Dive Brief:

  • The Hawaii Public Utilities Commission (HPUC) approved a 22-year power purchase agreement (PPA) from utility Maui Electric to buy energy for the island of Molokai from a solar-plus-storage system at approximately $0.18/kWh.
  • Molokai New Energy Partners will develop a 4.88 MW solar project coupled with a 3 MW/15 MWh lithium-ion battery storage system. The developer is allowed to discharge up to 2.64 MW.
The project will contribute about half of the island’s renewable energy capacity when in service, helping it reach Hawaii’s statewide goal of 100% renewables by 2045. The developer expects to save customers $60/year on electric bills — and the savings would rise if oil prices increase.

Dive Insight:

The cost of imported fuel oil helps make Hawaiian electric rates the highest in the U.S. and are a main driver behind the state’s push for 100% renewable energy.

Molokai New Energy Partners, says diesel fuel costs make up about half of the electricity costs for customers on the island, and prices can increase when oil trades higher on global markets.

Oil price volatility affects the entire state. A new report from the Hawaii State Energy Office showed that more than two-thirds of electricity is generated with oil in the state, as opposed to less than 1% of generation across the U.S.

According to the report, electricity prices on Molokai averaged $0.36/kWh, significantly higher than the PPA price for the new solar-plus-storage project. Molokai New Energy Partners said that the project, expected to be completed by the end of next year, will be the best deal for customers in the long term, as a sudden drop in oil prices would only be “for a moment in time.”

According to the developer’s website, the energy project will provide time-shifted power to the island during the evening to avoid competing with rooftop solar systems that generate energy during daytime.

The project will be sited on industrial land leased from Molokai Ranch.



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