Hawaiian Electric Company has been Oahu’s power company for as long as I can remember and I can remember Hawaii in July of 1960. Back then, Hawaii was going to stop using oil to generate electricity as soon as the population could justify a Nuclear Power Plant.
Nuclear long ago lost its luster and now the magic bullet has become clean energy. Hawaiian Electric has been supporting all sorts of green alternates and has been saying whatever the local politicians wanted to hear. Political realities have trumped economic realities and the Hawaii public has been paying for it all with higher rates.
Late last year Hawaiian Electric agreed to be purchased by NextEra Energy. I’d suspect NextEra saw what I noticed….a company that ignores the real world in favor of the political. NextEra says they like green energy, but they want all the subsidies eliminated. Locals are questioning whether the NextEra execs are being truly honest. The local papers are full of it.
Solar power without adequate storage is not a viable solution for Hawaii’s energy problems for all the reasons I stated in my last post. Hawaii has an after sunset peak that must be met with oil based generation. Dirty nasty oil. Solar provides power when it isn’t needed and cannot provide it when needed…until better batteries are developed.
Hawaii has been following the German model. Two complete energy systems, one renewable and one that uses fossil fuels operate side by side. Germany has enough solar and wind to meet their peak when it is all working….but it never is all working at once.
Wind and solar power cannot be relied upon, day in and day out. Utilities base load with other more reliable generation. Whenever the wind blows in Germany, they get more power than is needed. The utility is required by law to take it, which creates an energy imbalance. German Utilities sells the surplus to neighboring utilities, something Hawaii will not be able to do. The price of power at the German border moves around wildly.
In January of 2013, and again in 2014, the utilities bought power from the wind providers and could not find willing buyers. They actually had to pay their neighbors to take the surplus power. Utilities are slowly and steadily destroying their balance sheets as they are forced to buy high and sell low.
Too much solar power creates a similar problem for Hawaiian Electric. The utility is forced to limit the number of rooftop solar installations…and the locals don’t understand why. Too much power entering the system at unplanned places stresses the utility grid and provides no relief for peak demand.
Because the utility takes power when it isn’t needed and gives it back on peak, it is essentially buying high and selling low.
The utility is forced to maintain the old system and counts on it at peak, but there is less total generation using the grid. Peak demand continues to rise, which forces additional investment from the utility. Costs go up but the revenue base fails to keep up as off peak demand actually goes down. Throw in generous state tax credits for solar installations and you have a recipe for economic disaster if you are a power provider.
The new system doesn’t provide any peak assistance and yet it is heavily subsidized by everyone in Hawaii. And since the utility and the State have not been particularly forthcoming about the negatives associated with green energy, the public doesn’t understand. Unreasonable expectations are everywhere.
It looks like NextEra is going to try to finesse this problem by sounding positive on green energy but really being less positive than Hawaiian Electric has been. Neither utility’s position is particularly truthful, but NextEra’s approach understands the economics of power generation.
I wonder though. Island politics are tricky. Perhaps Hawaiian Electric was right to stick their head in the sand and pretend the problems didn’t exist. Hawaii’s politicians might simply shoot the messenger. Time will tell.