Hawaii is famously reliant on imported fossil fuels, for
both electricity and transportation. But that’s changing rapidly as the state
invests heavily in renewables.
Two new bills are now pending in the Hawaii legislature that
would codify the 100 percent renewables goal statewide, up from the current
mandate of 40 percent by 2030. HB 623 would require 70 percent renewables by 2040 and
100 percent by 2050. SB 715 would require 70 percent by 2035 and 100
percent by 2050, but this bill is apparently languishing now while HB 623 is
still active. Both of these bills originally called for 100 percent renewables
by 2040.
Can the state realistically achieve 100 percent renewables
by then?
Hawaii’s transportation energy is still almost 100 percent
petroleum, but electric vehicle sales are growing fast. EVs are currently about 0.5 percent of all passenger vehicle
registrations in Hawaii, up from zero just a few years ago. So while 0.5
percent is an unimpressive figure, we must keep in mind the power of
exponential growth. That’s all I’m going to say about transportation; the rest
of this article will look at Hawaii’s grid mix.
Hawaii’s electricity mix today is still over 80 percent
fossil fuels, but again renewable energy sources like solar and wind are
growing fast. (This data, from EIA originally, is at least a couple of years
out of date, but it’s the latest I could find for statewide data.) HECO, the
state’s only private utility, which serves the major islands other than Kauai,
is at about 20 percent renewable energy as of the end of 2013,
including a mix of wind, solar, biomass and geothermal.
Hawaii’s electricity and natural gas rates are the highest
in the nation, so there is a strong economic incentive to get off fossil fuels,
along with the environmental and energy independence benefits.
HECO, the state’s sole privately owned utility company,
which provides power to all the main islands except Kauai, produced a major
report (the Power Supply Improvement Plan for each subsidiary utility) in 2014
looking at how it could achieve higher levels of renewables. HECO found that
the 40 percent by 2030 goal was easily achievable and the utility company could
in fact get to almost 70 percent by 2030, at a large net cost savings for
customers.
The Big Island, the second largest grid on HECO’s system (after
Oahu, which is by far the biggest) could get to over 90 percent by 2030 — also
at a net cost savings for customers.
That such a high level of renewables can be reached with net
savings is a remarkable conclusion. It is made possible by the dramatic
declines in costs for renewables, combined with the very high prices that
Hawaii electricity customers currently pay. Hawaii consistently has the highest
electricity rates and bills in the nation, making the state ripe for a renewable
energy extreme makeover.
With HECO showing that it can readily get to about 70
percent renewables by 2030, two things become apparent: 1) the two new bills
calling for 70 per cent by 2040 (ten years later than the utilities themselves
say they can get there) are lacking in ambition, and 2) it shouldn’t be much of
a stretch to get to 100 renewables by 2040 rather than 2050, as both bills now
call for.
In my years in energy law and policy, I’ve often seen bills
target goals that the market is likely to achieve by itself, and lawmakers then
take credit for helping achieve those goals (politicians live for credit, due
or not). I’ve rarely seen a bill that calls for a far less ambitious target
than the regulated entities themselves have stated publicly.
No one yet has done a detailed study of how Hawaii will get
to 100 percent renewables, but Mark Jacobson’s team at Stanford has done some work in
this area. In terms of policy planning, the Renewable Energy Action Coalition
of Hawaii (REACH) has written a white paper to
initiate such a process. We can, however, sketch an outline of how to get there
before any such study is completed. As with many of my previous columns, I’m going to rely on learning curve
models for various technologies and the power of exponential growth.
How will Hawaii achieve 100 percent renewables?
We can look to the declining cost curves for wind and solar
and see that the future is very promising for these technologies. HECO agrees
on this, but has also placed a lot of hope in liquefied natural gas (LNG) as a
better fossil fuel than bunker fuel or diesel, which it currently relies on for
most of its generation. Both are polluting and emit greenhouse gases. I don’t
understand HECO’s desire for LNG, since it’s just one more highly volatile
fossil fuel on which to become dependent.
Since wind and solar are variable resources (that is, the
wind don’t always blow and the sun don’t always shine), Hawaii will obviously
need significant backup power to balance the grid as these renewables reach
higher levels. We can be pretty confident that a mix of wind, solar, biomass
and geothermal can power the entire state of Hawaii. In such a future, the big
question becomes how we can balance the grid with a high penetration of variable
renewables.
