Rising costs, construction woes hamper clean energy efforts in Hawaii

Global events have emphasized Hawaii's dependence on imported resources and created obstacles in the path toward statewide elimination of fossil fuels.

by Candace Cheung, Court House News, October 1, 2022

HONOLULU (CN) — As one of the states consistently ranked at the top of lists for highest cost of living, Hawaii is not much of a paradise to those at risk of being priced out. The rising costs of living in Hawaii are an indicator for how often residents are subject to the whims of foreign markets, supporting the state’s push toward sustainability. Clean energy in particular has seen significant efforts.

Hawaii’s only coal-fired energy plant shut down permanently Sept. 1, as part of the state’s ongoing commitment to clean renewable energy. The closure is a big step toward mitigating Hawaii’s contribution to climate change, but to Oahu residents’ dismay, the shuttering coincided with a concerning rise in electricity costs. Many have struggled to balance doing right for sustainability and the environment and their concerns over the added financial burden on a population already struggling.

The AES-run coal plant, which had supplied one-fifth of Oahu’s electricity since 1992, was the island’s top source of greenhouse gases, with 1.5 million metric tons of carbon dioxide released into the atmosphere per year. A bill passed in 2020 aimed to ban coal for energy production by 2023 and ensured that the plant would not continue to operate past its 30-year contract.

Its closure is a significant part of the state’s pledge to transition away from fossil fuels entirely and to 100% renewable energy by 2045. States like Oregon, which passed the nation's first law banning coal in 2015, and Washington state have also committed to eliminating coal plants within 15 years. Hawaii is only the first of these several states that have also passed similar laws prohibiting or restricting coal burning energy plants to fully implement the ban.

“Coal plants are old, inflexible, outdated technology that you can’t do anything with. It just provides power at the amount it does until it breaks. Whereas solar and batteries are more dynamic, flexible. They don’t have to be 24/7,” said Scott Glenn, the Aloha State’s chief energy officer. “We’re moving toward a portfolio of technologies and resources. We’re not looking to replicate the fossil fuel system with our renewable energy system. We’re looking for a renewable energy system to not only provide power and capacity, but to do a better quality of it. We get higher quality power, more reliable power from renewables than we do from coal.”

A slate of solar and other clean energy projects is in the works too, with estimated completion dates within the next several years.

In the meantime, however, Hawaii remains reliant on other fossil fuels for its electricity needs. Although closure of the coal plant means a significant reduction in harmful emissions, the islands are not yet able to move away from its dependence on foreign oil. Oahu's main electric utility, Hawaiian Electric now relies primarily on imported petroleum to power the island.

Hawaii holds the distinction of being, according to U.S Energy Information Administration data, the most petroleum-dependent state in the nation. Although a cleaner burning fossil fuel than coal, oil is more expensive.

In the month since the closure, Oahu residents have reported increases on their electricity bills, in a state that already claims the highest electricity rates in the U.S. Hawaiian Electric had initially predicted and warned for an $15 increase before the closure, amending that number to $9 as global oil prices dropped.

“This is a critical turning point in the long-term transition of Hawaii’s energy landscape. Unfortunately, the timing has converged with global events that are currently increasing the cost of electricity,” said Shelee Kimura, the president and CEO of Hawaiian Electric said in a statement released prior to the shutdown.

The utility has pointed to the ongoing economic fallout from the Covid-19 pandemic and the conflict between Ukraine and Russia, from whom Hawaii had received a portion of its foreign oil, as the cause of the fluctuating energy prices. After the embargo on Russian oil in early 2022, Hawaii had to source petroleum from other countries at higher costs that have been passed on to Oahu residents, some of whom have been reporting electricity bills nearly double their usual rates.

Energy leaders have also said the coal plant closure combined with the global events that led to higher oil prices and supply chain issues formed a perfect storm that has resulted in this rise in energy costs.

“Hawaii’s grid has always been primarily powered by oil, that’s not something new for us,” said Melissa Miyashiro, executive director of local environmental nonprofit Blue Planet, “So we’ve always been at the mercy of these volatile global oil markets. What we saw with the closure of the coal plant is really feeling that legacy of being dependent on imported oil for our energy. We really feel the spikes that happen globally.”

Supply chain issues have also affected the establishment of solar power farms throughout the islands. The state’s planned alternative energy plants have suffered extreme delays that have been attributed not only to unforeseen global circumstances, but also to permitting and contracting issues.

The Mililani Solar farm in West Oahu, capable of producing and storing 39 megawatts of energy, came online right as the coal plant was shutting down. Six other similar solar farms and battery systems aim to begin commercial operations within the next two years, with the Hawaii State Energy Office hopeful for the next solar plant’s launch by the end of this year.

Although these utility-scale solar projects have faced unforeseen delays, the transition to renewable energy has still been steadily chugging forward with smaller scale residential and business rooftop solar panel systems, which generated around 10 percent of the state’s total energy production in 2019.

“We’re doing a two-prong approach, where we’re have the grid scale, the big ones that sit out in the fields with the rows of solar panels and batteries lined up by it, and the other is rooftop home and business battery, at the individual level," Glenn said. "The system together helps feed power to the grid when the grid needs it and it also helps when the grid is down, provide power to the home.”

Although the state on average has reached 40% renewable energy under its renewable portfolio standard according to the Hawaii State Energy Office, Oahu lags behind other islands at around 33%, making it the most fossil fuel-dependent island. On the other hand, Kauai has arrived at around 70% renewable energy and is even operating at 100% for several hours in the day.

“They’re showing the world that achieving 100% renewable energy is possible. They’re structured as a utility cooperative, which I think has allowed them to be nimble in this transition. The island is more rural, so they have different available land space for renewable projects. It’s about adapting this vision of 100% renewable to the different islands in Hawaii,” Miyashiro said.

Kauai has not been affected by the ongoing supply chain disturbances in the same way as the rest of state. The island has instead experienced fairly level electric prices about equal to rates before oil prices surged worldwide. Kauai is the only island that doesn't rely on Hawaiian Electric for power; the county is instead powered by an electric cooperative.

“They aren’t exposed to the oil market. They’ve not only achieved the lowest electricity rates, but they also have a much more stable electricity rate, which especially helps low-income families and people who live on fixed incomes. This is directly related to their renewable energy production. We want all the islands to be able to get here,” Glenn said.

Kauai provides a glimpse into the model of sustainability that the rest of the state aims to reach. For many, the coal plant’s shutdown highlighted Hawaii’s continued dependence on off-island resources and makes the state’s push for sustainability even more pressing. Part of Hawaii’s commitment to sustainability includes food and agriculture security based on native Hawaiian methods, as well as environmental and economic independence.