At midnight on Sept. 1, Hawaii will celebrate a major milestone for its power generation: retirement of the last coal-fired power plant used by Hawaiian Electric.
That stems from the conclusion of a 30-year power purchase agreement between Hawaiian Electric and AES Corporation, which first yielded the plant at Campbell Industrial Park on Oahu in 1992. It’s a 180 MW facility and one of Hawaii’s largest emitters of greenhouse gases. According to Hawaiian Electric figures, it pumped the equivalent of approximately 1.5 million metric tons of CO2 into the air annually.
Thanks to the onboarding of various renewable resources and continuing use of existing power plants, the retirement is not expected to negatively impact generation capacity or the state’s reserve margin. However, while the cost of discontinuing the project had been only about $2 per month initially, the surge in oil prices caused revised estimates for Hawaiian Electric customers. Now, as a result of the closure, the typical Oahu resident could see bills jump about 7 percent, or $15, per month beginning in October.
“This is a critical turning point in the long-term transition of Hawaii’s energy landscape. Unfortunately, the timing has converged with global events that are currently increasing the cost of electricity,” Shelee Kimura, president and CEO of Hawaiian Electric, said. “We know that paying more for an essential service like electricity will impact many households and businesses, particularly at a time when other costs are rising. We wanted to let customers know the situation in advance so they can plan and we can help them with options. We’re also seeing some encouraging signs that oil prices are declining and we’re hopeful this will help lower rates in the coming months.”
There are other reasons for hope in the pipeline as well. Currently, nine renewable energy projects should be brought online on Oahu through 2024, despite delays caused by supply chain and other issues. These include a mix of solar and battery storage projects. All will be locked in at a contracted price, generally ranging from 9 to 13 cents per kW hour, and in this way, add to the island’s long-term electricity price stability.
While Hawaiian Electric and AES had not previously given any indication that they would renew the 30-year contract for this last coal plant regardless, Act 23 of 2020 under Hawaiian law banned any extension of that contract or any future use of coal in the state’s power generation.
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