In 2008, Kauai’s electric utility set an aggressive goal to power half the island with renewable energy.
The plan was so ambitious that no one knew exactly how it could be achieved. At the time, plantation-era hydroelectric plants accounted for about 8% of the island’s electricity production. The rest was powered by foreign oil.
It was also an expensive proposal. Solar technology was unaffordable for most homeowners back then and utility-scale solar didn’t exist yet in Hawaii.
But Kauai Island Utility Cooperative’s drive to untether the electric grid from fossil fuels was strong, rooted in a community-driven sense of duty to limit carbon emissions that contribute to climate change and a desire to shield Kauai from global oil market volatility.
“We had a board that didn’t need to have their arms twisted,” said Mayor Derek Kawakami, who led the strategic planning committee responsible for setting the co-op’s first renewable energy target as an elected member of the KIUC’s board of directors. “They were all parents and grandparents and I think in a sense they all saw the importance of moving in this direction.”
The strategy is paying off.
Last week Hawaiian Electric Co. warned that monthly power bills could increase by as much as 20% for residents of Maui County and the Big Island as a result of the U.S. ban on Russian oil imports, a political maneuver to inflict pain on the Russian economy as the country wages war on Ukraine. The utility predicts a 10% residential energy bill hike for residents of Oahu over the next several months.
On Kauai, where the utility grid is powered by the largest share of renewables in the state, residents are better protected from the whims of the oil market. KIUC predicts its 34,000 members’ energy bills could rise between 2% and 10%, or $4 to $20 per month for a residential member based on average electricity usage.
Roughly 70% of Kauai’s electricity grid is powered by renewables, which means the predicted oil price increases due to Russian sanctions would only apply to about 30% of the utility’s power generation.
By contrast, HECO’s renewable energy capacity stands at about 38%, but it greatly varies by island. Alternative energy powers roughly 33% of Oahu, half of Maui and 60% of the Big Island.
KIUC’s strong alternative energy investment means the utility can offer its members more dependable energy prices that people can budget around. As such, Kauai residents won’t get stung as badly as the rest of the state when they get their April electric bill.
“Kauai is absolutely how we all want to look,” said Jim Kelly, spokesman for HECO, which powers 95% of the state’s 1.4 million residents on Oahu, Maui, Molokai, Lanai and the Big Island. “They are now reaping the benefits of 10 years of slogging work to get these projects online. Where we all want to be is to have most of our energy coming from renewable resources on long-term, fixed-price contracts, not getting jerked up and down by the world oil market.”
Hawaii’s electricity prices are higher than nearly anywhere else in the nation. The burdensome cost of power, paired with the state’s plentiful sunshine, has made the islands a longtime leader in renewable energy adoption.
But the opportunities and challenges associated with transitioning to renewables greatly varies by island based on factors including population size, geography and natural resources.
Despite a smaller renewable energy portfolio, Oahu offers the lowest electricity prices in the state. The island benefits from its economy of scale, as well as a coal-fired power plant that powers roughly 15% of the grid. Coal has been cheaper than oil and renewables.
And although Oahu doesn’t have the sprawling acreage of Kauai or Maui to readily build industrial-scale solar farms, it leads the state in rooftop solar adoption with about 22% of homes functioning as mini solar power plants.
The Big Island’s renewable energy portfolio benefits from the availability of geothermal energy produced from hot magma. Notably, the island abruptly lost about 17% of its alternative energy capacity when the 2018 eruption of Kilauea Volcano’s east rift zone forced a two-and-a-half-year shutdown of Puna Geothermal Venture.
PGV is back online. But unlike most of the state’s green energy projects, the 1993 plant doesn’t shield customers from oil price surges. That’s because when the price of oil goes up, so does the amount the utility pays to PGV to buy power.
This is due to an old policy intended to encourage clean energy development that requires HECO to pay independent renewable power producers an “avoided cost” linked to the price of oil. It’s the cost the utility would have incurred if it generated the power itself.
Over the last decade, HECO has renegotiated several of these contracts to move away from the avoided cost structure and, in turn, lower customers’ electric bills. One such agreement with PGV that would lower the average person’s energy bill by about $13 a month awaits regulatory approval, according to HECO.
It’s not just about saving the planet.
When KIUC took control of Kauai’s electric utility in 2002 and established a member-owned cooperative, the cost per kilowatt hour to Kauai energy users was the highest in the state, roughly 70% more than the price of electricity on Oahu.
To close the gap, KIUC started bringing more renewables into its energy portfolio. Although oil-fired plants are comparatively cheap to build, they’re more expensive to operate due to fuel costs. As the utility’s renewable energy capacity grew, electricity rates stabilized.
Today Kauai has the second-lowest electricity prices in the state and, as of February, prices were only about 5% higher on Kauai than Oahu, according to Jan TenBruggencate, who joined the Kauai Island Utility Cooperative board of directors in 2010 and now serves as its vice chairman.
Going forward, TenBruggencate said the utility will need to make decisions about when to retire its oil-fired plants and how, in their absence, it can supply seamless renewable power when the weather delivers multiple cloudy days.
“In retrospect, it turned out that the first 50% or so of renewables was relatively easy in part because we had enough oil-fired power in the background to cover if we had (several) cloudy days,” TenBruggencate said.
Kauai is powered by one of only a few utilities in the U.S. that’s capable of running on 100% renewable energy most of the day.
But when the sun disappears at night the utility’s battery storage kicks in, covering a portion of the evening peak when many families cook dinner, shower and watch TV. Then the oil-fired generators fire up to meet the bulk of the island’s energy demand until morning.
Kauai’s energy portfolio currently includes 43% solar, 14% hydro and 11% biomass. Finding new alternative energy sources or improving energy storage capacity could be crucial to the effort to continue to phase out fossil fuels.
In theory, there’s great potential for wind energy on Kauai. But it’s been eschewed by the utility due to the threat of turbine blades on the island’s unique population of endangered native birds.
The University of Hawaii is studying the viability of wave energy, but there are many unknowns associated with the risks and logistics of harnessing ocean currents and waves into a new source of energy.
KIUC is currently developing an integrated pumped storage hydropower, solar and battery project: the first of its kind in the world. If it wins the necessary approvals, the West Kauai Energy Project could increase the utility’s renewable energy capacity to 90%, according to KIUC spokeswoman Beth Tokioka.
“We’re always looking to Kauai for leading the way on renewables,” said Melissa Miyashiro, Blue Planet Foundation’s executive director. “For us, they’re showing that this 100% clean energy future is possible.”
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