Hawaii Electric (HECO) says a proposed massive battery storage facility on Oahu will help fill the capacity gap left by the closure of a 180-MW AES coal-fired plant in September 2022.

But a big question remains: What will power the Kapolei Energy Storage (KES) project?

That issue came to a head during a meeting between HECO and the state’s Public Utilities Commission on March 16. (See Discontent Mounts over HECO Coal Plant Closure Plans.)

Because the 185-MW/565 MWh KES project — slated for completion in June 2022 — is battery-only, HECO’s long-term plan is to charge the facility with output from other renewable energy resources.

But most of those projects will not be completed before shutdown of the AES plant, raising concerns about energy shortfalls September-November 2022 and July-October 2023, periods of high energy use on the island. HECO noted that October energy reserves in particular will not only be tight, but potentially lower than projected capacity needs.

During the March meeting, HECO argued that KES could be charged by Oahu’s oil-fired plants in the near term to fill the capacity gap, a move PUC Chair James Griffin equated to “going from cigarettes to crack.” Griffin said that his “baseline” expectation is for HECO to move completely away from oil in a “safe” and “cost-effective” manner.

Taking the Long View

In a March 24 filing with the PUC, HECO acknowledged Griffin’s concerns without offering the type of specific details likely to address them.  The company said the complexity of moving to a renewables-based grid necessitates a back-and-forth approach to resource use, with oil-fired units needed to charge the batteries in those tight months until more renewable generation comes online.

“This transition will necessarily occur as part of a planned progression; it cannot occur at once,” the utility wrote. “Over time, fossil fuel generation will continue to decrease, and renewable generation will continue to grow. But for a relatively short time — not indefinitely — fuel oil is still expected to be called upon to replace at least a portion of the energy that would have otherwise been provided by coal (i.e., the recent procurements and programs did not yield sufficient renewable energy to displace all of the energy that is normally provided by the AES Hawaii coal plant).”

HECO also noted that the “total amount of fuel oil needed to replace the AES coal plant will be less with the KES Project in operation than without it,” because KES can store excess energy from existing renewable energy resources and reduce overall need for oil.

“As recently emphasized by the Commission, this energy mix currently skews toward fossil fuel usage until more renewables are added to the system, which could include customer DER programs, community based renewable energy projects and future grid-scale renewables, among others,” the utility said.

HECO’s filing also said that KES will lower electricity prices for customers “over the course of the project,” although prices could be higher for the span of time when oil is used heavily.

Supply Constraints

The developer behind KES, Plus Power, submitted its own filing restating its belief in the value of KES. The company did not address Griffin’s core contention about using oil-fired generation to charge KES, but instead pointed to the ability of the project to increase grid resilience and help wean Hawaii off fossil fuels over time.

“Having KES online serves as a transitional step that enables future distributed and utility-scale renewable energy projects without further reliance on fossil fuel plants,” the company wrote.

Plus Power urged the PUC to hasten approval of KES, contending that “upstream constraints in the global supply chain for battery storage raw materials is constraining battery cell and unit availability significantly through 2023.”

“To lock in the price and schedule of delivery, KES is poised to execute a battery supply agreement in the coming weeks which requires a substantial non-refundable deposit,” the company said. “Regulatory uncertainty puts KES in a challenging position to make that decision and ensure the deliveries that will make KES a reality in 2022.”

The PUC also asked developers of the various renewable projects intended to eventually replace the AES to respond to their concerns.  Those that did — AES, Innergex, Longroad Energy, Plus Power, 174 Power Global and Clearway Energy Group — largely reiterated their commitment to renewable energy while suggesting that their projects could be brought online a few weeks or months earlier if the various discussions and permits related to them were accelerated.