There’s been plenty of press about Hawaii’s first-in-the-nation policy of “100 percent renewable energy by 2045” but a lot less talk about what the law really means, especially its loopholes.
Let’s take a hypothetical example to start breaking down the math.
The state would actually meet its goal if half of the amount of electricity Hawaii consumed came from rooftop solar and the other half came from oil-burning power plants.
That doesn’t sound like “100 percent renewable energy,” but it would be under the law.
The law says each utility company that sells electricity for consumption shall establish a renewable portfolio standard of “100 percent of its net electricity sales by Dec. 31, 2045.”
There are additional benchmarks along the way, including 30 percent by 2020, 40 percent by 2030 and 70 percent by 2040.
The key is in how the percent is calculated. And that brings us to a fraction that defines the RPS.
“The simplest way of fixing the bill would be to say that in 2045 no electricity in the state shall be produced by fossil fuels.” — Henry Curtis, Life of the Land
The numerator (top number) of the fraction is the amount of electricity the utility generates from its own renewable resources plus the amount of renewable energy coming from rooftop solar and other on-site customer sources.
The denominator (bottom number) in the equation is the utility’s sales from electricity it produces from renewables and fossil fuels.
The law requires the numerator be at least as high as the denominator (100 percent), but the denominator can include fossil fuel sources.
That’s how it’s possible to meet the 100 percent renewable goal with 50 percent rooftop solar and 50 percent fossil fuels.
That’s also why it’d be possible to have more than 100 percent renewable energy under the law. The problems with this formula, along with concerns about what counts as “renewable,” make it likely that the Legislature will revisit the issue at some point.
For now, energy stakeholders are supportive of the law and say it’s setting the target that ultimately matters most in Hawaii’s effort to transition to cleaner energy sources.
Politicians, state regulators and utility executives have talked about Hawaii’s “100 percent renewable energy goal” with increasing frequency since Gov. David Ige signed the bill in June, particularly as the policy related to the proposed plan for NextEra Energy to buy Hawaiian Electric Industries in a $4.3 billion merger agreement.
Ige said in July that the Florida-based energy company is not committed to the transition to 100 percent renewable energy. NextEra officials have since made every effort to refute that, trying to assure the governor and others that they are serious about achieving or beating that benchmark.
Hawaii currently relies on fossil fuels for 90 percent of its overall energy needs, 74 percent for electricity generation alone, making it the most oil-dependent state and causing electric bills that are triple the national average.
In 2014, HEI’s three subsidiaries collectively provided electricity for 455,416 customers on Oahu, Maui, Molokai, Lanai and the Big Island — covering 95 percent of the state’s population. The total generation capacity was 2,936 megawatts, including 377 megawatts of customer-sited solar.
Regardless of what the Public Utilities Commission decides to do with the NextEra-HEI docket in the coming months, the 100 percent renewable goal will stand and either HEI or another entity will have to meet it (member-owned cooperatives and municipal-owned utilities are being discussed as an alternative to the investor-owned model).
‘Very Poorly Understood’
Henry Curtis, who heads the nonprofit Life of the Land, an intervening party in the NextEra-HEI merger case, has long harped on the issue of 100 percent renewable not necessarily meaning Hawaii will be powered 100 percent by renewable energy.
As he points out, the renewable portfolio standard could end up being 200 percent if Hawaii was hypothetically comprised of two units of energy, and one came from rooftop solar and the other came from solar power provided by the utility. (One rooftop renewable plus one utility renewable divided by utility sales equals two.)
“The RPS is a great standard for the industry,” Curtis said. “It’s very poorly understood.”
Setting the ratio aside, there’s also concern over the law letting certain biofuels count as renewable energy, which has been allowed since the renewable portfolio standards were first put in place 10 years ago.
The H-Power plant that burns Honolulu’s solid waste to create energy is considered renewable, for instance, even though the power comes from turning plastics and other trash into steam and there have been concerns about having a sufficient supply stream.
Still, for all the math and wiggle room the law creates for the utilities to keep burning fossil fuels while meeting renewable energy requirements, there’s less concern about its practical effects.
A clear direction was set for Hawaii, which can’t be undervalued, according to industry insiders.
State Rep. Chris Lee, who chairs the House Energy and Environmental Protection Committee and led the push to pass a bill creating the 100 percent RPS, acknowledged that biofuels are carbon-emitting sources and that the RPS ratio could allow for fossil fuel generation after 2045.
But he said mandating the goal has set Hawaii on a course toward much cleaner energy.
“What everyone expects this to mean is what it means in practice,” Lee said.
“I don’t think it’s realistic to assume that a utility is going to be able to get away with, say, building a new big fossil fuel power plant anytime between now and then because you have to plan ahead,” he said.
‘Folks Have an Expectation’
Hawaiian Electric spokesman Darren Pai said the company is fully committed to meeting the state’s energy goals and that the state’s RPS law is helping to point the way for the transition to clean energy.
“Over the years, the RPS law has changed along with our energy environment and we expect that evolution to continue,” he said.
Isaac Moriwake, an attorney for Earthjustice, said the important thing is that Hawaii set the goal.
“If there’s a loophole in the current law, let’s close it somewhere down the line,” Moriwake said.
“I don’t think it’s realistic to assume that a utility is going to be able to get away with, say, building a new big fossil fuel power plant anytime between now and then because you have to plan ahead.” — Rep. Chris Lee
Lee said there’s been a discussion in pretty much every sector of the energy industry about how the renewable portfolio standard will play out and whether there are definitions or other aspects of the law that will need to be changed.
“Folks have an expectation that Hawaii is going to be at 100 percent renewable energy by 2045 or sometime before then,” he said. “I actually think that’s the intent of everybody, of all the energy stakeholders. So I think for all intents and purposes it means the same thing.”
Former PUC Chair and state Rep. Mina Morita, who was instrumental in passing the original renewable portfolio standards a decade ago, said the way that the percent of renewables is calculated will have to be revisited, especially as the percentages get higher.
“I think the equation will change,” she said. “I think this is the simplest way to do it in the meantime.”
Curtis said it wouldn’t be complicated to change the law to remove the loophole that the current calculation allows.
“The simplest way of fixing the bill would be to say that in 2045 no electricity in the state shall be produced by fossil fuels,” he said.
Even if Hawaii does get to “100 renewable energy,” that too will require context since it’s only referring to electricity generation for homes and businesses. That only comprises about 28 percent of Hawaii’s overall energy needs, the bulk of which involve transportation by planes and automobiles.
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