Utility plans to mothball 226 MW of old fossil power in Hawaii

Hawaiian Electric (HECO) plans to mothball or deactivate 226 MW, 14% of its utility-owned generation, by the end of 2016, and use more renewable energy, the company said July 1.

HECO is part of Hawaiian Electric Industries (NYSE:HE).

Days earlier the company filed its integrated resource planning (IRP) and five-year action plans with the Hawaii Public Utilities Commission, HECO said. The plan also says some currently idle power units will be permanently retired by 2019.

The report details plans to meet future electricity needs for Oahu, Molokai, Lanai, Maui and Hawaii Island.  It also affirmed that Hawaii is well on its way to exceeding its renewable energy goals, which are among the most ambitious in the nation, the utility said in a statement.

The document calls for deactivating 226 MW of utility generation by 2016.

This includes Honolulu Power Plant and two of four units at Maui’s Kahului Power Plant by 2014, as well as two generators at Oahu’s Waiau Power Plant by 2016. It also includes Hawaii Island’s Shipman plant, which has already been deactivated and will be retired in 2014. Further, all units at Kahului Power Plant would be fully retired by 2019.

”Deactivation” means a generating unit will no longer be run to meet the energy needs of customers. In a major emergency, such as the tsunami damage in Japan in 2011, with appropriate preparation, a deactivated unit can be reactivated to avoid power shortages for customers.

The company plans to accelerate development of more fast track utility-scale renewable energy projects, including wind and solar.

HECO also intends to convert or replace generating units, which have not been deactivated, to use cost-effective, cleaner fuels, including renewable biomass or biofuel and liquefied natural gas.

The utility also plans to increase the capability of utility grids to accept additional “customer-sited” renewable generation, especially rooftop solar.

HECO also intends to develop “smart” grids for its utility subsidiaries to integrate more renewable power and better control their electric bills. Major components include installing smart meters for all customers (with opt-out provisions) in 2017-2018, automating grids, and developing utility energy storage systems.

“We thank all those who have participated in the IRP process, including nearly 70 Advisory Group members, the PUC’s independent facilitator, and members of the public who attended meetings or submitted suggestions,” said Scott Seu, vice president for energy resources and operations. “This is an important milestone and there will be more opportunities for input.”

In the IRP, Hawaiian Electric used a “scenario-based” resource planning process. Rather than a fixed course of the action, it makes sense to be ready to adjust any plan to account for changes in technology, economic conditions, and other variables, the company said.

HECO must make periodic updates to the plan and complete another full IRP process within three years.

Flat demand growth seen for various factors

Due to high fuel costs, effective energy efficiency programs, customer self-generation of electricity and economic conditions, utility sales and peak loads have declined for several years, according to an IRP summary.

Peak loads are expected to be relatively flat or decline in the near term.

“The price of electricity in Hawaii has increased significantly in the past several years and our customers expect the Companies to develop and implement an IRP Action Plan that will help lower their electricity bills,” HECO said in the document.

Under Hawaii’s Renewable Portfolio Standard (RPS), the companies must meet the following percentages of “renewable electrical energy” sales:

** 10% of net electricity sales by Dec. 31, 2010;

** 15% of net electricity sales by Dec. 31, 2015;

** 25% of net electricity sales by Dec. 31, 2020; and

** 40% of net electricity sales by Dec. 31, 2030.

The HECO companies met a record 13.9% of energy needs from renewable generation in 2012 – well ahead of the 12%reported for 2011 and on the way to passing the next clean energy goal of 15%in 2015.

The utility subsidiaries feed-in tariff offers pre-set rates and standardized contract terms for individuals, small businesses or government entities to sell renewable energy to the utilities, according to the IRP.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.