What can other islands learn from Kauai’s progress in renewable energy?
As we moved from less than 10% renewable energy in 2010 to nearly 70% in 2021, our rates have stabilized significantly. In 2002, Kauai’s rates were more than 70% higher than Oahu’s; as of last month, our rates were 12% lower. KIUC’s elected board of directors has been a key component of our success, as they are very focused on community needs.
What will it take for Kauai to become 100% renewable, all the time? What are the obstacles to achieving that goal?
We’ve already had success in achieving 100% renewable for several consecutive hours, on sunny days. However, getting to 100% renewable 24/7/365 is a puzzle we’re still piecing together. Diversifying our renewable mix to include additional hydro generation along with more short- and long-duration storage will be key to ensuring we’re operating a 100% clean grid that meets reliability standards.
It seems clear that utilizing biofuels in our existing conventional generators will be part of that mix; however, affordability will determine to what extent biofuels will contribute to our renewable future. Our board of directors is in the process of creating a new strategic plan, and reaching 100% renewable is one of the most important goals.
Describe Kauai’s mix of renewable energy sources. How do you foresee that balance (i.e., use of biofuels, wind, etc.) changing in the near and distant future?
KIUC’s renewable energy mix is about 40% utility solar, 20% customer solar, and the remainder from hydropower and biomass. We are currently exploring a fourth solar+storage project, but the most important project in development is the West Kauai Energy Project (WKEP). That’ll be a pumped-storage hydro facility coupled with solar, and will deliver up to 25% of our power needs once operational. WKEP will help balance out the large amount of solar on the grid, and is the only feasible and affordable firm renewable power technology currently available to us.
What are the challenges of working with for-profit companies to meet your goals? KIUC partnered with Tesla and AES Corp. on major “solar-plus-storage” projects, which furthered the utility’s use of renewable energy. What were the hurdles/benefits/lessons learned?
The advantages of partnering with companies like Tesla and AES are numerous for KIUC. Perhaps most importantly, as a not-for-profit cooperative, KIUC is not currently eligible for tax incentives for solar projects. The value of tax credits for the Tesla facility at Kapaia and AES at Lawai and Kauai’s Pacific Missile Range Facility helped deliver a significantly lower cost of energy than KIUC could have achieved on its own. Secondly, as a small cooperative, carrying the large capital costs of these projects on our balance sheet would be somewhat risky.
With the West Kauai Energy Project, costing more than $200 million, we are fortunate to attract a developer like AES, a Fortune 500 global company with vast experienced in hydro projects worldwide, because it’s simply too large and complex a project for us to develop on our own.
How stable and emergency- proof is Kauai’s grid? How would KIUC recover from a major storm like Iniki, if subjected to that kind of natural disaster in the next decade? How long would recovery take?
We have a very stable grid. KIUC has led the state in both reliability and renewable generation for the past three years. In fact, in 2020, we recorded our best ever reliability statistics. That being said, no grid is emergency proof. The good news is, after Hurricane Iniki we had to rebuild most of our infrastructure, and we’re much more resilient today than we were in 1992. We also now have major generating sources located throughout the island, so we should have the ability to temporarily power individual communities as microgrids until we can get to full restoration.
Bonus question:
You testified before the U.S. Senate that the structure of investment tax credits causes the co-op to use “complex project structures” or give ownership of renewables projects to for-profit companies to qualify, whereas direct payments for energy innovations would streamline the process and be less costly. Is there any indication that the federal government is moving in this direction? Can you give some idea of the costs/cost-savings involved?
The federal government appears to be close to passing comprehensive energy legislation that contains many renewable incentives, including a direct pay option related to renewable tax credits for cooperatives. We are still evaluating the full impact, but it appears positive. The direct pay option would allow KIUC to realize 100% of federal tax credits and provide the ability to own a greater portion of our generating assets, rather than being reliant on third parties for power. Being able to tell the KIUC story directly to Senate decision-makers was a tremendous opportunity, and we’re grateful to Sen. Mazie Hirono for allowing us that platform.
THE BIO FILE
>> Title: President/CEO, Kauai Island Utility Cooperative (KIUC)
>> Professional: Joined KIUC in 2008; president/CEO since 2010. Certified public accountant (Ohio); certified management accountant
>> Education: Bachelor’s degree, accounting and finance, State University of New York at Brockport; M.B.A., Kelley School of Business, Indiana University
>> Family: Wife, Carla (married 33 years); daughter, Kathleen, student at Richardson School of Law, University of Hawaii
>> One more thing: While KIUC is the only operating electric cooperative in Hawaii, throughout the U.S. there are more than 800 electric cooperatives serving 42 million people in 48 states.
