We view the transformation of Hawaii’s energy future through the lens of "Faster, Better and Cheaper." For us, faster is vital because of the detrimental impact of high oil prices on the average resident and business. We need leadership from businesses, communities and policymakers, as well as transformational capital, to advocate for a more progressive plan to reduce our excessive exposure to the uncertainty of world energy markets and actually realize a cleaner energy future.
To make changes "Faster," we need to:
» Retire oil-based generation assets sooner. An aggressive timeline to retire oil-based generation will help reduce our vulnerability to the silent thief of price volatility, quietly stealing our wealth over time, while facilitating the separation of transmission and distribution from generation. The challenge is to do it quickly and deliberately, requiring a fair way to absorb potential stranded assets through the rate structure so the utility is incentivized to act. But incentives must be tied to successful action, not just to shield utility shareholders from potential losses.
» Allow wheeling of power. Wheeling, the ability of producers to use a utility’s power lines to sell electricity to consumers, would enable a more optimal utilization of renewables, so power does not need to be co-located, co-owned or utility-owned. Wheeling would encourage competition which should benefit consumers.
"Better" means more fully utilizing the clean energy resources of Hawaii. It means switching from oil to gas and adding storage. Better also means that the transmission infrastructure is modernized, via options such as:
» Higher renewables penetration enabled by LNG (liquefied natural gas). Higher renewables penetration on a more aggressive timeline than the current state mandated targets should lower rates and volatility. LNG-fueled fast ramping turbines will enable higher levels of renewables penetration on each island, levels that older steam units cannot support. A legitimate proposal for LNG should also contemplate large-scale renewables to warrant public support, especially if the costs of the potentially no longer useful, existing utility generation are to be absorbed by ratepayers. An LNG strategy lacking a comprehensive evaluation of potential large scale renewables is short-sighted.
» A multidirectional grid. The one-directional, centralized grid is obsolete technology, and is a major obstacle to the potential of "smart" multidirectional grid technologies that can increase reliability and better harness renewable energy sources.
» Microgrids. Like the one contemplated for greater Waimea by Parker Ranch, microgrids are multidirectional systems that utilize local energy sources to serve communities in a self-reliant, resilient, interconnected network of "energy districts."
As for "Cheaper," maximizing the use of renewables is the obvious way to go because renewables are now cheaper than both oil and gas, and act as a hedge, protecting consumers from volatile fuel prices. In addition, the costs for renewables are declining while uncertainty in many oil and gas producing countries is rising. Hawaii is one of the few places in the world where many of our domestic renewable energy options are cheaper.
A key component is to connect the islands. Two-way transmission cables that enable the integration of more large-scale renewable generation than otherwise possible should result in lower equalized rates across the connected islands, including the Big Island.
The vertically integrated utility business model seemed to work in a relatively stable economic environment. The ratepayer savings from an accelerated retirement schedule for oil-based generation would likely far outweigh the costs to the utility. It is time for our society to recognize the social cost of delays in transforming our energy infrastructure. We, as a society, need to develop a strategic outlook and express our views on the changes needed.
The Public Utilities Commission needs to direct the utility on what it must do. Our outlook is that oil and gas will remain more costly and volatile than most renewables for the foreseeable future and most likely longer. "Faster, Better and Cheaper" is the cleaner strategy. What is your view?
