December 9, 2019
Hawaii

Molokai, Lanai renewable energy bids solicited

Lee Imada, Managing Editor | The Maui News | Dec 7, 2019 | www.mauinews.com

Molokai will have 78 percent of its power supplied by renewable sources and Lanai 55 to 61 percent by 2023 under a procurement process started by Maui Electric Co.

The Public Utilities Commission on Monday approved the utility’s plan to issue a request for proposals for wind and solar power paired with energy storage for the two islands. The projects would come online in 2023.

Estimated targets being sought for Molokai are the equivalent of about 4 megawatts of solar or 3.6 MW of small wind, specified as turbines 100 kilowatts or less, and paired with energy storage. A portion of the Maui Electric-owned Molokai property at Palaau also is being offered at no cost to developers as a potential site.

On Lanai, the company is seeking renewable energy generation equivalent to up to 9.5 MW of solar paired with energy storage on land owned by Pulama Lana’i.

In August, MECO began another round of procurements for renewable energy on Maui – 295 gigawatt-hours of renewable energy and 58 GWh of power storage a year. The proposal deadline was Nov. 5 with the utility currently evaluating the proposals. The final selection of developers is scheduled to be announced May 8.

At that time, the utility said it would be embarking on its renewable request for proposals later in the year for Molokai and Lanai. This process is all part of MECO and the state’s goal to rely on 100 percent renewable energy by 2045.

MECO spokeswoman Shayna Decker said Tuesday that Molokai’s renewable energy goals could be met by multiple companies. On Lanai, the utility was looking at one project.

On Molokai, the 78 percent of renewable energy goal also includes 2.2 MW of rooftop solar and the 2.64 MW with 3 MW battery storage by Moloka’i New Energy Partners. The developer, Chicago-based Half Moon Ventures company, anticipates coming online in 2020, Decker said.

Moloka’i New Energy initially was set to be operational by the end of this year, but Decker said the developer submitted recent changes to the type of technology the project will use. Supplemental reviews of the changes to ensure that the project can safely be interconnected to the grid currently are taking place.

On Lanai, there is an existing solar facility, Lanai Sustainability Research, a 1.2-MW with 1.25-MW battery storage system, which started operating in December 2008. In October, the facility agreed to pay MECO $15,000 a month to cover $360,000 in overcharges when its battery system was down.

Of that total, $11,000 will account for the battery system being inoperable, a cost that will remain in effect until the battery is replaced or the power purchase contract is terminated. Another $4,000 will be applied until the $360,000 in overpayments is recovered or the agreement is terminated, at which time the company would have to pay the rest of the remaining balance in a lump sum.

Decker said that MECO is evaluating its options regarding the project, including selecting a larger project and terminating Lanai Sustainability. An incentive to MECO terminating the contract is the high price it is paying for power, $0.28276 per kilowatt-hour through 2033. Two recently proposed solar projects on Maui have power prices pegged at 8 and 11 cents a kWh.

“The company will evaluate the bids received to determine what is the best option for the island of Lanai and work with the owners of LSR,” said Decker. “Such options could include replacing the current LSR battery energy storage system (BESS), replacing the entire LSR facility or terminating the LSR facility.”

The fact that Lanai Sustainability is a Pulama Lana’i subsidiary and that Pulama Lana’i is offering the land for the renewable power project does not mean a company subsidiary will win the request for proposals, said Decker. The process is open to all energy developers, and Pulama Lana’i will not participate in the evaluations of the proposals.

Pulama Lana’i has agreed to lease the land to the selected developer for nominal lease rent. A draft of the lease has been provided in the request for proposals process for developers to review, she said.

Development of the competitive bidding plans involved participation from the Molokai and Lanai communities, MECO said in a news release. This included community meetings where the company explained the request for proposal process and provided opportunities for residents and businesses to submit written comments and concerns for developers to be aware of when preparing their proposals.

Feedback received from Molokai and Lanai residents has been incorporated in the plans, such as limiting the type of renewable energy technologies being sought in the respective procurement efforts, the utility said.

On Molokai, where the community has shown some opposition to wind power in the past, Decker said feedback collected from 13 community meetings with residents and business indicated that “the community would be open to smaller wind turbines to serve only the island’s needs.”

Earlier plans had called for wind power generated on the island to be shipped to Oahu through an undersea cable. Those plans sparked resistance from the community; the undersea cable idea was nixed by the PUC in 2017.

Castle & Cooke’s proposed 200- to 400-MW wind power project in a pristine 7,000-acre northwest corner of Lanai also ran into opposition on the island. The resistance to wind power appears to have lingered.

“Wind energy is not being proposed based on previous feedback from the community with regards to wind projects and also based on the location of the site and discussions with the landowner Pulama Lana’i,” Decker said. “The company determined that solar plus storage would be the best solution to meet the current energy needs of the island.”

MECO’s guiding principles in seeking renewable energy and grid services include transparency, predictability and streamlining to lower costs for customers, with community engagement essential to success, the utility said.

Proposals are due by Jan. 31 with final awards announced March 31 for Lanai and July 14 for Molokai.

“This effort is a big step in accelerating the transition to using locally sourced clean energy resources to power our islands,” said Sharon Suzuki, president of MECO. “Replacing imported fossil fuels with large-scale renewable energy projects results in cleaner energy at lower prices for all customers.”