Hawaiian Electric Industries Announces ‘Mind-Blowing’ Solar-Plus-Storage Contracts

“It’s hard to overstate the scale of this announcement.”

Emma Foehringer Merchant January 04, 2019  greentechmedia.com

This week Hawaiian Electric Industries sent seven new solar-plus-storage contracts to state regulators. Six come in at record-low prices for the state, under 10 cents per kilowatt-hour.

The projects, which now await regulatory approval, would add 262 megawatts of solar and 1,048 megawatt-hours of storage distributed over three islands. The company said the projects will provide power “in place of volatile prices of fossil fuels,” which it quotes at about 15 cents per kilowatt-hour. 

AES, Innergex, Clearway and 174 Power Global are developing the projects.

Both the pricing and the size of the contracts are significant. 

If the state’s public utility commission approves the power-purchase agreement contracts, it would mean a big boost for the U.S. storage market. WoodMac currently logs 1.4 gigawatt-hours of energy storage installed in the nation, with just 75 megawatt-hours in Hawaii. According to Finn-Foley, HEI’s projects would nearly double what’s installed in the U.S. and grow Hawaii’s market exponentially. Taken together, the projects would also rank as the second-largest storage announcement ever, just behind the recently approved Moss Landing project in California.

But that’s not even the most thrilling part of this announcement for clean energy analysts. 

“What’s even more notable is the range of PPA prices,” said Finn-Foley. 

Past solar-plus-storage prices in Hawaii came in at 13.9 cents per kilowatt-hour in 2016 and 11 cents per kilowatt-hour in 2017. One of the projects announced this week by HEI is more expensive than the latter price — 15 megawatts of solar and 60 megawatt-hours of storage at 12 cents per kilowatt-hour. But another 90 megawatts of solar and 360 megawatt-hours of storage came in at what Finn-Foley called a “jaw-dropping” 8 cents per kilowatt-hour. That means that from 2016 to 2019 solar-plus-storage PPA prices in the state dropped by 42 percent. 

Will Giese, executive director at Hawaii’s Solar Energy Association, called the pricing “mind-blowing.” 

“With prices like these, it’s easy to understand the confidence of Hawaiian electric providers that their islands can hit 100 percent renewables ahead of the 2045 mandate,” said Finn-Foley. 

Though Hawaii still relies mostly on oil for electricity, it’s gaining on its goal to reach 100 percent renewables by 2045. In a statement released before the new year, Hawaiian Electric President and CEO Alan Oshima said that in 2018 the company made significant progress in pursuit of that target. 

“We have tremendous momentum as we move into 2019,” said Oshima. The contracts out this week suggest that momentum is already gaining speed.

According to HEI’s latest numbers, oil supplied between 58.52 percent and 79.02 percent of electricity in 2017, depending on the utility (HEI consists of utilities Maui Electric, Hawaii Electric Light and Hawaiian Electric). But that same year, average generation from renewables for all three utilities increased to 27 percent, up 1 percent over the previous year.

On Hawaii Island, renewable generation reached 57 percent. HEI is currently updating its numbers for 2018, but spokesperson Peter Rosegg said the volcanic eruption on Hawaii Island — which took out a 38-megawatt geothermal plant — means its renewable portfolio standard will be relatively unchanged. The company said it's still on track to reach its RPS milestone of 30 percent by 2020.

If the projects are approved, HEI said they will also help double current reductions in oil demand, with reductions totaling about 100 million gallons below 2008 levels.

Aside from the impact the contracts could have on Hawaii’s electricity landscape, WoodMac’s head of storage research Ravi Manghani said the unique PPA structures tied to some of the contracts signal overall trends for the storage industry. 

AES’s 25-year, 30-megawatt solar and 120-megawatt-hour storage PPA, for instance, uses a monthly “lump sum payment” to the developer based on net energy potential and facility availability, rather than energy delivered. 

“This will certainly start to become more mainstay for solar-plus-storage PPAs going forward,” said Manghani. “This reduces the curtailment risk for the developer, which is non-trivial in a market such as Hawaii, but also provides the utility a means to operate the combined solar-plus-storage asset almost like a dispatchable traditional asset in a cost-effective way.”