There are two primary ways that renewable-energy-heavy grids
can be balanced:
Rely on the vestigial fossil fuel backbone to provide backup
power as required. Rather than retiring HECO’s fossil-fuel fleet fully as
renewables come on-line in a big way, the facilities that can run at night or
for frequency regulation will remain available. By using wind and solar power
when those facilities are available (which is a lot of the time, because wind
and solar are often complementary in that wind picks up when the sun goes down
in many parts of the islands), the grid can become majority renewable while
enjoying the stability that customers expect of modern power grids.
In the coming decade or two, Hawaii and all other modern
grids will be adding significant amounts of energy storage. Today, the focus is
on battery energy storage technologies, though historically, the focus has been
on lower-tech alternatives like pumped hydro storage and flywheels. Pumped
hydro could work in the islands, and has been considered in various locations,
but my money is on battery energy storage becoming pervasive, because we can
already see the cost curves for batteries declining sharply as production ramps
up around the world.
It’s also important to recognize that some renewables are
baseload, like geothermal and biomass. These are available in Hawaii, and the
Big Island of Hawaii is currently relying on 38 megawatts of geothermal.
However, the other islands don’t have access to geothermal, and biomass has
some environmental and resource supply issues. For the record, I don’t think
big inter-island cables are the way to for getting to 100 percent renewables.
Each island is fully capable of doing this with its own resources if the
process is well planned.
Balancing high renewable penetration with batteries and
electric vehicles
Germany and California are two examples of grids that are at
about one-third renewable energy already (California is closer to 25 percent
today, but is quickly heading toward the one-third mark). Both grids function
just fine without any dedicated backup power for variable renewables. Both
Germany and California are, however, developing battery energy storage options,
with Germany focused mostly on behind-the-meter solutions and California
focused mostly on front-of-meter solutions like utility-scale battery storage
and pumped hydro.
California is also looking at how to use the million or more
electric vehicles expected to be on the state’s roads in the next five years as
mini power stations. If just 10 percent of the million EVs expected to be
available by the early 2020s sign up for “smart charging,” over 1 million kilowatt-hours would be
available to curtail during charging, thus providing substantial grid support.
This amount will continue to climb as EV adoption continues to increase.
Why am I so optimistic about battery storage? Well, we’re
already seeing major learning curve effects in this space, and we should
continue to see substantial cost declines in the coming years. A recent
peer-reviewed study found that vehicle battery costs have declined,
on average, 14 percent per year since 2007. Industry leaders like Tesla and
Panasonic have seen less significant declines because they started out from a
place of higher efficiency.
Average cost declines for Tesla since it began manufacturing
have been 8 percent per year. If we see the same declines continue through
2025, today’s estimated $300/kWh cost for Tesla batteries declines to just $130
by 2025 and $37 by 2040.
This is a big “if” because there is no guarantee that costs
will continue to drop regularly like this. But we can have some faith in this
projection being close to reality because we can compare batteries to other
technology revolutions where related techniques/materials were used to keep
costs falling.
Stationary battery technology is a little different than
mobile technology, but the same cost trends will likely apply in both domains.
In terms of long-term cost trends, in the case of batteries, there are many
options for both stationary and mobile energy storage, including lead-acid,
lithium-ion, lithium-metal, lithium-air, flow batteries, and others. As today’s
lithium-ion technology reaches its theoretical efficiency limit, there are
other technologies that may take its place in terms of continuing cost declines
and efficiency increases.
It seems quite likely, then, that Hawaii will continue its
development of battery energy storage as costs come down and technologies
improve. HECO has already issued an RFP for 200 megawatts of battery storage on
Oahu. No winners have been selected for the RFP, issued in the first half of
2014, but dozens of developers submitted bids.
Battery storage is an almost ideal solution for balancing
the island grids as renewable energy penetration increases. Deploying
increasing numbers of batteries will allow the fossil-fuel backbone to
eventually shrink and ultimately disappear entirely.
Can this be done by 2040? That’s the million-dollar
question.
My feeling is that it can be done in Hawaii, particularly
because HECO has already shown that it can get to 70 percent by 2030 with
little difficulty, while also saving tons of ratepayer money. So even if Hawaii
gets to “only” 85 percent to 90 percent by 2040, the job is pretty much done at
that point. We don’t need to be fetishistic and insist on 100 percent, because
once fossil fuels are reduced to 10 percent or less, the harm they cause is
almost entirely mitigated.
Maybe this dance will end with a Mai Tai, after all.
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