Infrastructure & Environment

From Worst to First: Can Hawaii Eliminate Fossil Fuels?

The state is working toward becoming the first to get 100 percent of its energy from renewable sources. Getting there won’t be easy.
by | July 2016
Rooftop solar panels now sit atop roughly 12 percent of Hawaii's homes. (Shutterstock)

Ask Americans which state is the greenest, most unspoiled, most eco-conscious place in the country, and a lot of people would probably say Hawaii. So it may come as a surprise to learn that Hawaii is actually the most oil-dependent state in the nation. Because it’s unreachable by trains or pipelines, the state spends $5 billion a year importing oil. As recently as 2003, more than 90 percent of their electricity came from foreign oil. That’s not just bad for the environment; it’s bad for consumers: Hawaii residents pay the highest electricity rates in the nation.

That could all soon be changing, however. Thanks to sweeping legislation adopted last year, Hawaii has set a goal to become the first state in the country to generate 100 percent of its electricity from renewable energy resources. If it’s successful -- the 100 percent goal has a deadline of 2045 -- Hawaii would move from worst to first on clean energy.

 To call the plan ambitious would be an understatement. Getting to a completely renewable portfolio requires not only new investments and new technologies, but also a complete overhaul of the energy industry in the state. But the truth is that Hawaii has already made notable strides in reducing its dependence on fossil fuels. Thanks to a committed effort over the past 15 years, the state has decreased its dependence on oil by about 20 percentage points from that 2003 high.

The five islands boast a wealth of renewable sources, including solar, wind, hydropower and geothermal energy. The state is pushing forward with biogas waste-to-energy technologies, and is also experimenting with wave energy and ocean thermal energy conversion, which involves exchanging colder water with warmer water, creating enormous amounts of energy in the process. As of 2015, there were already 60 renewable projects underway across all the islands. These projects have the capacity to generate more than 150 million kilowatts per hour per month, which is enough to power almost 300,000 homes a year for the next 10 to 20 years.

Getting to a purely renewable portfolio isn’t just about power generation. The most direct way to reach that goal is to use less energy. And Hawaii’s made significant inroads there, as well. The state has aggressively implemented energy-efficiency programs, retrofitting state- and government-owned buildings with advanced cooling systems, LED lighting and other improvements. The measures have largely paid for themselves through the savings captured from installing such efficiency devices. Since 2008, Hawaii has reduced electricity consumption by 16.8 percent. Thanks to lower energy use coupled with an increase in renewables, Hawaii is already a fifth of the way toward its goal. “This isn’t some sort of empty promise where we’re picking a big goal and we’re trying to pursue it,” says Mark Glick, administrator of the Hawaii State Energy Office. “A long time ago, we went way past rhetoric.”

But is the state’s 100 percent green goal actually achievable? In technical terms, the answer is yes. “The necessary tools have been deployed commercially -- between electric vehicles and smart appliances and energy storage and lots of inexpensive rooftop solar -- to make this happen,” says John Farrell, director of Democratic Energy at the nonprofit Institute for Local Self-Reliance. “It’s not only technically possible, but economically feasible.”

“It’s absolutely doable,” agrees Bill Ritter Jr., a former governor of Colorado and the current director of the Center for the New Energy Economy at Colorado State University. As he told a crowd at the annual Maui Energy Conference in March, “it’s part of what the future of the world needs to look like.” The problem, he says, will be changing the way energy gets delivered. “No one is going to get to 100 percent without upending the utility model.”

And that’s where Hawaii’s story gets more complicated. It isn’t cost or technology that stands in the way of the 100 percent goal.  The real challenge is restructuring a legacy energy industry whose business model hasn’t changed in more than a century. As Farrell says, if Hawaii doesn’t reach its renewable energy goal, “it will be the utilities’ fault.”

