In the United States, 29 states, Washington, D.C. and three territories have adopted a mandatory Renewable Portfolio Standard (RPS) for their electric power systems, while eight states and one territory have set renewable energy goals. Many foreign nations have adopted an RPS as well. Thus far, almost all RPSs across the United States have met their interim goals with targets and timetables that vary widely. Hawaii’s RPS is the most ambitious, with a 100% target set for 2045 (though Vermont set a 75% target for 2032). This paper provides a case study of the Hawai’i RPS. The paper focuses on geographical issues and perspectives that may tease out the course of the states’ electricity future: sensitivity to climate change, population distribution, interisland rivalries, as well as the need for greater energy storage and complementary policies. An important complexity is the challenge of meeting electricity demand on six separate Hawaiian Islands (because of the lack of an interisland transmission cable), although all of them have substantial renewable energy resources.

KEY MESSAGE

As part of a push to lessen its dependence on fossil fuels and a commitment to reducing greenhouse gases, over the past several years, Hawai’i has initiated an aggressive renewable energy strategy. At the center of this effort is the commitment to a 100% Renewable Portfolio Standard (RPS) for its electric utilities set for 2045. The RPS is a popular policy tool that has been widely implemented across the United States. In order to understand the likelihood that such an ambitious outcome can be achieved, the comprehensive renewable energy policy mix that impacts utility customers needs to be highlighted.

INTRODUCTION

A Renewable Portfolio Standard (RPS), sometimes called a Renewable Electricity Standard or Clean Electricity Standard, is one of the most common and well known policy instruments used to promote electricity production from renewable energy sources, especially in the United States. It establishes a target and timetable to be met by covered electric utilities and is often implemented in phases. RPSs are set at the state level in the United States and vary widely in their requirements and are responsible for the majority of the increase in renewable electricity generation in the country since 2000 [1]. Most RPSs in the United States were enacted in the late 1990s and 2000s. Mandatory RPSs now exist in 29 states, Washington, D.C. and three territories [1].

The RPS has also been adopted outside the United States, although a feed-in-tariff (FiT) or feed-in premium is more commonly the policy instrument of choice internationally to encourage renewable electricity generation. Other policy instruments can be used to promote renewables (e.g., at the U.S. federal level, the production tax credit is especially important for wind power), and the options are not mutually exclusive. Nonetheless, an RPS-type policy for the electricity sector can be found in Germany, France, Sweden, Norway, the United Kingdom, Russia, China, India, Pakistan, Indonesia, Japan, South Korea, Brazil, Nigeria, South Africa and elsewhere [2].

An RPS, along with an FiT, can be a critical tool used by a state as part of a sustainable energy transition to reduce air pollution, greenhouse gas emissions, water use, promote employment growth or all of these. There is a large and growing literature on energy transitions, including geographic considerations and dimensions [3, 4]. Most of this literature argues that energy transitions are by necessity very slow because of gradual turnover of capital stock and slow rate of diffusion of new technology, although there may be exceptions, especially in smaller states [5, 6]. RPSs in the United States have varied widely in their time frames and standards, tradability of renewable energy certificates (RECs) and penalties among other details [1]. For example, the State of Wisconsin sets a modest 10% standard for 2015. Iowa, which created the first RPS in 1983, sets a modest power standard of 105 MW (long since surpassed), whereas Texas sets a power standard of 10,000 MW for 2025, which was reached 15 years early in 2010 [7].

Most U.S. states have implemented RPSs because they are politically popular. However, they are not the only policy instruments to achieve long-term energy policy goals. The effectiveness and cost of an RPS depend on careful selection of the RPS targets and timetables, catered to each state’s energy resources and population size, which can be too lenient (e.g., Texas and Iowa), too stringent or just right. Initial research found that RPS policies have had a significant and positive effect on in-state renewable energy development, although allowing the free trade of RECs can significantly weaken their impact [8]. The Lawrence Berkeley National Laboratory tracks the success of state RPSs in the United States, reaching their annual goals. Most states have met their interim overall RPS targets, with the notable exceptions of New York and Illinois, plus a few states missing their solar energy carve-out obligations (e.g., Illinois and New Hampshire) [1]. Thus, RPSs have generally achieved their goals in the United States.1 In this case study, the State of Hawai’i, a 100% standard for its electric utilities has been set for 2045.

