Ah, Hawaii. The palm trees sway in the tropical breezes, the volcanoes cast long shadows on beautiful white sand beaches, and diesel-fired power plants generate electricity at the highest prices in the country. Big things are afoot for the electricity system of this tiny U.S. state, though. This week, let Advanced Energy Perspectives take you on a Hawaiian vacation… or, well, we’ll discuss the changes in Hawaii’s energy mix and you can pretend you’re on a beach somewhere. Deal?
The Aloha State has always had an unusual energy profile. An isolated island chain in the middle of the Pacific, almost all energy resources must be shipped in at great expense. Currently, approximately 75 percent of the state’s electricity generation comes from imported oil. Hawaii’s indigenous energy sources include solar, wind, biomass, and hydroelectric power – and the island state is looking to make the most of them.
The state has its sights set on a lofty goal: 100 percent renewable energy before 2050. Two bills moving through the state legislature seek to put that goal into law. HB 623, which just made it out of committee, sets a goal of 100 percent renewable energy by 2045, provided that “extending the renewable portfolio standard [RPS] goals and transition to energy independence beyond 2030 shall be undertaken in a manner that benefits Hawaii’s economy and all electric customers, maintains customer affordability, and does not induce renewable energy developers to artificially increase the price of renewable energy in Hawaii.” HB 623 was preceded by SB 715, which passed the Hawaii State Senate in March. Largely identical to HB 623, SB 715 set the goal for 100 percent renewable energy for five years earlier, to 2040.
As Tam Hunt writes in Greentech Media, “Hawaii May Be Closer to Achieving a 100% Renewable Grid Than You Think.” Hawaii Electric Co. (HECO), Hawaii’s largest utility, projects that it can achieve 90 percent renewable energy by 2030. That’s ahead of the schedule outlined in the state’s current RPS, and right on target for the goal of 100 percent by 2040 or 2045.
HECO’s interests don’t begin and end with renewable energy, however. As the New York Times reported this week, Hawaii is at the forefront of the conflict between homeowners installing solar panels and the utilities being challenged to incorporate them into the energy mix. More than one in every 10 homes now has a rooftop solar system, much higher market penetration than anywhere else in the country.
Hawaii’s public utility commission (PUC) determined in 2013 that HECO was using a business model that did not align well with the needs of electricity consumers or public policy goals. If it did not change its ways, the PUC said, it would be “forced” to scrutinize utility expenditures, operations, and investments. After HECO and two other Hawaii utilities submitted updated integrated resource plans, the PUC indicated that they had not demonstrated “sufficient evidence [of] progress toward a sustainable business model.”
Since then, Hawaii’s major utilities have been purchased by NextEra Energy, America’s largest producer of electricity from solar and wind generation sources. The $4.3 billion merger, which has to be approved by the Hawaii PUC (application filed January 29th), FERC, and HEI’s shareholders, is expected to be completed by December 2015. The merger would put NextEra Energy and its primary subsidiary, Florida Power & Light Company (47% market share in Florida), together with all three of Hawaii’s operating utilities (with the exception of the consumer-owned Kauai Island Utility Cooperative) – Hawaiian Electric, Maui Electric, and Hawaii Electric Light. If approved, the companies would combine to serve over 5 million customers.
When discussing Hawaii’s energy mix, a phrase comes up again and again: Hawaii is a “postcard from the future.” NextEra Energy Chairman and CEO Jim Robo said it in a press release announcing his company’s purchase of HECO. Adam Browning, executive director of Vote Solar, said it in an interview this week with the New York Times. Holly Benz, Vice President of the Schneider Corp., said it during a session of the 2015 Maui Energy Conference. Anyone with an eye to the future understands that there are major changes afoot and a massive movement toward advanced energy. Perhaps Hawaii will get there first, and send us all a “Wish You Were Here.”
Back on the mainland (mostly), AEE members had a big week. Battery manufacturer Ambri was featured in Bloomberg Markets magazine’s “The $5 Billion Race to Build a Better Battery.” General Electric also announced that it would be rebooting its battery program. Next Step Living, which specializes in residential energy efficiency, announced that it had raised $12.5 million in new funding. And Texas-based CLEAResult has announced that it will acquire the assets of Conservation Services Group to form a powerhouse residential and commercial energy efficiency firm – and two AEE members will now become one!