Kauai’s nonprofit electric utility cooperative anticipates boosting its renewable-energy production by 25% with a proposed hydro and solar electricity project.

Kauai Island Utility Cooperative has contracted for AES Corp. to finance, develop and operate the dual-­energy project, which is known as the West Kauai Energy Project and would become the largest hydroelectric plant in the state.

The project would partly generate electricity by directing mountain stream water through turbines, including water recirculated back up to higher elevations for storage and then release to the turbines at night to meet peak electricity demand. A solar farm linked with the hydro plant would power the pumps and also generate electricity for the grid, with some solar energy being stored in batteries for use at night.

“This project’s integration of pump storage hydropower with large-scale solar power is unique in the energy industry,” KIUC President and CEO David Bissell said. “Working with AES helps keep this important project moving forward while minimizing risk to our cooperative. Upon completion, the facility will operate at a cost that will benefit KIUC’s members for decades.”

KIUC estimates the project, which is projected to come online in 2024, would offset the use of 8.5 million gallons of fossil fuels annually and could save ratepayers $157 million to $172 mil­- lion over 25 years based on oil cost projections.

The utility said it expects its cost for electricity from the project to be at least 34% below any of its existing utility-scale solar facilities.

The project also is expected to raise the utility’s total share of renewable energy to over 80%. The utility is close to 60% now, and the state has a goal to reach 100% by 2045.

“To deliver solar-storage at such a low price, along with the long-duration hydro storage, replacing diesel with substantial amounts of firm and renewable power, along with all of the community and environmental benefits that come with the project is remarkable,” Bissell said. “Accomplishing all of that while saving hundreds of millions of dollars is something we can all be proud of.”

KIUC filed a power-­purchase agreement for the project with the state Public Utilities Commission on Dec. 31. The proposed agreement is subject to the commission’s approval.

An environmental assessment is also being produced, and a draft is expected to be filed with the state Department of Land and Natural Resources by March.

The utility said the project will involve rehabilitating existing irrigation ditch infrastructure and reservoirs and provide irrigation water to support diversified agriculture on state-owned lands.

Specifically, the project will rehabilitate the Puu Opae, Puu Lua and Mana reservoirs and the related ditch system infrastructure. The utility also said public access and recreational opportunities associated with Puu Lua Reservoir will increase.

In addition, historic water diversion structures in Kokee will be modified to restore and increase flow to the Waimea River in compliance with the instream flow standard established by the Waimea Watershed Agreement and adopted by the Commission on Water Resources in 2017, the company said.

When operational, the solar array will contribute up to 35 megawatts directly to the grid and will store up to 240 megawatt hours for dispatch during the evening peak. The hydro resources are expected to produce 24 megawatts on average daily, which includes 12 hours of storage to be used overnight.

Marco Mangelsdorf, president of Hilo-based Pro Vision Solar, hailed the announcement.

“If approved by the PUC, this project will be like no other renewable-power facility in the world,” Mangelsdorf said. “The additional solar resources and this firm hydropower will complement renewables already on KIUC’s grid and bring the utility beyond 80% renewable by 2024, well ahead of the state’s established targets. An important benchmark will have been established for all future clean-energy projects in Hawaii.”

Electricity generation on Kauai today includes rooftop solar, utility-scale solar, a biomass plant and a number of small hydroelectric generation facilities.

KIUC has completed two solar-plus-storage renewable projects in partnership with AES — a 20-megawatt facility in Lawai and a 14-megawatt facility at the Pacific Missile Range Facility. AES has more than 200 megawatts of solar, solar with storage, and wind resources in operation or under development across Hawaii.