Hawaii may be the only state with a 100 percent renewable goal, but many places have set aggressive standards of their own. Renewable portfolio standards are on the books in 29 states; in fact, just three days after Hawaii signed its landmark law, Vermont announced a plan to reach 75 percent renewables by 2032. California, New York and Oregon all have set goals to reach 50 percent renewables either by 2030 or 2040. In addition, several cities have committed to being fully renewable, including Aspen, Colo.; Burlington, Vt.; Georgetown, Texas; San Diego; and San Francisco. Private-sector companies like Google and Facebook have purchased carbon offsets and demanded utilities use renewables to power their server farms. Still, Hawaii’s extreme goal sets it apart. Back in 2008, in a historic agreement with the U.S. Department of Energy, the state set a deadline to be 15 percent renewable by 2015. It hit that target two years early, so lawmakers last year decided to push further.

Now, though, is when things get really hard, as the state must confront a difficult economic reality: As more and more Hawaiians adopt rooftop solar and other renewables, the electricity sector will make less and less money. Renewables can also add strain to the existing delivery infrastructure. Solar-generated electricity, for example, flows out of houses and into a power grid that was designed to carry energy in the other direction. Utilities often don’t have a handle on how many homes have rooftop solar and how much power those homes will be supplying to the grid, which has led to unanticipated voltage fluctuations that have overloaded circuits, burned lines and resulted in power outages.

“The entire business model of the electric utility is under such stress,” says Farrell. “For decades, the whole process was essentially: Energy demand rises, utilities build more power plants. But with the business model changing the way it is, all the innovation and entrepreneurialism is happening at the retail level and yet the utilities are really stuck on this notion of, ‘We control the system, and we should be the ones to do the changes.’”

Rooftop solar panels now sit atop roughly 12 percent of Hawaii’s homes, by far the highest proportion in the nation. That will only grow under the new law, so Hawaii needs its utilities to be completely on board. So far they have been. “We’re committed,” says Alan Oshima, president and CEO of the Hawaiian Electric Company (HECO). Many places “are setting renewable energy goals, but in Hawaii it isn’t just aspirational, it’s imperative.”

The utilities have been part of the state’s renewable plan from the beginning. “As important as the whole policy agenda was,” says Glick in the state energy office, “stakeholder consensus was just as crucial, if not more.”

But many critics worry that the utilities are still too entrenched in the old ways of delivering and charging for energy. For example, the state has had difficulty aligning its strategy with HECO. In April, the utility revised for a third time its power supply plan -- essentially, the road map detailing how the utility will comply with the state’s shift to renewables. Earlier versions had been rejected by the Hawaii Public Utility Commission because regulators said the utility had not “aggressively sought utility-scale renewable generation, addressed distributed resources, or justified its fossil fuel plans.”

At particular issue has been HECO’s proposal to supplement imported fuel with liquefied natural gas. The utility says it’s cheaper than oil. But Gov. David Ige opposes the idea, calling it a “distraction” from the 100 percent renewable energy goal. HECO has said the utility can meet the goal with or without liquefied natural gas, but that without it electricity costs could be higher.

Another major sticking point in the state right now is the possibility of a merger. NextEra Energy, based in Florida, has a $4.3 billion deal on the table to buy HECO. The merger is awaiting approval from Hawaii regulators, but it is wildly unpopular with environmentalists and some state officials. They point to Florida Power and Light, one of NextEra’s subsidiaries, which has donated millions of dollars to Florida lawmakers to squash solar programs in that state. HECO says a merger with NextEra would bring an influx of cash and expertise, making it easier to achieve the state’s energy goals. State regulators failed to meet a June deadline for voting on the merger. Meanwhile, say Farrell and others, the merger is the “elephant in the room” that’s delaying the state from implementing more renewable strategies.

Whether or not the merger goes forward, one thing is certain, according to the state: The future of Hawaii’s energy strategy requires a more interactive partnership between utilities and the state. “We all have to sit down in a room and set goals, review jointly the criteria under which decisions are made, and have much more open and transparent data,” says Glick. In other words, they’ll have to work in concert. Already, Glick says, the utility and the state are looking at new rate structures, new storage possibilities, and how to utilize advanced metering to help shift consumer demand for energy during peak usage times. That, he says, requires “a new planning paradigm where utilities can’t plan on their own.”

“There’s no question that there are big challenges to getting there,” says HECO’s Oshima. “But we’re working with everyone -- regulators, government, business, environmental advocates and customers -- to get the best ideas on the table while still fulfilling a commitment to provide safe, reliable and affordable service.”

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