CASE EXAMINATION

Why a 100% RPS in Hawai’i?

Providing an adequate energy supply and an electric grid on islands can be very challenging, given limited local resources and high costs of energy imports. This is one reason that the island nation of Japan has extensively developed nuclear power, an option not pursued in Hawai’i. Other Asian island nations such as the Philippines, Taiwan and Singapore largely rely upon imported fossil fuels. Similarly, high population and industrial development can significantly constrain energy alternatives. Geothermal and various ocean energy resources could be used for islands such as Hawai’i, including ocean thermal energy conversion, offshore wind and wave power. However, these technologies have thus far been limited to experimental and small scale projects in the state, owing to high costs and public opposition.

Lacking its own fossil fuel industry, the Hawaiian Islands have been highly dependent upon oil imports for many decades. Hawaii’s feedstocks for electric power generation include two-thirds of the total being provided by petroleum, and the rest almost equally split between renewable sources of energy and coal (the latter is mostly used on O’ahu). The state uses petroleum for 84% of its energy, including a high contribution from jet fuel given the greater need for air travel (Figures 1 and 2).

FIGURE 1.

Total electricity% generation by source in Hawai’i, 2016. Source: [38].

FIGURE 1.

Total electricity% generation by source in Hawai’i, 2016. Source: [38].

FIGURE 2.

Total energy consumption% by source in Hawai’i, 2015. Source: [38].

FIGURE 2.

Total energy consumption% by source in Hawai’i, 2015. Source: [38].

The State of Hawai’i initially passed a modest 9% RPS goal in 2001 that was to be met by the end of 2010 [9]. This was followed up in 2004 by mandatory RPS legislation that required a 20% standard to be met by the end of 2020, which was amended in 2006 and 2009 to require a 40% standard by 2030. The 100% RPS was approved on June 8, 2015 [9]. This RPS requires that each utility in the state must reach 100% of its net electric sales with renewable energy sources by the end of 2045.2 A separate, but a parallel Energy Efficiency Portfolio Standard (EEPS) was approved by the 2009 amendment. This law has changed Hawai’i, once the U.S. state most reliant on fossil fuels (mostly oil), to the one with the most ambitious plans for renewable energy development in the United States, if not worldwide. The latest status report to the Hawai’i Public Utilities Commission showed that the Hawaiian Electric Company and its subsidiaries (the Hawai’i Electric Light Company and the Maui Electric Company) had achieved a consolidated 26.8% RPS by the end of 2017, on target toward the 30% requirement for 2020 [10]. These utilities cover five islands: O’ahu, Maui, Moloka’i, Lana’i and the Big Island of Hawai’i. Farthest along is the Big Island, which is already over 56% dependent upon renewables. Separately, the Kaua’i Island Utility Cooperative (KIUC) reported that it had achieved a 44.36% RPS by the end of 2017, already exceeding the 30% requirement for 2020 [11].

The rationale for the 100% RPS in Hawai’i have included electricity prices three times the national average, substantial reliance on imported fossil fuels, high costs and impacts of global climate change and a 97% public support for expanding renewable energy development and similarly strong political support [12]. The state and county governments across Hawai’i (note that Honolulu is both a city and county, and there are no other cities in Hawai’i as all other sub-county units are either towns, villages or census-designated places) have been spending millions of dollars each year fighting the effects of climate change, for example, sea level rise, reduced rainfall and increasingly frequent storms. For example, over five inches of sea level rise in recent decades have contributed to the erosion of world famous Waikiki Beach in Honolulu, which is now almost entirely artificial [12]. Sea level rise claims about a foot of this beach each year. In addition, Hawaiian reefs are acutely sensitive to the effects of climate change such as coral bleaching, and since Hawai’i is an isolated archipelago with high levels of endemic species it is already the state with the highest number of endangered species [13, 14].

