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Hawaii Turns to Batteries for Grid Balancing

Bentham Paulos

As Hawaii works to cut its oil dependency, it's been found that solar and battery storage systems can be surprisingly cost effective.

Living on an island paradise like Kauai brings many benefits, like perfect weather, gorgeous beaches, and exotic flora and fauna.

One downside, however, is the cost of living. Electricity prices are 34 cents per kilowatt-hour on Kauai—triple the average mainland US price, according to the state energy office.

As a result, utilities in the region are turning to solar power and batteries to cut costs.

Rising Oil Prices Threaten Hawaii's Economy

High energy prices are largely due to oil. "Hawaii is still the most petroleum-dependent state in the nation, with over 80 percent of its energy needs from imported oil," according to the Hawaii Natural Energy Institute (HNEI). "Of that," the HNEI continues, "60 percent goes to the transportation sector, with jet fuel and motor gasoline each accounting for about 24 percent. As expected, gasoline costs are typically the highest in the nation. Electricity generation consumes almost 30 percent of the petroleum shipped to Hawaii."

When the global price of oil rises, consumers and the whole state economy are hit hard. According to the state's Department of Business, Economic Development & Tourism, Hawaii spent $7.8 billion on energy in 2012, which is equal to 10.8 percent of the state's total gross domestic product (GDP), or a whopping $5,700 for each man, woman, and child.

Getting off oil is not just an environmental strategy for Hawaii, it is a matter of economic survival.

Solar and Storage to the Rescue

State leaders have responded to the problem, according to Utility Dive, by setting a goal of 100 percent renewable power by 2045. Utility Dive also reports that the state already has the highest concentration of solar power in the United States; over 32 percent of single-family homes on Oahu sport solar panels.

Switching to variable energy sources like solar and wind power is a challenge on an island. There are no neighbors to trade power with when the wind dies down. In fact, the islands are not even connected to each other; each runs as a separate microgrid, relying mostly on diesel-fueled generators.

To make the transition off oil while preserving a reliable electricity system, the Hawaiian islands are combining their renewable generators with battery systems.

On the Garden Isle, the Kauai Island Utility Cooperative (KIUC) has committed to using solar, biomass, and hydropower to produce at least 50 percent of the island's electricity by 2023 and 70 percent by 2030. The co-op has been aggressively building ground-mounted solar systems to supplement their biomass and hydropower generators.

However, the island's grid can take only so much solar. In January 2016, Kauai got 90 percent of its power from renewables on four occasions, including 77 percent from solar—the most solar ever integrated by a US utility, according to KIUC.

Kauai Stores the Sunlight

To enable more solar, the KIUC has been integrating some of the largest battery systems in the world, including systems from AES Distributed Energy and Tesla.

The KIUC brought Tesla's dispatchable solar system online in March. The plant will feed up to 13 MW of electricity into Kauai's grid to meet peak demand in the evening hours, thanks to a 13-MW solar farm and a 52-MWh Tesla Powerpack lithium-ion battery system.

The project will save 1.6 million gallons of diesel annually for KIUC and boost renewable supply to 40 percent. It will also save money, as the 13.9-cents-per-kilowatt-hour cost of the project beats the current, relatively low cost of oil-generated power.

The AES project, expected to come online next year, will be even bigger and cheaper, according to GreenTech Media. It will combine 28 MW of solar with a 20-MW, 100-MWh battery system—one of the biggest battery systems in the world.

"Energy from the project will be priced at 11 cents per kWh and will provide 11 percent of Kauai's electric generation, increasing KIUC's renewable-sourced generation to well over 50 percent," said KIUC President and Chief Executive Officer David Bissell, according to the Solar Tribune.

Bissell also told the Solar Tribune that he was amazed that the solar-plus-storage system could be got "at about half the cost of what a basic direct-to-grid solar project cost a few years ago." This project will cut diesel fuel use by another 3.7 million gallons annually.

More is in the works. The US Navy is proposing to develop a 44-MW solar and battery energy storage system at the Pacific Missile Range Facility at Barking Sands on Kauai.

Going Off-Island

Hawaii, forced by the high cost of powering a remote location, is an eager early adopter of new technologies like batteries. In places with lower grid prices, batteries are used in cost-effective niche applications.

One niche is providing ancillary services, like voltage and frequency support, in wholesale markets like PJM, which pay energy storage and other demand-side resources the same rate as power generators. Another is in reducing peak demand charges for commercial customers, which can amount to as much as half their electric bill. A third is combining gas turbines with batteries in a hybrid generator. Southern California Edison and GE recently put together a Prius of generators, so to speak, combining a 50-MW turbine with 10 MW of batteries to enable more rapid and efficient response rates than a combustion turbine could provide alone, according to Business Wire.

The number of cost-effective applications will grow as costs come down. On mainland grids, which have more options for integrating wind and solar, battery systems will have to compete with dispatchable generation, flexible demand, bigger utility-balancing areas, and other measures. On Hawaii, however, batteries are showing their power today.

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