Marco Mangelsdorf of Hawaii’s ProVision Solar said the announcement indicates the state is on the path to achieving dispatchability for solar-plus-storage, with projects able to provide essential grid services and grid support to the electric utility.

“The grand takeaway for me is utility solar-plus-storage is hitting price points that we’ve been hoping and waiting for a number of years to make utility-scale solar-plus-storage competitive, and then some, with other forms of power generation,” he said. “We in Hawaii are on the cutting edge.”



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2018 Was A “Fulcrum Year” For Renewable Energy In The US

January 5th, 2019 by Steve Hanley  cleantechnica.com


The old paradigm that has been in place for 100 years was ushered out and replaced with a new paradigm that will prevail into the foreseeable future.

“2018 has been a turning point, as some utilities are beginning to make decisions based on the market of the future rather than that of the past,” says Howard Learner, president and executive director of the Environmental Law & Policy Center. The Midwestern states are ground zero for the transition to renewable energy. “In the Midwest in particular, renewable energy is a win-win for utilities and the ratepayers at this point,” says Travis Miller, director of utilities research at Morningstar.

Xcel Energy, based in Minnesota, has 3.6 million customers in 9 states. It began the transition by announcing a plan to transition to 100% zero emissions energy by 2050 — the first utility company in the US to make that a corporate goal. Economics has a lot to do with that decision. Wind power in the Midwest is abundant and inexpensive but solar farms are also springing up across America’s heartland.

But there is something other than the bottom line at work here. Ben Fowke, Ecel’s CEO, said at a news conference back in December, “We knew we could step up and do more, at little or no extra cost.” His remarks were spurred in part by the latest IPCC 6 climate report and the recent climate assessment published by the US government in November.

Consumers Energy, with 1.8 million customers in Michigan, announced a plan in June to transition to more solar power over the next 20 years. Until now, it has relied on coal-fired generating stations for most of its electricity. “Our vision considers people, the planet and the prosperity of our state and the communities we serve,” Patti Poppe, its CEO said at the time of the announcement.

Northern Indiana Public Service Company said last year it plans to close all of its coal-fired facilities within 10 years. It currently gets 65% of its power from burning coal. It says building new renewable energy resources simply costs less than keeping those coal fired plants open any longer.

Utility companies used to base their future plans on an expectation of rising energy demand. They could justify building new fossil fuel plants because the cost would be offset by selling more electricity. That is no longer the case as the demand for electricity has remained flat for several years. Not only is coal no longer competitive economically but natural gas has a history of fluctuating significantly in price.

“Utilities have to look at every investment as a multi-decade investment,” says Travis Miller of Morningstar. “We’ve seen enough commodity market volatility in the last two decades and enough environmental policy making in the last two decades that utilities are very hesitant to invest in very large legacy fossil fuel plants.”

Utility companies do not operated in a vacuum. They talk to each other and know what each other is planning. When companies like Xcel, Consumers, and NIPSCO decide to incorporate more renewable energy in their portfolios, it influences the thinking of other utility company executives — and public utilities commission members.

2018 was a fulcrum year for renewables because when people look back and try to determine when the shift to renewables in the US began in earnest, they will pick it as the year when a sea change occurred in the utility industry. Change never seems to happen. Then one day you look around and realize it is already here. The turn by utilities away from fossil fuels has begun and nothing will stop the transition until it is complete. 


Well, this is indeed interesting.  The ability to generate via solar or wind has been evident for several years.  The hurdle has been storage.  I’m surprised that storage batteries have advanced rapidly enough to now make renewable energy price competitive, even in an isolated location like the islands of Hawaii.  It will be interesting to see if they can actually deliver a reliable 24/7/365 source of power as proposed.  If they can, then, presumably, that can be replicated in many other locales.

I wonder what the ongoing cost of maintaining these facilities is going to be.  Back in the 70’s, the glory days of nuclear, the mantra was that once the power plant was built and operational, the ongoing costs would be too small to even measure and charge for.  Of course, it didn’t turn out that way.

Let’s stay tuned.

Agreed, Steve. Another step along the road.  The rate of incremental improvements in cost and efficiency is impressive.  Makes me wonder where we will be at the beginning of the next decade.  Probably much further along than even the more optimistic of projections.



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