The Hawaii Electric Company (HECO) has issued an enormous request for proposal (RFP) for 60MW to 200MW of energy storage across one or more systems with 30 minutes of storage capacity. This is the second energy storage RFP issued in Hawaii in the past several months, as the Kaua’i Island Utility Cooperative issued a much smaller, quickly oversubscribed RFP in March.
Hawaii is the first market to test the limits of renewable integration, and customer PV applications have already been throttled. As much as 11% of HECO's customers have rooftop solar systems across 95% of the population of Hawaii covering the islands of Oahu, Maui, Lanai, and Hawaii. HECO has had to issue several precautionary measures to deal with over-voltage and power backflow, and requires a technical review for any system that lies on a circuit with a high percentage of distributed generation.
The HECO RFP comes just one day after the Hawaiian Public Utilities Commission (HPUC) rejected the utility's integrated resource plan. HPUC cited that the plan failed to respond to emerging renewable energy integration challenges, improve the interconnection process for distributed photovoltaic (PV) systems, and embrace customer demand response (DR) programmes. The bold move by HPUC to reject HECO’s integrated resource plan acknowledges that the utility faces real physical and business challenges attributed to the growth of distributed generation. However, HPUC noted that the plan failed to demonstrate HECO’s intent to become a utility of the future despite the integration challenges it faces. HPUC has issued a white paper which calls for the utility to address the growth of distributed generation by increasing flexibility, reducing fossil fuel generation and adopting demand response programmes.
HECO has been providing a locational value map for its customers looking to install distributed solar to determine if they are in an area where a technical review might be required. However, upon further inspection the locational value clearly demonstrates just how many circuits are testing the limits of grid stability, as seen by the number of areas with greater than 75% distributed generation of peak load (see Figure 1). While specific circuits may test the limits of distributed generation, Germany has recently set a record for renewable generation with 75% renewable electricity generated on 11 May, while a whopping 27% of total electricity generated came from renewable sources in the first quarter of 2014.
Hawaii burns more oil than any other state and has to ship it in, which contributes to an attractive value proposition for solar PV and energy storage systems, given the high incumbent cost of electricity. However, HECO has come under fire for favouring its own oil burning plants while curtailing a wind project on the island of Maui. Such curtailment would likely better be served through demand response resources as per the PUC’s white paper suggestion.
HECO will in many ways serve as a case study for other parts of the world as it tests the limits of renewable integration. The PUC rejection and HECO’s subsequent RFP are further changing the landscape of how power can be managed in areas seeking to support further growth of distributed generation. To date, Hawaii has installed 58MW and 38MWh of electrochemical energy storage across 18 projects in the state according to Lux Research’s proprietary Grid Storage Data Tracker.
The RFP would more than double the state’s existing energy storage capacity. If HECO chooses to fulfill the entirety of its 200MW RFP with a single energy storage system, it would be the largest installation in the world to date. AES recently announced its intent to build a 100MW energy storage system in Ireland, but currently no deployed electrochemical energy storage systems are greater than 40MW in capacity. Those interested in deploying energy storage systems should engage immediately as the intent to bid deadline for HECO’s RFP has been extended to May 29th. HPUC’s landmark rejection of HECO’s integrated resource plan will be a case study for all areas where distributed generation could eventually pose a threat to both grid stability and the business models of utilities.
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