live on liquid fuel generation alone. Castle & Cooke plans to build 200 megawatts of wind power on Lana'i, and First Wind plans to build another 200 megawatts on Moloka'i. The undersea cable transporting that energy to O'ahu will cost between $500 million and $2 billion. Who will front that cost? Wall Street might invest, once it gets over the recession and Hawaii Superferry.

There can be smaller wind farms and solar rooftops, but they're not going to produce anywhere near the 1,100 megawatts necessary to meet the 2030 Clean Energy Goals. That doesn't mean we should marginalize them — taken collectively, they could make a magnificent contribution toward our energy needs. Even using existing technologies, their development will require substantial investment.

DISTRIBUTED ENERGY

To encourage people to feed the grid, HECO, DBEDT and the state consumer advocate submitted a "fast-track" feed-in tariff to the PUC. Seven months later, that tariff is not settled. Yes, we need biodiesel and big wind. But we also need the feed-in tariff, improved net metering and the PV host program. The PUC should get on with it — we need to get these programs started.

HECO is willing to buy distributed energy, but it's not going to produce or invest in it. A recent request for proposals called for 35 megawatts of photovoltaic generation on state buildings, but the response was weak, and industry may not be up to the offer. Large projects require strong bidders, but to strengthen the industry, first you need to build the startups.

CRITICAL SUPPORT

The $26 million DBEDT will get from the U.S. Department of Energy and the $7 million in the hydrogen fund is not enough. We need incentives for these renewables to level the playing field between foreign capital and local entrepreneurship. Otherwise, big capital — which has access to the administration and the ability to overcome environmental roadblocks — will dominate the field.

For Act 221, you had to do research. Energy startups may not require research to make their contribution. "Son of 221" should also include incentives for local energy startups that use existing technologies, with tax benefits, funding and a premium in the marketplace.

Kelly King of Pacific Biodiesel points out that "everyone talks about sustainability, but nobody wants to pay for it." The $1 a barrel tax helps — it will discourage use of fossil fuel, and 30 percent of it will be invested in local energy. Lingle should not veto this bill, and if she does, the Legislature should override the veto.

Given the decline of tourism, it's regrettable that we haven't done more. If we don't develop our local energy industry, offshore companies will eat our lunch. Over time, we'll realize what we've lost, but by then, it'll be too late.