Since 2013, a big mainland energy firm has been raring to build Hawaii's first inter-island power cable, arguing that only a unified power grid can enable the renewable energy developments needed to break Hawaii's addiction to imported petroleum. Now that big outsider—Juno Beach, Florida-based NextEra Energy—is trying to absorb Hawaii's power providers in one big bite.
In December, NextEra announced plans for a friendly $4.3 billion acquisition of Hawaiian Electric Industries, which owns the vertical monopolies that run the archipelago's island grids (with the exception of Kauai's). Observers debating what the acquisition would mean for Hawaii's electrical future see at least three quite distinct outcomes:
- NextEra secures Hawaiian Electric and builds cables to unify its assets, unleashing renewable energy development
- NextEra's bid for Hawaiian Electric is squashed by officials with longstanding mistrust of outside interests, and the island utilities proceed on their own
- NextEra wins approval for the acquisition but drops its cable ambitions, focusing instead on bringing liquefied natural gas to Hawaii to repower Oahu's oil and coal-fired generators
Interconnecting the islands is an idea that dates all the way back to an 1881 meeting in New York City between Hawaii's then-King Kalakaua and Thomas Edison. Kalakaua's officials asked Edison if electricity could be generated from the Big Island's active volcano and delivered via subsea cable to Oahu to bring electric light to Honolulu, thus sparing Hawaii greater dependence on Australian coal. Edison said the scheme could work, according to a report by the New York Sun, but demurred that it, "would cost so much, that's all."
134 years later, one hears essentially the same arguments for and against a unified Hawaiian grid. Proponents such as NextEra and the Hawaii State Energy Office say Oahu must hook up to its neighbors' grids because it lacks the renewable resources needed to meet even half of its power demand—over 7,500 gigawatt-hours (GWh) per year, or nearly three-quarters of the state's total.
Hawaii's other islands, by contrast, have renewable potential to spare, says a 2010 analysis commissioned by the U.S. Department of Energy's National Renewable Energy Lab. Lanai and Molokai could each generate over 1,000 GWh per year of wind power; Maui has over 2,000 GWh of viable geothermal, wind, and solar resources; and Hawai'i (better known as the Big Island) has over 6,000 GWh of geothermal potential. Sharing these resources with Oahu via subsea cables, the authors concluded, was the only way to meet Hawaii's goal to push renewables to 70 percent of the power supply by 2030.
In 2013, NextEra proposed to start with a 180-kilometer-long, high-voltage direct current (HVDC) link between Maui and Oahu dubbed NextGrid Hawaii. Last year, Pacific Business News reported that NextEra had secured property in downtown Honolulu for the converter station where NextGrid's pair of 200-megawatt cables would come ashore and link up with Oahu's AC grid.
NextGrid would cost an "enormous" $600-800 million, according to Pacifc Business News, but NextEra said it would save the islands' utilities at least $4.8 billion over its first 40 years of operation. The State Energy Office conservatively pegs net savings to consumers at a more modest $423 million, plus $128 million in environmental benefits.
One source of savings is avoided 'curtailment' of wind farms on Maui, which already produce more power at times than the local grid can handle. Hawaiian Electric's Maui subsidiary 'curtailed' 20.6 GWh of wind generation last year. (Kauai's utility expects to begin curtailing solar power generation this year.)
The promise of better renewable energy utilization earned NextEra support from some environmental groups. "We're stronger together," says Jeff Mikulina, executive director for the Honolulu-based Blue Planet Foundation. In addition to better integrating renewables, says Mikulina, tying the islands together should also reduce the need to keep fossil fueled power plants running in reserve.
NextGrid also appears to be spurring interest in cables to other islands, such as the Big Island. That island's biggest landholder, the historic Parker Ranch, says a cable to Oahu could benefit a pumped hydroelectricity storage project it is developing. "Parker Ranch could enable a large-scale storage solution as part of an integrated statewide grid," wrote Parker Ranch CEO Neil Kuyper in an August 2014 press release.
Of course, as is usually the case for transmission proposals, the idea of inter-island cables also has its critics. Some question, as Thomas Edison did, whether cables will really pencil out economically. Henry Curtis, executive director for Honolulu-based environmental advocacy group Life of the Land and a blogger on energy issues, says technical challenges associated with laying power cable over steep subsea slopes could inflate project costs.
Curtis also questions the cables' environmental benefits, and highlights potential environmental harm. NextEra's Maui-Oahu cable, for example, would traverse a humpback whale sanctuary.
And cables might ultimately prove unnecessary if advances in grid and power generation technologies expand Oahu's indigenous renewable resources. Smarter inverters, for example, are helping Oahu's grid cope with increasing levels of distributed solar energy. Curtis says more energy may be available just offshore, citing the ocean thermal energy converter currently being tested by Hawaii-based Makai Ocean Engineering.
Distributed generation advocates, meanwhile, are raising alarms about the track record of NextEra subsidiary Florida Power and Light (FPL), the utility that serves most of Florida. In December, Greentech Media noted that Florida ranks 29th in the country for overall renewable energy development, and blamed FPL for the sun-soaked state's shortage of solar power: "It’s not for lack of sunshine; it’s lack of policy. Florida has no renewable standard—FPL has crushed every effort to establish one."
Energy analyst William Pentland raised similar alarms in Forbes last month. "Hawaiians should think long and hard about NextEra’s track record in the Sunshine State before approving any merger," writes Pentland.
NextEra is, for its part, playing the grid unification card close to its chest as Hawaii's regulators weigh its offer for Hawaiian Electric. One thing appears certain: NextEra will face heightened expectations to deliver on Hawaii's renewable energy aspirations if the acquisition goes through.
Blue Planet Foundation's Mikulina says Hawaiian Electric was saying what state leaders wanted to hear at the state capitol earlier this week. During a hearing on a bill proposing a 100-percent-renewables standard for Hawaii's utilities for 2050, Hawaiian Electric's representative abandoned the utility's traditional tack. Rather than hedging on the prospects for zeroing-out fossil fuel consumption, the new message was 'How about 2040?' "That's a first," says Mikulina.
Contributing Editor Peter Fairley has been tracking energy technologies and their environmental implications globally for two decades, charting the engineering and policy innovations that are turning renewable energies and electric vehicles into mainstream competitors. He is especially interested in the power grid and power market redesigns required to phase out reliance on fossil fuels.