A couple of big, dark clouds have formed over what had been a really bright future for dramatically expanding solar power generation on Oahu in the next couple of years.
One renewable energy development firm recently terminated an agreement to produce electricity from a proposed 60-megawatt
solar farm in Kunia, while the developer of a project twice as big in the same area is on the brink of possibly doing the same.
The pair of planned solar farms, Kupehau Solar and Mahi Solar, represent Oahu’s two biggest renewable energy projects approved by state regulators and slated for development by 2023.
Kupehau and Mahi combined were expected to produce enough electricity to power 57,000 homes.
Each project also included a
battery system — the two largest proposed on Oahu, with 240 megawatt-hours for Kupehau and 480 megawatt-hours for Mahi — to store electricity made during the day for use at night, when most power is needed by customers.
The trouble with the two projects is due to cultural site impacts in one case and rising costs related to global supply chain issues in the other.
For Kupehau it’s possible that a downsized version of the project could resurface later. And for
Mahi the envisioned 120-megawatt project could be developed several years from now after going through a new competitive bidding and regulatory approval process if ongoing efforts to preserve the current plan fail.
Both projects represent major contributions toward achieving a state goal to produce all electricity in the islands from renewable sources by 2045.
The two projects are among about 15 planned Hawaii solar farms with state Public Utilities Commission approval after being selected through competitive bidding by Hawaiian Electric, the regulated utility serving Oahu, Maui County and Hawaii island.
On Oahu, Hawaiian Electric
is under pressure to have more
renewable energy offset an impending Sept. 1 shutdown of the
island’s main base-load power generator, a coal-fired plant operated by AES Corp.
The 180-megawatt AES plant has the same capacity as the Kupehau and Mahi projects combined and satisfies 16% of Oahu’s peak power needs. However, the previously projected start dates for the two solar farms were in mid- and late 2023 and not part of the near-term transition of AES coal power.
The most important near-term addition of renewable energy is a 185 megawatt-hour battery system called Kapolei Energy Storage. This project is slated for operation at the end of this year and is on schedule.
However, there has been some recently eroded confidence about two planned solar farms starting up this year as planned.
In December, Hawaiian Electric notified the PUC that the planned 36-megawatt Waiawa Solar project with 144 megawatt-hours of battery storage became at risk for missing its Sept. 30 start date. The same thing happened in November for a 12.5-megawatt project with 50 megawatt-hours of storage, AES West Oahu, which has a planned Sept. 7 start date.
The utility company has said it has sufficient extra generation capacity to ensure Oahu’s electricity needs are satisfied this year even if some projects are delayed or worse.
“Given the current projected commercial operation dates provided by the various project developers from the first two phases of our renewable energy procurements, Hawaiian Electric doesn’t anticipate system reliability or stability issues for Oahu when the AES coal plant shuts down on Sept. 1, 2022,” Rebecca Dayhuff Matsushima, the utility’s vice president of resource procurement, said in a statement.
“Hawaiian Electric continues to work with renewable energy project developers dealing with delays or other issues,” she said.
The problem for Kupehau is that its developer, a U.S. affiliate of South Korean-based Hanwha Group called 174 Power Global, discovered cultural sites on 240 acres of low productivity and inactive agricultural land in Kunia where it planned to erect thousands of solar panels.
On Dec. 13, Hawaiian Electric
notified the PUC that Power Global had terminated the Kupehau power purchase agreement Dec. 6 after unsuccessful efforts to downsize the project in a way where the power purchase agreement could be amended.
“Hawaiian Electric appreciates Kupehau’s collaborative efforts
in exploring alternative options,” the utility said in its notice. “However, considering that any of
Kupehau’s alternate proposals would require significant modifications to the sizing, the parties determined that it would not be viable to amend the (power purchase agreement) for a potential alternate project.”
The utility company also said any agreement on an alternate plan for Kupehau would need to be submitted as a new project for PUC review.
For the Mahi project, renewable energy firm Longroad Development Co. alerted Hawaiian Electric in September that it was encountering supply chain issues related to the coronavirus pandemic. In October the company said its guaranteed start date at the end of 2023 had been pushed back to mid-2025, PUC filings show.
Boston-based Longroad also sought to raise its sale price for electricity above what had been previously agreed to by Hawaiian Electric and approved by the PUC. The developer said increased costs for shipping and other things largely related to supply chain
issues necessitated a higher price.
Longroad “cannot move forward with the project without the full proposed unit price and otherwise would have no choice but to declare the (power purchase agreement) null and void under the terms of the agreement,” the company said in an October letter to the PUC after rejecting a counteroffer price from Hawaiian Electric.
In November the PUC let Long-road know that it isn’t inclined
to consider the developer’s proposed price increase.
“The Commission is concerned about the near-term impacts on other renewable projects and long-term implications for competitive bidding,” the PUC said in a letter.
Longroad and Hawaiian Electric agreed to extend a deadline for amending the Mahi power purchase agreement to Jan. 10 in hopes of reaching a solution to save the project. No update could be obtained Monday.
Longroad had let the PUC know in October that it could potentially rebid the project during a future round of competitive renewable energy project proposals sought by Hawaiian Electric, though in that case an expected operating date would be in 2026 or 2027.