This Thought Leader Series piece was originally published in Canary Media’s August 19, 2021 Newsletter.

BY Julian Spector

Last week I visited Oahu, Hawaii’s most populous island, which is currently girding itself for the closure of the state’s last coal plant. My mission: to figure out how the island’s grid is shifting from fossil power to clean power, without the help of any neighboring grids to ease the transition.

I’ve got a ton to catch you up on, so stay tuned over the next few days. For now, I wanted to give you a quick overview of why Hawaii has become known as a “postcard from the future” of clean energy, and how that moniker has only grown more meaningful in recent months.

Clean energy moves faster on island time

Hawaii was the first state to pass a law to decarbonize its electricity system. The 2015 law set a 100 percent renewable target for 2045. Subsequent legislation specified that coal must shut down before 2023.

Policy certainly pushes things along. But Hawaii’s geography also accelerated clean energy adoption relative to the slower pace on the mainland.

• The islands don’t have coal or natural gas deposits. The grid relies on burning imported oil and diesel, which is expensive.
• That meant solar became cost-effective there early on, both on rooftops and in larger plants.
• The early proliferation of solar installations forced the adoption of batteries to manage the influx and shift it to more valuable evening hours.
• Scarce land makes large-scale development tricky, however. Hawaii very much pursues parallel tracks of building large-scale renewables and tapping its prodigious small-scale installations to help the grid.
• As of 2020, Kauai was hitting around 60 percent renewable electricity. Oahu, Hawaii Island and Maui averaged 34.5 percent renewable. Compare that to about 20 percent for the U.S. as a whole.

In a moment that felt like it had to be scripted, my cab driver from the airport in Honolulu heard what I was up to and revealed that he had put some 40 solar panels on his roof. He said that dropped his household’s electric bill from $600 a month to almost nothing. (I did not have time to verify his electric bills, so take this as broadly illustrative of the market dynamics.)

Lest you think I’m the type of reporter who just jots down whatever the taxi driver says and calls it a day, here are some hard statistics:

• 36 percent of single-family homes on Oahu have solar, as do 29 percent in Maui County, according to utility Hawaiian Electric.
• 78 percent of new home solar installations in 2020 included batteries. Sunrun, the nation’s largest solar installer, says basically all of its new customers in Hawaii get batteries.

Those numbers are way ahead of the mainland.

Over the last several years, Hawaii adopted policies to discourage more solar production exporting to the grid at midday, because it already had so much. But that’s now starting to change as the coal closure looms.

Paradigm shift

The last remaining coal plant in the state, owned by independent power producer AES, will shut down in 2022 after running since the early ’90s.

It’s an unusual plant in that it still provides some of the cheapest on-demand power in Hawaii. On the mainland, the story is usually that coal plants are already losing money compared to newer, cleaner options. But cheap or not, Hawaii’s last coal plant emits local pollution and carbon emissions.

“We strongly supported shutting down the coal plant,” said Kylie Wager Cruz, senior attorney with Earthjustice in Hawaii. “That facility needed to go. What we do with that loss of capacity is the key question.”

Making that question all the more interesting is the fact that Oahu can’t do what mainland grids do: simply shift to flexible gas power when coal goes away. For policy and economic reasons, gas is not an option for Hawaii. It can only build new renewables and energy storage to fill the gap — or temporarily burn more oil and diesel while those plants are still kicking.

Hawaiian Electric chose a portfolio of solar and storage projects to collectively replace the AES plant, as well as a one really big battery. San Francisco developer Plus Power is building the 185-megawatt/565-megawatt-hour Kapolei Energy Storage (KES) system just down the road from the coal plant.

• It will be among the largest stand-alone batteries in the world. Being able to charge from the grid, rather than onsite solar, gives it additional flexibility.
• Beyond its size, KES going to do a bunch of things that no batteries have done at anywhere close to this scale.

This project is sufficiently groundbreaking to deserve a closer look, which I’ll deliver to your inbox tomorrow. But I wanted to tease one aspect of it: KES will act as a battery at large for the whole Oahu grid, which means the system will be able to handle way more solar power than it otherwise could.

Hawaii’s energy planners are already freeing up residential and community-scale solar projects to inject more power into the grid. After years when that was discouraged, it’s now looking like a vital tool for keeping the lights on without coal power.

A few weeks ago, I wrote about the perceived tensions between large-scale and small-scale clean energy. Hawaii offers a clear example of how the interplay between the two can achieve things that neither could accomplish on its own.

About the author: Julian Spector is a contributor to Canary Media. He reports on the rise of clean energy. He worked at Greentech Media for nearly five years, and before that he reported for CityLab at The Atlantic.