Construction of the commercial microalgae facility is subject to a variety of factors, including confirmation of algae performance data from HR BioPetroleum's pilot and demonstration facilities, receipt of required regulatory approvals, formation of a special purpose entity, project financing commitments and the signing of definitive agreements with Hawaiian Electric, Maui Electric and A&B.

If these successfully occur, the first phase of the commercial facility could be in operation by 2011.

"This innovative partnership can help move Hawai'i one step closer to securing energy independence and achieving our goal of having 70 percent of Hawai'i's energy come from clean sources by 2030," Gov. Linda Lingle said in a news release.

"There is no single source of energy that will break our dependence on foreign oil, but investments in renewable projects such as this are part of the comprehensive solution to provide energy alternatives for our state."

Microalgae have potential as an energy crop, with the prospect for high levels of oil production per acre. When combined with other vegetable-oil crops that could be grown locally, such as jatropha or palm, algae could help meet the biodiesel feedstock need for biodiesel on Maui, which now fuels about 85 percent of its combustion generation with petroleum diesel, according to the release.

The Ma'alaea algae facility would be HR BioPetroleum's first commercial facility.

"This agreement is a welcome step in HR BioPetroleum's efforts to accelerate its proven technology toward commercial scale," stated Ed Shonsey, HR BioPetroleum chief executive officer.

"HR BioPetroleum has developed techniques to scale production and achieve at least a 50 percent improvement over the price per barrel of fossil fuel today, while mitigating carbon dioxide release into the atmosphere," he added.

"Alexander & Baldwin has been producing renewable energy in Hawai'i for more than 100 years through biomass and hydro-electric generation at its agricultural operations on both Maui and Kaua'i, and today generates approximately seven percent of the electricity used on each of those islands," Allen Doane, A&B chairman and CEO said in the release.

Mike May, president and CEO of Hawaiian Electric, said: "Along with many other initiatives in the works, this is another example of how successful partnerships can move Hawai'i toward a clean, renewable energy future we can all take pride in."

Karl Stahlkopf, Hawaiian Electric senior vice president for energy solutions and chief technology officer, said the facility could "reduce our carbon footprint." But he added, "This project entails some uncertainly. Stepping forward to be a first implementer of a new idea always does."