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Panos: Sopogy's Demise is a Huge Victory for Honest Engineering and the Taxpayer
By Panos Prevedouros PhD @ 1:05 AM :: 5589 Views :: Energy, Tax Credits

Sopogy's Demise is a Huge Victory for Honest Engineering and the Taxpayer

by Panos Prevedouros PhD, FixOahu, April 24, 2014

Along with a trio of highly capable mechanical and systems engineers I spent dozens of hours poring over the specifics of the micro-concentrated solar power touted by Sopogy which shut down several months prior to this April 22, 2014 article.

Sopogy was told by numerous engineers that their Kona projections were absurd and violated the second law of thermodynamics.  Sopogy proceeded anyway with their original plan.

My multi-year effort was particularly painful because this incompetent technology had received the 2009 Blue Planet Foundation Award and my own Dean sat at the board of directors of BPF when this award was made. Keahole Associates, an Oahu venture of Sopogy, was promoted in University of Hawaii, College of Engineering literature.

Here is some of the 2009 hyperbole: "Sopogy is developing the next generation of high efficiency solar panels and energy storage technologies for Hawaii and the World.  Keahole Solar Power developed and constructed a 2 megawatt solar thermal project and is developing an additional 30 megawatts of fossil fuel free power.  Together his companies employ and support hundreds of green collar jobs and kept over $500 million in Hawaii’s local economy through energy savings. In addition his work has off-set over 2 million metric tons of CO2 emissions which is the equivalent of reducing 27,000 tankers of gasoline or eliminating the consumption of 4.6 million barrels of oil."

The most factual evidence suggests that throughout its existence, Sopogy generated 0.1 MW!  This is roughly equal to 50 modest solar installations on residential rooftops.  It took $20 million (yes million) of Hawaii technology tax credits to accomplish so little.

Sopogy is developing the next generation of high efficiency solar panels and energy storage technologies for Hawaii and the World.   Keahole Solar Power developed and constructed a 2 megawatt solar thermal project and is developing an additional 30 megawatts of fossil fuel free power.  Together his companies employ and support hundreds of green collar jobs and kept over $500 million in Hawaii’s local economy through energy savings. In addition his work has off-set over 2 million metric tons of CO2 emissions which is the equivalent of reducing 27,000 tankers of gasoline or eliminating the consumption of 4.6 million barrels of oil. - See more at: LINK

Sopogy is developing the next generation of high efficiency solar panels and energy storage technologies for Hawaii and the World.  Keahole Solar Power developed and constructed a 2 megawatt solar thermal project and is developing an additional 30 megawatts of fossil fuel free power.  Together his companies employ and support hundreds of green collar jobs and kept over $500 million in Hawaii’s local economy through energy savings. In addition his work has off-set over 2 million metric tons of CO2 emissions which is the equivalent of reducing 27,000 tankers of gasoline or eliminating the consumption of 4.6 million barrels of oil. - See more at: LINK

In 2010 is was announced that DHHL was about to enter into a (tragic) agreement with Sopogy. It would have cost taxpayers tens of millions of dollars to develop a 30 MW solar power plant.

Then in 2011, Sopogy won the APEC 2011 Hawaii Business Innovation Showcase award for Honolulu.

Throughout this period Sopogy CEO Darren Kimura was the energy darling of Governor Neil Abercrombie. The Gov would not grant me an appointment to talk about energy issues for Hawaii despite repeated requests. Of course his energy point man, Bryan Schatz is so pro "renewables" that logic and cost are not an issue.

Despite everything being stacked in favor of Sopogy, I summarized the analysis and warned DHHL that they should be cautious about this type of power plant and investment. The local media ignored my article. Only the Hawaii Reporter printed my opinion.

In January of 2013 the Hawaii Venture Capital Association gave Sopogy the 2012 HVCA Deal of the Year Award for a deal that (thankfully) went nowhere!

All these august bodies failed to do even minimal due diligence. For example they simply could have looked at HEI's Securities and Exchange Commission filings which list the power they purchase from power sources other than their own.  Sopogy's Kona power plant appears nowhere.

Before publishing my analysis in 2011, I met with Darren Kimura at the Pacific Club. I informed him that I can find no power sold to HELCO and he said that he'll furnish me data, although most of the power was used "internally."  Darren never got back to me.  It was clear to me that he was selling duds for millions.

On April 23, 2014 greentech referred to my 2011 article and commented as follows:

"Kimura and the company always seemed to be on hand to receive an award, bond, or tax credit in Hawaii but rarely could the firm be found making competitive energy, despite the CEO's claims.

"We have about 75 megawatts under contract and in the process of being deployed," claimed the CEO in a 2011 interview. In a much earlier interview he spoke of a 50-megawatt solar farm in Spain and $10 million per year in revenue.

"Even before the price of silicon photovoltaics plunged it was difficult to see how Sopogy could ever be competitive."

This is only one sample of international humiliation for Hawaii.

Several lessons were observed but likely were not learned, as follows:

1.  Good, honest engineering can reveal duds.

2.  Once a project (or company) is an engineering or economic dud, it will fail.

3.  The demise of Sopogy is fortunate because duds like it can become a tax supported scheme concocted by greedy rent seekers and enterprising politicians who also create legal supports for the schemes. For example Hawaii's PUC considered preferential pricing for concentrated solar power to make sure that the 30 MW Kalaeloa scheme would make money (while the taxpayer would get fleeced.)

4.  Media, politicians and environmentalists know nothing about engineering stars and duds, but they have bestowed upon themselves arbitrary decision wisdom  that determines winners and losers.

5.  Many people go along to get along, or do the wrong thing for money regardless of what the right, ethical or moral thing to do is.

6.  There was abundant "me too" or follower behavior and scarcity of prudent analysis and caution.

7.  The truth rarely comes out, or comes out after precious funds have been lost. In this case millions of tax dollars were lost at the Kona plant and large acreage in the Ewa plane was bulldozed.

8.  HEI, the parent of HELCO and HECO knew the facts about Kona's Sopogy plant but did not make any apparent public disclosures when DHHL was proposing a mega version of the Kona power plant. Worse yet, HECO ran a Sopogy television commercial repeatedly from 2011 to 2013, touting Sopogy technology and HECO’s commitment to ecology.

9.  Hawaii’s blind promotion of a sub-standard technology sets a bad precedent in an area were Hawaii already is weak.

10.  Nobody will likely be held accountable for the wasted tax credits or apologize for rewarding incompetence. Will there be an AD's inquiry of DHHL and HECO?

Many well-known people such as Governors Lingle and Abercrombie, Chancellor Virginia Hinshaw, Blue Planet Foundation's Henk Rogers, and Hawaii's only billionaire Pierre Omidyar have Sopogy egg on their face. But given that this is Hawaii, the Sopogy scandal will likely die off quietly and the charlatans will have the last laugh.

PS. The counsel of attorney and engineer Eric Beal is greatly appreciated.

  *   *   *   *   *

2011: Panos: Is Sopogy Hawaii’s Solyndra?

2011: Kalapa: Taxpayers suffer as ACT 221 Scammers laugh all the way to the bank

2012: Audit: State Gave Away $1B Act 221 Tax Credits Without Verification of Eligibility

2012: Running to Continue Act 221 Tax Credit Scams

 

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