On Thursday, Hawaiian Electric issued a long-awaited request for proposals for about 900 megawatts of renewable energy and energy storage projects. It’s the utility’s second major round of contracts in the past year seeking to marry variable solar and wind power with the capacity and flexibility of batteries.
But the Variable Renewable Dispatchable Generation and Energy Storage RFPs that opened on Thursday are a bit more complicated than their headline figures — seeking “technologies equal to 594 megawatts of solar for Oahu, 135 megawatts for Maui and up to 203 megawatts for Hawaii Island” — might indicate.
Unlike its first massive solar-storage procurement in January, HECO’s new RFPs are broken into a number of specific projects and specific needs across its three islands, with a mix of different technologies required. This complexity comes from the fact that these RFPs have been structured to help replace two big fossil-fuel-fired power plants to close in the next five years — the AES Hawaii coal-fired power plant that serves about one-sixth of Oahu’s peak demand, set to retire in 2022, and the oil-fired Kahului plant on Maui, set to close in 2024.
This impending loss of two big spinning generators has pushed HECO and regulators to approve a mix-and-match of technology combination to replace them. That will make them hard to compare directly to HECO’s first round of procurements, as well as the utility-scale solar-plus-storage bids on the mainland.
Developers winning HECO’s first-round RFP in January shocked the industry with prices ranging from 12 cents per kilowatt-hour to a record-breaking 8 cents per kilowatt-hour, as compared to average Hawaiian solar-storage project prices of 11 cents per kilowatt-hour in 2017 and 13.9 cents per kilowatt-hour in 2016.
They also came with some novel structures, such as PPAs that replaced payments based on energy deliveries to lump sums based on net energy potential and availability, to ensure greater dispatchability for critical hours of the day, Ravi Manghani, head of solar research for Wood Mackenzie Power & Renewables, noted.
But “the Phase 2 RFP takes a more technically advanced approach toward resource planning,” Manghani stated in a July GTM Squared article in July, soon after HECO submitted its plan to the Hawaii Public Utilities Commission.
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