Hawaii's Energy Policy

Brandon Lutnick
November 18, 2020

Submitted as coursework for PH240, Stanford University, Fall 2020

Introduction

Fig. 1: This is an aerial view of the eight islands of the state of Hawaii. (Source: Wikimedia Commons. Courtesy of NASA)

Hawaii's energy policy is focused on deploying cost-effective clean-energy innovations for the purpose of advancing Hawaii's energy security. The states approach entails diversifying its energy portfolio and connecting and improving its electrical grids throughout the eight islands, as shown in Fig. 1. Hawaii has sought to balance economic, technical, and cultural considerations, leverage innovations, and create an efficient marketplace for energy producers and consumers. Hawaii enjoys access to diverse renewable energy sources: solar, wind, hydroelectric, bioenergy, and geothermal.

Energy Production over the Years

Hawaii's electricity-production portfolio has shifted in recent years. In 2015, Hawaii generated 67.3% of its electricity from petroleum, followed by 15.1% coal, 6.4% wind, 3.6% biomass, 3.2% other, 2.6% geothermal, .9% hydro, and .9% solar. [1] Sources of electricity generation as of 2017 were 61.5% petroleum, 12.7% coal, 10.8% solar, 5.9% wind, 4.5% other, 2.3% geothermal, and 2.2% biofuels. In 2018, Hawaii generated 61.3% of its electricity from petroleum, 11.9% coal, 9.3% small-scale solar, 4.9% wind, 4.0% other, 2.9% geothermal, 2.8% biomass, 1.9% utility-scale solar, and .9% hydro-electric. [2] Though heavily dependent on fossil- fuels, Hawaii showed a 6% drop in petroleum, and a 3.2% decline in coal, signaling a shift towards renewable energy. In particular, solar-generated electricity rose from less than .9% in 2015 to 11.2% solar in 2018. Wind power was concentrated in the northwest corner of the main island of Hawaii, with a wind power density exceeding 800 W/m. Hawaii's energy prices are roughly double the national average, and are closely correlated with the price of petroleum, still accounting for more than half of all electricity produced. [2]

Renewable Energy

Hawaii has committed to generating 100% of its electricity using clean, renewable energy sources by the year 2045. The plan involves gradually scaling up from 30% renewable sources in 2020 to 40% in 2030, 70% in 2040, and 100% by 2045. [2] Hawaii's renewable energy generation has increased from 1,707 GWhs in 2013 to 2,520.3 GWhs in 2018. [2] Geothermal promises to be a low-cost, strong, and clean energy source. Biofuels are another important resource that should be targeted for jet fuel and electric generation, and aid the transition away from carbon-generating fossil fuels. Hawaii's share of utility electricity sales from renewable sources, its renewable portfolio standard (RPS), rose to 27.6 percent at the end of 2017, tripling since 2010. [3] The Hawaii State Energy Office encourages renewable energy use in new building codes, estimating that energy use in new homes and buildings will decline by 30%. [4] Social movements favoring green energy use should accelerate demand for renewables in coming years, setting Hawaii on track to achieve its 2045 goal of 100% renewable-generated electricity.

Promoting an Efficient Marketplace That Benefits Producers and Consumers

To more successfully challenge energy issues, HSEO wants to support producers striving to develop innovative and cost-effective ways to generate energy for Hawaiians. In addition, they hope to give consumers the tools to make more informed decisions for their energy needs. In addition, the state is incentivizing sustainable energy practices among business consumers, through the Hawaii Green Business Program, which has saved energy, water, and energy costs, supporting Hawaii's energy independence. Between 2009 and 2018 the program has saved 23.5 million kWh of energy, 244.1 million gallons of water, and $6.6 million in energy costs. [2] As consumption of renewables rises, energy prices will be less tied to imported oil, aiding Hawaii's energy security. Consumption of renewable energy by the electric power sector has risen consistently. As renewable energy production rises, variable costs will decrease, lowering supply costs, bringing Hawaii's electric costs closer to the national average.

Energy Performance Contracts

Through the Energy Services Coalition (ESC), a national non-profit, working to increase energy efficiency and building upgrades through energy performance contracting, Hawaii has received national recognition for its pursuit of the Race to the Top award. This award is given to the national leader with the highest per capita investment in performance-contracting projects. In 2019, ESC recognized Hawaii for the single largest performance by a state agency, as their Department of Travel, Airports Division, performance contract was for nearly $209.8 million. [2] From 2012 to 2018, Hawaii was awarded the Race to the Top award for being an all-time per-capita investor. In 2017, Hawaii earned its second Stewardship Champion award as it successfully leveraged performance contracting to achieve environmental stewardship, economic development, and infrastructure modernization. As ESC director Jim Arwood said, Hawaii has achieved considerable recent success in support of implementing energy efficiency projects in public buildings through the use of a GESPC (Guaranteed Energy Savings Performance Contracting). [1] Table 5 in the Hawaii State Energy Offices 2019 Energy Facts and Figures lists the top five states populations, performance contracting worth, and dollars per capita. [2] Hawaii holds a significant lead over other top states in Washington ($201.72 dollars per capita), Delaware ($197.98 dollars per capita), and Kentucky ($172.84 dollars per capita), with an incredible $372.81 dollars per capita, a $171.09 dollar per-capita difference with Washington. [2]

© Brandon Lutnick. The author warrants that the work is the author's own and that Stanford University provided no input other than typesetting and referencing guidelines. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.

References

[1] "Hawaii Energy Facts and Figures," Hawaii State Energy Office, June 2018.

[2] "Hawaii Energy Facts and Figures," Hawaii State Energy Office, July 2019.

[3] "Energy Resources Coordinator's Report on the Status and Progress of Clean Energy Initiatives and the Energy Security Special Fund," Hawaii State Energy Office, December 2018.

[4] "2019 Hawaii State Energy Office Annual Report," Hawaii State Energy Office, December 2019.