Challenges of Different Islands

Hawaii’s RPS is a statewide requirement for each of its electric utilities. There are six inhabited islands in the state, with a seventh privately owned (Ni’ihau, with a population under 200 and no electric utility), with no interisland electric power interconnection. Thus, there are six separate electrical grids in Hawai’i. Approximately 69% of the state’s 1.4 million people live on O’ahu, although the largest island in land area by far is the Big Island of Hawai’i. A proposal was first made in 1982 to build an interisland submarine cable to bring Big Island geothermal electricity to O’ahu. Cable plans were revived in 2007 and through State Act 165 in 2012 to transmit wind-powered electricity from the islands of Lana’i and Moloka’i (part of Maui County) to O’ahu [1517]. This seems economically efficient in theory, since the Hawaiian Islands south of O’ahu are either more spacious or sparsely populated compared to the densely populated demand center of O’ahu. However, the interisland cable proposal has not proven to be cost-effective in practice and the Hawai’i State Legislature repealed Act 165 by Act 205 in July 2017 [18]. This is because Hawaii’s interisland cable proposals have been very expensive and met with strong public opposition. Thus, the project is currently inactive though it could potentially be revived [19].

Given the lack of electric power interconnection among the Hawaiian Islands, for now at least each of the six main islands must achieve the 100% RPS independently. The large variation of population densities, undeveloped land and solar photovoltaic (PV) rooftop access has led electric utilities in the state to set varying schedules to reach 100%. The plan is for Moloka’i to achieve 100% first, in 2020, when the Big Island is forecast to reach 80%, Maui 63%, Lana’i 59% and O’ahu 40%. These latter islands would reach 100% by the end of 2040, 5 years early, though in the case of O’ahu this seems overly ambitious since it had only achieved 19.4% renewables in 2016 and 20.8% in 2017 [10, 20]. In the case of Kaua’i, KIUC expects to reach 63–70% renewables in 2020, though it has not committed to reaching 100% before 2045 [11].

Hawaii’s Energy Choices

As noted above, Hawai’i is making good progress toward meeting its 100% RPS. The contribution of different renewable energy resources in the mix at the start of 2017 is shown in Table 1. Hawaiian Electric Company and its subsidiaries, which operate on five islands, show large contributions from solar energy (mainly customer provided rooftop PV), wind power (on the Big Island and islands of O’ahu and Maui; see Figure 3), biomass/biofuels and geothermal power. Biomass energy in the state is dominated by the 90 MW H-Power (Covanta Honolulu Resource Recovery Venture) project, owned by the City and County of Honolulu (Figure 4). In addition, all the geothermal power is generated on the Big Island (Figure 5). In the case of Kaua’i solar power dominates, both rooftop PV and three large PV farms, the latter being the largest in the state (Figure 6).

TABLE 1.

Renewable electricity % use in Hawai’i

Type2017 on O’ahu, Big Island, Maui County2017 on Kaua’i2017 overall2045† on O’ahu2050† overall
Solar 36.3 80.9 38.4 61.7 39.67 
Wind 28.9 26.6 14.1 28‡ 
Biomass/biofuels 21.0 11.4 20.8 17.9 
Geothermal 11.4 10.5 30 
Hydro 2.4 7.7 3.6 6.3 0.33 
Wave 
Tidal 
Type2017 on O’ahu, Big Island, Maui County2017 on Kaua’i2017 overall2045† on O’ahu2050† overall
Solar 36.3 80.9 38.4 61.7 39.67 
Wind 28.9 26.6 14.1 28‡ 
Biomass/biofuels 21.0 11.4 20.8 17.9 
Geothermal 11.4 10.5 30 
Hydro 2.4 7.7 3.6 6.3 0.33 
Wave 
Tidal 

†Projected.

‡Assumes that 57% of this share will come from offshore wind power.

Sources: [10, 11, 20, 22, 23].

FIGURE 3.

Kaheawa Wind Farm on Maui. Photo taken by Patricia A. Gotschalk. Reprinted with permission.

FIGURE 3.

Kaheawa Wind Farm on Maui. Photo taken by Patricia A. Gotschalk. Reprinted with permission.

FIGURE 4.

The H-Power (Honolulu Program of Waste Energy Recovery) facility, which processes up to 3,000 tons of municipal solid waste per day and generates up to 90 MW of electricity. Source: Reprinted with the permission of Barry Nakamoto of Covanta.

FIGURE 4.

The H-Power (Honolulu Program of Waste Energy Recovery) facility, which processes up to 3,000 tons of municipal solid waste per day and generates up to 90 MW of electricity. Source: Reprinted with the permission of Barry Nakamoto of Covanta.

FIGURE 5.

