Hawaii utility regulators are pushing to keep new renewable energy projects on track even as the COVID-19 crisis stifles the state’s economy and developers warn that the virus is likely to slow down their attempts to build big solar projects needed to wean Hawaii from fossil fuels.
The Hawaii Public Utilities Commission is not only keeping its foot on the gas pedal; it’s pushing even faster, now envisioning big renewable energy projects as not just part of Hawaii’s effort to fight climate change but also as a key to helping the state recover economically.
“The Commission recognizes the severe economic disruption that is currently underway and likely to continue after the immediate crisis subsides,” the PUC says in a statement posted on its website.
It adds, “The State’s long-term energy transformation can help support near-term economic recovery and the Commission is encouraging opportunities where these important public policy objectives clearly align.”
By law, virtually all of the electricity sold in Hawaii must be generated from renewable resources by 2045. A main part of the plan calls for the utilities on Maui, the Big Island and Oahu, which are owned by Hawaiian Electric, to buy energy from third-party developers, which have been submitting bids to build big solar and wind farms and sell the energy to the company.
On Oahu alone, the company expects the new phase to result in 20 to 29 contracts with private developers and a total investment of $2.5 billion to $4 billion, including land costs. Projects are expected to occupy some 3,000 acres, the equivalent of 29 Aloha Stadiums. Hawaiian Electric officials have said there’s no plan to delay the announcement, despite the COVID-19 crisis.
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Plus, there are three more in development on Oahu: Hanwha Energy’s Ho’ohana Solar project in central Ohau and two being built by Clearway Energy, called the Waiawa Solar Power and Mililani I Solar projects.
In late March, the PUC asked developers of these projects for a status report in light of the COVID crisis. The results, as might be expected, were varied. But there was a common theme: the uncertainty surrounding the virus has created uncertainty about the projects, and even the milder updates had ominous qualifiers.
Clearway’s Mililani project, for instance, reported no delays, as it’s now negotiating contracts for things like engineering and construction work and equipment.
“As one of the largest and most experienced renewable energy developers in the country, Clearway is particularly well-equipped to weather an event like this,” the company said.
But it added, “continued extensions to shelter-in-place orders, however, increasingly make impacts on our industry and the broader global economy unavoidable.”
Some were already experiencing challenges. A case in point is AES’ Waikoloa project on the Big Island. The company indicated it hasn’t run into delays yet, but said that could happen – and lead to a cascade of additional problems.
But there’s one area where issues already have arisen for a company: AES was already a lightning rod for protests against another solar project on the North Shore.
The firm can’t do the type of community outreach it planned. Instead, AES told the PUC, it would shift to a “digital engagement strategy,” including online meetings, a website with current status updates, a social media platform, and a dedicated email address where people could contact AES Waikoloa.
“At this time,” the company said, “it remains unclear how the current or potential continuation of the stay at home order may affect public review and community engagement efforts required or desired by Hawaii County and other reviewing agencies as part of Project permitting or approval.”
Financing And Materials Could Dry Up
Ho’ohana expressed similar uncertainty, telling the commission that the company “believes there is a high likelihood that the current construction schedule may be delayed but is not in a position to know the extent of the potential delay at this time.”
At the same time, Ho’ohana did send a letter to Hawaiian Electric, saying the COVID-19 was a force majeure event under the company’s contract to sell power to Hawaiian Electric. Such events, often called “acts of God,” can let a party off the hook for certain contract obligations.
And the force majeure notice described how the virus could have effects in multiple aspects of development: from capital markets to supply chains to labor – nothing was certain, the company said.
“Under these extraordinary and unforeseeable circumstances, Ho’ohana may no longer be able to adere to the agreed project schedule set forth” in the contract, the company said.
Still, the PUC is holding fast.
In a recent letter to Hawaiian Electric, the commission said it recognized the uncertainty the virus has caused.
But it also asked Hawaiian Electric to expedite and facilitate the next step for these projects “particularly in light of the ability of clean energy development to ‘accelerate Hawaii’s recovery from this crisis.’”
Jim Kelly, Hawaiian Electric’s vice president for corporate relations, said the company is doing everything it can to keep the projects on track.
“We’re moving as fast as we can,” he said. “People are working from home, but the work goes on.”
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