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Solar+Storage in Hawaii to Offset 3.7 Million Gallons of Diesel as Costs Fall 42% in Three Years

Hawaii has produced a small surge of solar+storage news to start the year, with the world’s largest installation of its kind going into service on the island of Kauai and the Hawaiian Electric Company submitting seven new projects—six of them offering record low prices for the state.

On Kauai, AES Corporation cut the ribbon on a new plant that “produces cheap, clean energy and uses batteries to deliver power when it is most valuable, instead of just when the sun shines,” Greentech Media reports. “That’s vital to decarbonizing the island grids of Hawaii, which struggle with too much solar power at midday but still rely on fossil-fueled peaker plants in the evening.”

The 28-megawatt Lawai Solar and Energy Storage Project, complete with its 100 megawatt-hours of lithium-ion battery storage, adds an important here-and-now quality to the conversation about solar+storage for Hawaii. “In the two years since AES announced the project, a flurry of headlines ensued as energy companies drove the price point for dispatchable solar successively lower,” Greentech notes. But “while the most attention-grabbing bids bank on several years of further battery cost declines, the Kauai plant is up and running right now.”

AES is retaining ownership of the plant, and will operate it on behalf of the Kauai Island Utility Cooperative (KIUC) at a rate of 11¢ per kilowatt-hour. “The plant delivers solar power when a standalone solar plant can’t: at night. That offsets the peaker plants that turn on for the evening peak; in Hawaii, those plants tend to run on imported oil, at considerable expense,” Greentech notes. “AES expects to offset 3.7 million gallons of diesel each year by dispatching more cost-effectively than the fossil-fueled incumbents.”

“We’re in the money anytime you can dispatch to offset oil generation,” said AES Distributed Energy President Woody Rubin.

“There’s too much discussion about renewable energy; there’s not enough discussion about capacity,” added AES President and CEO Andrés Gluski. “With batteries in place, it’s a game-changer—you can produce very cheap energy and turn it into that 24/7 capacity.”

Meanwhile, the seven new projects put forward to state regulators this week will add 262 MW of new solar capacity and 1,048 MWh of storage, with four companies proposing installations across three of Hawaii’s islands, Greentech reports. “It’s hard to overstate the scale of this announcement,” said Dan Finn-Foley, senior energy storage analyst at Greentech’s parent company, Wood Mackenzie Power & Renewables.

“Hawaiian Electric’s projects would nearly double what’s installed in the U.S. and grow Hawaii’s market exponentially,” Greentech writes, citing Finn-Foley. It also shows a “jaw-dropping” drop in solar+storage prices in the state’s power purchase agreements (PPAs) with private providers—from 13.9¢/kWh in 2016, to 11¢ in 2017, to 8¢ in the two lowest bids, both from AES.

“That means that from 2016 to 2019, solar+storage PPA prices in the state dropped by 42%,” the industry publication notes.

“With prices like these, it’s easy to understand the confidence of Hawaiian electric providers that their islands can hit 100% renewables ahead of the 2045 mandate,” Finn-Foley said.

“The grand takeaway for me is utility solar-plus-storage is hitting price points that we’ve been hoping and waiting for for a number of years to make utility-scale solar-plus-storage competitive, and then some, with other forms of power generation,” said ProVision Solar President and Supervising Electrician Marco Mangelsdorf. “We in Hawaii are on the cutting edge.”