The Puna Geothermal Venture Power Plant (30 MW) on the Big Island of Hawai’i. Source: U.S. Department of Energy.

FIGURE 5.

The Puna Geothermal Venture Power Plant (30 MW) on the Big Island of Hawai’i. Source: U.S. Department of Energy.

FIGURE 6.

Tesla’s 13 MW solar farm (55,000 photovoltaic panels) and 52 MWh battery Powerpack system on Kaua’i. Source: reprinted with permission of Tesla and Kaua’i Island Utility Cooperative.

FIGURE 6.

Tesla’s 13 MW solar farm (55,000 photovoltaic panels) and 52 MWh battery Powerpack system on Kaua’i. Source: reprinted with permission of Tesla and Kaua’i Island Utility Cooperative.

Hawai’i has many difficult energy choices to make as it works toward a fossil fuel and nuclear power-free electricity future [21]. This includes resisting proposals for natural gas imports, expanded geothermal energy and biomass energies, expanded energy storage for intermittent renewable energy, unpopular proposals for large wind farms on Lana’i and Moloka’i and the interisland submarine cable among others. While the Hawaiian Electric Company has committed to meeting the 100% RPS 5 years early, there are alternative energy mixes that could accomplish the goal. Several modeling studies have been conducted along with extensive stakeholder involvement in the energy planning process. One modeling study for 2045 conducted at the University of Hawaii, for O’ahu only, resulted in strong emphasis on rooftop PV, supplemented by biomass (including the conversion of existing thermal plants to biodiesel), wind and pumped storage hydroelectric power (Table 1). The same study considered a scenario that included extensive reliance on hydrogen fuel cells, a prohibitively expensive option [22]. A national modeling study that included a Hawai’i energy scenario for 2050, as part of a 100% renewable energy scenario for all sectors for all states (though without any biomass energy), resulted in a more even split between solar, wind and geothermal resources (Table 1) [23]. What is notable about the study findings is the strong reliance on wind power in offshore Hawai’i, as well as significant expansion of geothermal power, which has faced strong public opposition on the Big Island [24].

The authors of Hawaii’s energy modeling studies generally assume a high degree of electrification of the transportation sector, especially through widespread use of electric vehicles (EVs). This is because electrification of the transportation sector increases overall energy efficiency and cost-effectiveness, also reducing the need for new energy resources [22, 23, 25]. Hawai’i already has the second highest per capita ownership rates of EVs after California. Thus, grid-scaled battery storage sites, as well as at decentralized locations including homes with PV power, will become increasingly needed in Hawai’i to more effectively utilize renewable energy beyond the joint PV farm and battery storage facilities on Kaua’i [11, 26, 27]. In support of the RPS and increased electrification on Hawai’i, the state has also undertaken efforts to expand end-use energy efficiency improvements. This may be less important than in many mainland states since due to the tropical climate of Hawai’i little heating is needed besides water heating. Hawaii’s EEPS is now implemented separately from the RPS. The goal is to reduce electricity usage by 4,300 GWh or 40% in 2030 compared to the 2007 level, mainly through the promotion of efficient heat pumps, solar water heaters and air conditioning units among other technologies [28].

Complementary Policies

In addition to the RPS, there are a wide variety of other tools used in Hawaii’s renewable energy policy mix. Many have recently been implemented and arguably more policies will need to be added to this mix in order to achieve the 100% renewables goal (Table 2). Recent economic modeling and analysis suggest that significant changes to the electric utility incentive system are critical [22]. Three areas where governments can target incentives are as follows: encouraging the early phase-out of fossil fuel-based power plants; greater support for distributed and community renewable energy projects; and the development of large-scale utility or community battery storage for excess renewable electricity generation beyond the facilities in Kaua’i, similar to those recently installed at Hornsdale Power Reserve in South Australia [27].

TABLE 2.

