Hawaii’s Updated Integrated Resource Plan includes Robust Renewables and LNG

On August 26, 2014, the Hawaiian Electric Companies (HECO) submitted updated integrated resource plans to the Hawaii Public Utilities Commission (PUC). The resource plans for Hawaii Electric Light, Hawaiian Electric Power, and Maui Electric call for a resource mix by 2030 with nearly triple the current rooftop solar capacity and an overall generation mix of more than 65% energy from renewable resources. HECO anticipates the plans will reduce customer bills by 20%.

Key Details

  • Hawaii is heavily dependent on imported oil for electric generation and, as a result, has the highest retail electricity prices in the United States
  • The plans create a comprehensive strategy addressing several key factors under a long-term view
    • Distributed energy resources, including rooftop solar and demand response, play an increasingly important role in the proposed energy resource portfolio
    • For planning purposes, HECO outlined an increase in the minimum charge for all customers and a new service charge for new solar PV customers; any rate structure changes of this nature would be reviewed and approved by the PUC in a future regulatory proceeding
    • Expanding the use of energy storage will increase the ability to add renewables by addressing potential disruptions on electric grids caused by variable solar and wind power
    • Smart grid deployments will enable more customer service options, enhance reliability, improve integration of renewables, and allow customer to monitor and control energy use
    • Most oil-fired generating units will be converted to run on liquefied natural gas (LNG); older units will be deactivated and replaced by new LNG generators

Implications

The HECO IRPs have proposed a long-term strategy to transition to high penetrations of renewable energy. This is a step forward from the issue-by-issue debates that are being held in other parts of the country. Hawaii is a prime location for a comprehensive strategy as fuel costs—driven largely by imported oil—account for 70% of electric bills. This dynamic allows renewable investments in the short and medium term to lower rates over the long term.

More Information

This report is part of the Clean Tech & Sustainability Minute series. To view all featured Minutes, please click here.

View More

Contributing Authors

Paul Quinlan Clean Tech Manager

Welcome to ScottMadden!

Sussex Economic Advisors is now part of ScottMadden. We invite you to learn more about our expanded firm. Please use the Contact Us form to request additional information.