Hawaii is a state with an abundance of natural resources, such as wind, sun, running water, bioenergy, and geothermal energy. According to the Federal Energy Information Administration, 77% of Hawaii's energy comes from burning fossil fuels, mainly oil and some coal. With the state's goal of achieving 100% renewable energy by 2045, Hawaii must shut down its oil and coal plants early. Leo Asunción, commissioner of public services, explains that the traditional profit formula of the sector would have motivated the monopoly of the Hawaii utility company to do the opposite.
He states that they want to keep their plants running as much as possible because it is in their best interest. In order to accelerate the transition to 100% renewable energy, Hawaii has implemented an incentive system (and some sanctions). Kelly, from Hawaiian Electric, argues that other U. S.
utility companies should recognize that performance-based regulation is coming. The state has partnered with the Hawaii National Marine Renewable Energy Center, linked to the Hawaii Natural Energy Institute and the University of Hawaii, to allow manufacturers of wave buoys to test their designs. The deficit of 180 MW of capacity left by the closure of the plant cannot be immediately filled with renewable energy due to delays in the construction of new renewable energy projects. In many cases, solar energy is used to pump water “upstream” from the lower reservoir to the upper reservoir, making these facilities 100% renewable.
The state and several private companies are carrying out renewable energy projects, and residential solar energy supplies more and more energy to the state. Batteries that store excess renewable energy and are discharged when that energy is unavailable extend utility and improve the predictable availability of renewable sources. According to Hawaiian Electric, there are 19 more renewable projects in the pipeline for the next two years in the Hawaiian Islands, which will add more than 400 MW of solar capacity alone. Rather than encouraging utility companies to build, build and build, Potter says that regulators should incentivize new things such as energy efficiency and connecting renewable energy to the grid.
They agreed on things like adding more renewable energy to the grid and launching pilot projects for electric vehicle infrastructure. Even before the official launch of performance-based regulation, S&P and Moody's improved their rating for Hawaiian Electric. Diversifying Hawaii's energy mix by using more locally produced renewable energy at lower, more stable prices to produce electricity (and, when possible, for transportation) is the best way to help Hawaii use less oil. While Kelly argues that Hawaiian Electric was trying to get renewable energy up and running long before these reforms, he says they now have a specific economic motivation to connect solar energy to rooftops more quickly.
Consequently, Hawaii has some of the highest energy costs in the country and a serious lack of energy independence. The founders of Pacific Biodiesel, Bob and Kelly King, are demonstrating a community model of sustainable agriculture, renewable fuels and food that is helping Hawaii achieve a future with clean energy. Hawaii has set an ambitious goal: 100% renewable energy by 2045. To make this happen, they have implemented an incentive system (and some sanctions) for utility companies in order to accelerate this transition away from fossil fuels. The state has also partnered with various organizations such as the Hawaii National Marine Renewable Energy Center and Pacific Biodiesel in order to promote sustainable agriculture and renewable fuels.
Solar power is being used increasingly in residential areas as well as for pumping water “upstream” from lower reservoirs to upper reservoirs. Additionally, batteries are being used to store excess renewable energy for when it is unavailable. The 19 projects currently in progress will add 400 MW of solar capacity alone over the next two years in Hawaiian Islands. Regulators are incentivizing new things such as energy efficiency and connecting renewable energy sources to the grid instead of encouraging utility companies to build more plants.
This shift has already had positive effects on Hawaiian Electric's rating from S&P and Moody's even before performance-based regulation was officially launched. The shift towards clean energy is not only beneficial for reducing emissions but also for reducing costs and increasing independence from foreign sources of fuel. By diversifying its energy mix with locally produced renewable sources at lower prices, Hawaii can reduce its reliance on oil while still providing reliable electricity for its citizens.