A taxonomy of procedural and substantive policy instruments supplementing Hawaii’s RPS

Governing resource and target need
InformationAuthorityTreasureOrganization
Purpose of tool Substantive Hawaii Clean Energy Initiative (HCEI) Hawaii Department of Business, Economic Development, and Tourism (DBEDT)—State Energy Office (Renewable Energy Facilitator, Green Energy Market Securitization [GEMS])
Hawai’i Public Utilities Commission (RPS and FiT)
Interconnection Standards HI PUC Order No. 19773
Hawaii Green Infrastructure Authority (GEMS)
Hawaii Department of Taxation (RETITC)
U.S. Internal Revenue Service (ITC) 
Hawaii Renewable Energy Technologies Income Tax Credits (RETITC)
Hawaii Feed-in Tariff (FiT)
Hawaii Renewable Fuels Tax Credit
Hawaii GEMS Program
Federal Renewable Electricity Production Tax Credit (PTC)
Federal Investment Tax Credit (ITC) for home solar energy systems
USDA—Biorefinery Assistance Program 
Kaua’i Island Utility Cooperative
Hawaii Technology Development Corporation 
Procedural HCEI Energy Efficiency Charrette Work with utilities and other developers on all applicable planning and permitting processes to expedite the development of renewable energy resources
HCEI Executive Management Team 
DBEDT—Energy Security Special Fund DBEDT—Renewable Energy Facility Siting Process 
Governing resource and target need
InformationAuthorityTreasureOrganization
Purpose of tool Substantive Hawaii Clean Energy Initiative (HCEI) Hawaii Department of Business, Economic Development, and Tourism (DBEDT)—State Energy Office (Renewable Energy Facilitator, Green Energy Market Securitization [GEMS])
Hawai’i Public Utilities Commission (RPS and FiT)
Interconnection Standards HI PUC Order No. 19773
Hawaii Green Infrastructure Authority (GEMS)
Hawaii Department of Taxation (RETITC)
U.S. Internal Revenue Service (ITC) 
Hawaii Renewable Energy Technologies Income Tax Credits (RETITC)
Hawaii Feed-in Tariff (FiT)
Hawaii Renewable Fuels Tax Credit
Hawaii GEMS Program
Federal Renewable Electricity Production Tax Credit (PTC)
Federal Investment Tax Credit (ITC) for home solar energy systems
USDA—Biorefinery Assistance Program 
Kaua’i Island Utility Cooperative
Hawaii Technology Development Corporation 
Procedural HCEI Energy Efficiency Charrette Work with utilities and other developers on all applicable planning and permitting processes to expedite the development of renewable energy resources
HCEI Executive Management Team 
DBEDT—Energy Security Special Fund DBEDT—Renewable Energy Facility Siting Process 

Source: [39]

The Hawai’i State Energy Office has been tasked with leading the state toward its 100% renewable energy goal for the power sector by 2045, and independence from fossil fuels. It is also responsible for the HCEI. However, the State Auditor recently audited this agency and had difficulty determining what the Energy Office does, how well it does it and if it deserves any credit for contributing toward the achievement of the RPS goal [29]. Consequently, any new energy policies in Hawai’i will more likely be developed or implemented by a combination of the State Legislature, Public Utilities Commission (PUC) and the Division of Consumer Advocacy (DCA) of the Department of Commerce and Consumer Affairs.

Policy for early phase-out of the fossil-fueled power plants in Hawai’i would help to achieve the RPS goal, since the utilities lack incentive to retire the plants early on their own. For example, Hawai’i lacks access to cheap natural gas supplies to compete with oil and coal at its power plants. Recently, 20 countries, five Canadian provinces, two U.S. states (Oregon and Washington) and numerous cities committed to the early phasing out of fossil fuel plants as part of the nonbinding Powering Past Coal Alliance [30]. Across the United States, there is a growing demand for renewable power at the cost of coal-generated power [31]. In Michigan, Consumers Energy announced in 2017 that it is planning to stop using coal to generate electricity by 2040 and generate 40% of its power from renewable energy sources [32].

The best-known example of policy-level coal phase out occurred in Canada’ Province of Ontario. In 2003, Ontario’s five coal-generating plants generated 7,587 megawatts of electricity, a quarter of its power supply. Ontario’s coal consumption peaked that year at 18.6 million metric tons [33]. Responding to concerns about air pollution, in 2004 the provincial government set a goal to phase out all coal-fired electricity by 2007 [33]. Like Hawai’i, all of the province’s coal was imported. The response, one of the most ambitious low-carbon-generating strategies in the world, has been to develop new plants fueled by natural gas and renewable energy sources. Much of the energy shortfall from coal plants was made up by additional nuclear and hydro power generation. However, other clean energy sources have been used, primarily wind [34]. Ontario has developed several renewable energy policies, including a FiT, which ended in 2017. Short of a legislative mandate in Hawai’i to retire its fossil-fueled power plants early, the state could also strengthen its FiT (which does not apply on Kaua’i), or KIUC and the PUC could use its performance-based regulation docket No. 2018-0088 among the electric utilities to examine the cost-effectiveness of keeping fossil-fueled power plants in operation.

