Shift energy use to hit goals, UH study says

Hawaii is going to need more help from its customers if it hopes to achieve its 100 percent renewable-energy goal by 2045.

One of the first steps is shifting demand for electricity to daylight hours, according to a recent study by the University of Hawaii Economic Research Organization.

With solar power being one of the most accessible and inexpensive forms of renewable energy for residents, the challenge for utilities is to get customers to use electricity when solar generation is at its highest.

“There are just two ways to deal with the variability challenges of renewable energies: store it or shift it,” UHERO said in its report.

But storing requires batteries, which are still expensive and potentially dangerous.

Shifting demand to daylight hours is the cheapest and quickest solution, the UH study concluded.

“It makes sense to start by taking advantage of the most flexible, least-cost option,” the UH study said.

Hawaiian Electric Co. is embracing the idea of shifting electricity use, known as demand response.

Last week HECO announced it submitted a proposal to the state Public Utilities Commission that would give incentives to customers to avoid charging their electric vehicles from 3 to 9 p.m.

All other hours, customers can charge their EVs at a less expensive off-peak rate. The new rate is designed to provide more off-peak hours for home EV charging with a savings of 6.1 cents per kilowatt-hour for a typical residential customer on Oahu, HECO said.

The UH study said demand response is the cheapest solution for the utility. The energy shift would support HECO so it wouldn’t have to discard or curtail excess energy.

With 70,000 rooftop solar systems connected across the state, HECO said demand response can help the utility use the excess energy.

“If we can encourage our EV drivers to charge their vehicles, or homeowners to do their laundry or businesses to use maximum electricity from about 10 a.m. to 3 p.m., we make better use of that excess power when it is most abundant,” HECO spokesman Peter Rosegg said.

HECO said that by the end of the year, the utility will be filing proposals with the PUC that will lay the foundation for customers to get more involved in demand response with rooftop PV units, electric vehicles and batteries behind the meter.

“For now, most of the work is with us, but we will be turning to our customers to help us both increase demand when electricity supplies are abundant and decrease demand when electricity supplies are tight,” Rosegg said.

Demand response is the first step to solving other issues outlined in the study regarding the utility’s pricing.

“A longer-term concern, particularly in Hawaii with its high electricity rates, is that an inefficient pricing system could encourage many households and businesses to install stand-alone systems, unplug from the grid, and further raise costs for everyone else,” the study said.

HECO has said home-based photovoltaic systems placed an additional $53 million burden on the shoulders of nonsolar customers in 2014. This occurs as fixed costs for the utility, such as grid maintenance, are shifted from solar owners to nonsolar owners, the study said.

Also as a result of the current pricing system, HECO received $1.7 million worth of “free” power from rooftop solar customers in 2013. Solar proponents have argued the excess power given to HECO is not recognized by the company when it says rooftop solar customers are increasing costs for nonsolar customers.

The UH study, funded partly by HECO and NextEra Energy Inc., supported the idea of rate restructuring to encourage more demand response.

“To achieve efficiency would require rates that vary … by the overall supply and demand for electricity in each moment,” the study said.

Companies should incentivize shifting electricity use when solar power is abundant to encourage demand response, the UH study suggested.

“Shifting demand to cope with variable renewable supply is highly attractive because it doesn’t require major capital outlays. It only requires rate restructuring, a restructuring that would enhance efficiency and lower costs,” UHERO said.

Solar companies are in favor of pricing that would encourage more electricity use during daylight hours.

“The EV rate is good policy,” said Colin Yost, principal at RevoluSun. “The EV rate should be part of a broader time-of-use rate structure to better incentivize power usage and exporting at times when it’s more beneficial to the grid. The daytime rate would be lower and could eventually be available as an opt-in to all ratepayers, not just solar ones.”

Everyone can benefit from solar as rates are lower during the daytime when solar power production is at its highest.

UH’s study said shifting energy use to daytime is one solution to energy inefficiency.

The study noted a backslide in energy efficiency as night loads increased significantly in 2013 relative to early years.

“To improve efficiency, all households and businesses should have an option to buy or sell as much electricity as they like at a price equal to the marginal cost of electricity production,” the study said.