Hawaii’s pursuit of energy independence has made the state a testing ground for technology to overcome the instability of wind and solar power generation.

Hawaiian Electric Co., the state’s largest utility, is leading the charge, investing in battery storage technology and honing its grid-management skills as it braces for a surge in the growth of renewable energy sources.

A cloud passing over a photovoltaic panel or a sudden drop in wind at a wind farm presents challenges for any utility trying to maintain a flow of electricity through its grid at a constant frequency. That challenge becomes even more difficult on island grids, like those managed by HECO and the Kauai Island Utility Cooperative, where electricity cannot be brought in from a neighboring state to smooth out fluctuations. The world will be watching to learn from the successes and failures in Hawaii, experts say.

"Hawaii is the unintended guinea pig for these technologies," said Sam Jaffe, an analyst at IDC Energy Insights, an energy industry consulting firm. Battery storage, although expensive, is emerging as the most practical solution to the problem, he said.

The growth of utility-scale wind projects and a surge in photovoltaic generation on thousands of rooftops of homes and businesses in Hawaii is unparalleled in any other state, according to Jaffe.

"Just last year Hawaii emerged as the leader. And that will be even more true in the next few years," he added.

Xtreme Power, an industry leader in battery storage for wind and solar energy products, has made Hawaii a testing ground for its technology, which it says is superior to lithium ion batteries when it comes to energy storage, efficiency, longevity and cost.

Xtreme Power has been running a demonstration project for several years at First Wind’s 30-megawatt Kaheawa Wind Farm on Maui. The technology proved successful, and Xtreme has landed contracts to supply battery backups at First Wind’s 30-megawatt project in Kahuku, scheduled to start generating early next year, and the Kaheawa II project, scheduled to break ground next year.

Although privately held Xtreme Power won’t disclose pricing for its battery systems, the cost can be high, Jaffe said. At an estimated cost of $1,000 per kilowatt, the 10-megawatt battery system planned for the Kahuku wind farm could cost as much as $10 million, he said. The price is expected to come down as technology advances, he said, noting that automaker Nissan is targeting a battery cost of $400 per kilowatt for its electric Leaf by 2012.

Xtreme also is installing a battery at the state’s largest solar farm, a 1.2-megawatt photovoltaic project developed by Castle & Cooke on Lanai capable of supplying 30 percent of the island’s electricity. The system is currently running at half power because without a battery backup to smooth out the volatility of solar generation, the system would cause the grid on Lanai to crash.

Lanai also has been targeted for a 200-megawatt wind farm that is still in the conceptual stage. The project, along with another 200-megawatt farm eyed for Molokai, would deliver electricity to Oahu via an undersea cable.

An Idaho-based energy company has proposed building a pumped-water-storage project on Lanai to help with energy storage issues should the wind farm ever be realized. The plan, advanced by Gridflex Energy LLC, would feature a reservoir on the western end of the island at an elevation of 1,790 feet to hold stored sea water pumped using electricity generated by the wind farm during hours when overall electricity use is low. The water would then be allowed to run downhill through a hydroelectric generator during hours of peak electricity demand. Castle & Cooke and HECO say concerns about cost and environmental impact make the project unlikely to advance.

Meanwhile, HECO says it is using federal stimulus money to study the feasibility of integrating battery storage systems in its distribution networks to help stabilize the flow of electricity as it takes on more "distributed energy" from rooftop solar systems around the state.

The utility also is working to improve its forecasting for wind and sunshine so it can be better prepared for the ebbs and flows from the renewable sources, said Scott Seu, HECO’s vice president for energy resources.

"We’re trying to be more aggressive in our approach to renewables while at the same time being prudent."