There is also a need for greater support of distributed renewable energy production in Hawai’i if the state is to meet its RPS goal. This is because the PUC and utilities ended their Net Energy Metering (NEM) programs for rooftop PV systems in October 2015 (Kauai’s program closed earlier in 2008). These programs provided substantial incentive for over 60,000 customers to generate renewable electricity. Since then, new self-generating customers can enroll in a Customer Grid-Supply program, which compensates these customers for electricity exports to the grid but only at wholesale power rates (which may be just half of the retail price of electricity, the compensation level under NEM) [35]. One way to make up for this reduced customer incentive would be to increase the Hawaii Renewable Energy Technologies Income Tax Credit (RETITC), which is currently capped at $5,000 (Table 2). An increasing number of new self-generating customers will opt for batteries to store excess generation, and large-scale home batteries cost $6,000 to $7,500 (including the installation cost). If the State Legislature increased the current cap on the RETITC from $5,000 for a 5 kW system to $10,000, or to directly provide an investment tax credit or rebate for some of the cost of home battery systems, many more customers would install energy storage systems. Such bills were considered by the State Legislature in 2014 and 2016 [36].

Community-Based Renewable Energy is another new option for some utility customers in Hawai’i since 2018. These projects would be community-sited PV projects that are not on individual home rooftops, but are bought into by renters and multi-family housing units and compensated in a manner similar to the Customer Grid-Supply program. The PUC and DCA should review this program periodically to determine if it is cost-effective and whether the compensation rate should be increased [37].

The Hawaiian Electric Companies and their partners are slowly developing various energy storage projects on their own, including battery systems and flywheels, but more can be done. Policies are needed to better incentivize utilities and communities to establish larger scale energy storage systems. For example, a failed bill in the 2016 session of the Hawai’i State Legislature proposed an Energy Storage Portfolio Standard. This would have the advantage of adding flexibility to cost-effective energy storage plans. The existing Green Energy Market Securitization program could also be used for this purpose [36].

CONCLUSION

The RPS has been an effective policy instrument in many U.S. states as well as in other countries. Hawaii’s’ policy-makers have set a 100% RPS goal by 2045 for the four electrical utilities that currently serve the state. Currently, the state’s RPS is close to meeting the interim 30% standard for 2020. Challenges such as the lack of electric power interconnection between the Islands require that a suite of other related policies be enacted. Here, we highlighted complementary policies and their importance to understanding the feasibility of achieving this ambitious transition. We identified the “supply” of renewable energy policy instruments that are currently being implemented by state and federal agencies. Despite the enthusiasm for renewable energy for electric power generation in Hawai’i, its success is ultimately dependent on the target behavior of electrical utilities and their customers. While Hawai’i is geographically isolated and somewhat unique, its energy transition case should be replicable elsewhere.

CASE STUDY QUESTIONS

  1. 1.

    Why was Hawai’i the 1st state to enact a 100% RPS?

  2. 2.

    Why is 100% renewable electricity needed on all major islands?

  3. 3.

    Why is grid-scale energy storage needed?

  4. 4.

    What new policies are needed to complement Hawaii’s RPS and meet the standard?

AUTHOR CONTRIBUTIONS

The authors contributed equally to the case study manuscript.

FUNDING

No funding was provided for preparation of this case study.

COMPETING INTERESTS

The authors have declared that no competing interests exist.

Notes

Notes
1.
It should be noted that starting in 2016 the majority of renewable electricity capacity additions in the United States have not been attributable to RPS requirements [1].
2.
Hawaii’s RPS allows for customer-sited, grid-connected renewable energy systems to count toward utility compliance, yet electrical energy savings brought about by the use of energy efficiency technologies or renewables to displace or offset electricity demand will no longer count towards compliance. This in essence double-counts customer provided, distributed energy sources such as solar PV power generation, yet the Hawai’i State Legislature has thus far failed to fix the problem.

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