Hawaii’s clean energy future should involve replacing Indonesian coal and oil with hydrogen by the mid 2020s — 2030 at the latest.
This skips the false economies of natural gas. It transitions Hawaii directly to a clean energy future where Hawaii’s true comparative advantage lies.
Hawaii has sun, wind, high electricity prices and a populace supportive of clean energy. But most advantageously, Hawaii has a ‘closed’ energy and road network. Vehicles and electricity can’t enter Hawaii through a land border.
This frees Hawaii from status quo market tyrannies bedevilling the clean energy transformation everywhere else. For Hawaii, isolation is a feature, not a bug.
To see how, start with Hawaii’s orthodox clean energy transformation envisaged between now and 2040. It was outlined in April by Hawaiian Electric (HECO) in a “Power Supply Improvement Plan” (page ES-7) submitted to the Public Utilities Commission.
In it , HECO (then subject to a takeover bid at the time by NextEra Energy) proposed hooking Hawaii on Liquid Natural Gas (LNG) imports for the 20-year period between 2020 and 2040.
In 2040, after the 20-year LNG investment was fully amortised, HECO blithely assumed unspecified ‘future alternative resources’ (it really says that) would suddenly emerge from nowhere to supply (overnight!) 40% of Hawaii’s electricity needs (!).
That’s not a plan. That’s a corporate hallucination.
It was pretty much based upon pushing LNG now and dumping the ‘what-next’ headache on a future generation of HECO executives, taxpayers and energy consumers.
It ignored the rapidly-compounding take up and the rapidly-compounding ‘Moore’s Law’ price reductions in new clean energy technologies, particularly sun and wind.
From 2008-2013, roof top solar installations grew by 17% annually, and would no doubt have grown even quicker if not stymied by utility limitations. Wind energy, meanwhile, grew by 7% per year. A series of utility grade solar installations also have been proposed.
Looking forward, even a sluggish 7% annual increase in renewable energy penetration is enough for Hawaii to reach 100% renewables by 2040. At 15% Hawaii could reach 100% renewables by 2027.
But let’s be reasonable. Hawaii needs ‘bridge fuels’ to the future. Hawaii also needs backstop supplies to offset renewable intermittency. The best of both worlds can be achieved by prolonging the oil import era until the mid 2020s, and then shifting progressively to large-scale hydrogen imports — first for baseload power, then for storage and load balancing of intermittent renewables.
Over time, island-made hydrogen will replace imports, thus achieving both 100% renewable energy and energy independence.
The place to look for inspiration: Japan.
In 2020, Japan plans to hold the “Hydrogen Olympics” in Tokyo, with as much of the games as possible powered by hydrogen.
In 2025, Japan‘s Kawasaki Heavy Industries plans to begin tanker exports of hydrogen from carbon capture and storage coal-fired power produced in Australia’s southern state of Victoria to Japan’s western city of Kobe.
Kawasaki estimates it can generate electricity in Japan from Australian hydrogen for US 16 cents per kilowatt-hour. Not only is that amount attractive by Hawaii standards for electricity generation (where imported petroleum produces power at about 22c/kwh), it’s also attractive as a transport fuel at about $2 a gallon gasoline in hydrogen vehicles.
In the decades to come, focusing Hawaii’s energy mix on electricity and hydrogen (instead of coal, oil, syngas and multiple vehicle fuel grades) injects valuable simplicity into the system.
Toss in scale economies, and the result will be lower costs, greater energy security and an increased state economic multiplier effect as less money drains offshore to pay for expensive and dirty imported coal and oil.
Given this, Hawaii should push harder in supporting onshore and offshore wind energy projects, rooftop and utility scale solar in Hawaii and a drive to progressively shift the state energy over to hydrogen.
A remarkable amount of legwork already has been done here and existing infrastructure looks friendly. For instance, large-scale offshore wind farms have been proposed for northwest and southeast of Oahu. Utility-scale solar projects have been proposed for central Oahu.
Hawaii Gas operates a 1,000 mile gas pipeline network on Oahu that already carries hydrogen.
Oahu’s Campbell Industrial Park, meanwhile, is set up for receiving tanker loads of oil…or hydrogen and turning it into power, as well as providing surplus hydrogen storage facilities for load balancing needs.
Finally, the public works boondoggle known as Honolulu Area Rapid Transit (HART) would benefit immensely from hydrogen-powered, last-mile shared vehicle solutions at its stations. This could help the economics of the troubled project.
All up, hydrogen presents a pretty attractive picture for the islands. It offers a future fifth pillar to the Hawaiian economy alongside tourism, the military, government and construction. It could transform Honolulu into a clean energy tech hub alongside Boston, Austin and San Francisco.