Integrating more renewable energy in Hawaii
March 30, 2017
Looking to meet Hawaii’s aggressive goal of 100% renewable energy by 2045, the Hawaii Senate Committee on Transportation and Energy held an informational briefing on energy storage. The Senate Committee invited six major energy storage players, to describe the use case for energy storage, along with costs and benefits. The panel discussion, Storing for Hawaii’s Future: The Status and Future of Energy Storage was held at the Hawaii State Capitol.
Senator Lorraine Inouye spoke out on her support of energy storage deployment, stating, “Energy storage can light our homes, when the sun isn’t shining or the wind isn’t blowing and it is key to a stable grid supply that can accommodate distributed generation.”
Hawaii can integrate more renewables with energy storage.
Energy storage will help mitigate grid spikes, reduce energy costs, and hasten the transition to a clean energy future. Panel speaker, Terry Andrews of CALMAC explained , “In order to integrate more renewables onto the grid storage technologies is going to be an important part of that.”
The transition to renewable energy however poses challenges for governments and utilities. As distributed energy resources (DER) such as energy storage and rooftop solar encourages customers to take a more active role in their energy consumption, utilities are developing new programs to ensure a safe, reliable network.
Transitioning to renewable energy
Coal plants are being retired at an historic rate in the U.S. thanks to low natural gas prices and federal regulations. In contrast, renewable energy capacity is seeing dramatic growth. In 2016, wind energy grew almost 19% and commercial-industrial (C&I) solar nearly doubled its 2015 growth.
Currently, 29 states have legislated policies to integrate even more renewables. Meanwhile, Hawaii is already on its way to 100% renewable energy. For Hawaii, an early stance on 100% renewable integration was a no-brainer. Hawaiians rely heavily on oil imports and unlike the average U.S. retail cost of 10 cents per kWh, Hawaiians pay more than 3 times that amount for electricity.
So to reduce energy costs, Hawaiians are investing in renewable energy. In fact, over 12% of Hawaiians so far own rooftop solar. However, rooftop solar has created some challenges for the utilities.
A perfect storm
There are several issues for the grid with the integration of solar in Hawaii. The core problem is that solar systems can only be used when the sun is shining. Since these intermittent energy sources are still tied to the centralized grid, the centralized grid is used more for back-up when the sun isn’t shining. The utilities are obliged to pay the cost to manage and maintain all the centralized grid assets even as less energy is used overall.
Second, unlike the continental U.S. which has 3 grids shared between 48 states, Hawaii lacks neighboring grids to interconnect with. Instead, Hawaii has five separate island grids which cannot export or import energy. Grid interconnections between states are important because they can allow for demand flexibility to make up for solar’s variability.
According to Scientific American, greater connection is a principal strategy for reducing integration costs. For example, grid interconnections allow utilities to get backup generation from another source when nearby solar power is absent. Also, when customers send their excess solar energy back to the grid, grid interconnection allows the utility to dump power elsewhere.
In addition, there are safety concerns as more customers rely on solar. Utilities must contend with voltage and back-feeding at a substation level. The way delivering electricity works, higher voltage electricity is sent down power lines to substations where 
transformers reduce voltages for the distribution lines that go to buildings.
Unfortunately, utilities don’t have visibility beyond the substation. Grid operators don’t how much rooftop solar power is used and when the solar is produced. This lack of visibility, makes managing grid assets extremely difficult.
The utility struggles with a "lack of visibility even to where it is, when it’s producing and how much it’s producing, so that’s a challenge," she said. Dora Nakafuji, HECO's director of renewable energy planning.
If there is not enough juice, the voltage will be too low resulting in a brownout. Lights may flicker and electrical equipment can be damaged. To avoid brownouts utilities will “over-juice” customers to ensure there is enough power. However, with the advance of rooftop solar, tracking when voltages drop low becomes very tricky and likelihood of brownouts increase. In order to effectively manage grid assets and provide reliable power utilities are building a smarter grid and incorporating more energy storage.
Steps to a smarter grid
A smart grid is an electricity supply network that uses digital communications technology to detect and react to local changes in usage. Utilities must constantly match electricity supply to electricity demand. Visibility into how and when energy is produced and consumed allows the utilities to make informed adjustments that ensure power quality and safe, reliable electricity.
Because utilities lack visibility to customer sited renewable energy and lack access to other flexible energy resources, the grid is essentially dumb and can’t react effectively. To make up for the lack of visibility utilities are changing how they charge solar consumers for electricity. Arizona, a state with high solar penetration is considering new rate design options (time-of-use or demand based).
Hawaiian electric companies are also offering several demand side management programs. One is self-supply, meaning that customers use all their rooftop solar without selling energy back to the grid. Excess energy can be stored in thermal storage equipment, batteries and used to charge electric vehicles (EV). Next is grid-supply which allows customers to sell energy back however customers receive a lower rate for the energy they sell and capacity is capped at 100kW.
In the general rate schedule, large commercial customers pay a demand charge of $24/kW. For buildings that peak in the day such as office buildings, schools, retail, etc. this means that the demand is a day time charge that makes their energy costs significantly more expensive in the day. Shifting peaking electrical loads to night-time to smooth demand can dramatically improve the effect of this demand charge on the overall bill.
And under a time-of-use program the utility sends price signals to customers so that rooftop solar is consumed when strain on the grid is the highest. If solar is not available, energy storage can pick up the slack. This role of energy storage is most critical between 5pm and 10pm, when demand skyrockets because renewable forms of energy are no longer adding energy to the grid. HECO plans to modify the rates to discourage usage for this critical period.
Plans for a Renewable Energy Future
Hawaiian Electric companies has filed a Power Supply Improvement Plan with the state’s Public Utilities Commission, making the case for a modernized grid that employs more renewable energy and DER (i.e. EV, energy storage). Smart meters will also be an essential component.
Under the utility company’s visionary plan, Hawaii will meet the 100% renewable energy goal five years earlier than scheduled. Customers will be empowered with more energy choices than before. They will have the options to buy electricity, generate their own energy, eliminate energy (energy efficiency) or utilize demand flexibility (DER). By taking advantage of these strategies customers can unlock 10 to 40% savings on their electric bills.
For example, EV owners can benefit from a federal tax credit or rebate, free parking and special high occupancy lane privileges. Time of use rates will create incentives for charging electric vehicles when excess solar is available.
Energy storage is another option. Currently, there are two Hawaii state bills that propose 
tax credits for storage including the Senate Bill SB 665 – 25% tax incentive and House Bill HB 1593 - $10M for energy storage incentive program. Seen as transformative for the electrical system, ice based thermal energy storage can support more sustainable energy and provide reliable service to schools, corporations, medical centers and other commercial properties. Thermal energy storage stores excess energy for later use while providing comfort cooling at a fraction of the cost of conventional systems.
Over at the Mid Pacific Institute, thermal energy storage reduces peak electricity loads by making ice when electric rates are low, resulting in significant energy cost savings along with benefits for the society at large. Another facility, the Nordstrom Ala Moana, integrated thermal energy storage to store energy, when energy rates were least expensive. This energy was then used to cool the store throughout the day.
Today’s building owners are learning to better understand how different electronic devices are using electricity and how they contribute to overall energy usage. DER options and smart meters will help customers to play a more active role in their energy use. Some may even defect. However, one thing is perfectly clear, there’s no turning back. DERs are playing an increasingly important role in the architecture of the grid in Hawaii as well as the rest of the world.
