Hawaiian Electric Company Integrated Resource Plan - Welcome to Fantasy Island

Posted on September 03, 2013
Posted By: Davis Swan

On June 28, 2013 the Hawaiian Electric Company (HECO) released its Integrated Resource Plan (IRP) which outlines how it will meet electricity demand over the next five years and how it will achieve the Renewable Portfolio Standards (RPS) which require that 25% of generation be from renewables by 2020 and 40% by 2030. 

This 775 page document consists of hundreds of graphs and tables from different runs of a computer modeling tool called the "Strategist".  There are also some very superficial statements about the potential for Demand Response, conservation, integration of more renewable generation and inter-island cable connections. 

When I see computer model scenarios with names like "Blazing a Bold Frontier", "Stuck in the Middle", "No Burning Desire", and "Moved By Passion" I immediately think back to a consulting engagement in the oil patch that I was part of many years ago.  After our initial meeting with the client, which involved about 15 people for the whole day, our sales guy was ecstatic because we had accomplished two things; we agreed upon a name for the engagement (which he had proposed to the group in the first 5 minutes of the meeting) and we agreed upon a two sentence mission statement.  I thought it was a ludicrous waste of everyone's time but I was wrong. That incredibly "productive" meeting sealed the deal for an equally "productive" sale of 30,000 hours of consulting to the client with no deliverables, no schedule, and no guarantee as to the quality or qualifications of the consultants they would get.  For some reason I think there was a very similar meeting at the HECO offices a year or two ago. 

What I find conspicuously absent from the HECO IRP is something called common sense. 

It is implied in the report that the integration of significant additional amounts of Photo-Voltaic (PV) solar and wind into the grids on the various Hawaiian Islands will allow HECO to meet the RPS requirements while keeping electricity rate increases under control.  An independent analyst working for the Public Utility Commission did not agree. In what I would characterize as a very thorough and objective report the many issues with the HECO IRP are identified in detail.  The following quote summarizes the fundamental problem; 

"The scope of the HECO Companies' analyses seems to be more narrowly focused within the bounds of a work plan and approach using a specific scenario planning approach and a specific resource analysis model (Strategist) to analyze resource planning issues." 

In other words, the IRP relies principally upon a computer modeling tool to generate answers rather than applying human logic to analyze reasonable alternatives.  In my experience with complex models used in the oil and gas industry this is not a winning strategy. 

The challenge facing Hawaii can be visualized through two charts which focus on renewable generation in 2012; 

One notable aspect of these charts is the large discrepancy between the nameplate capacity and actual generation.  The Geothermal facility on the Big Island represents only 6% of nameplate capacity and yet it generated 21% of the total renewable electricity during the year.  The reason?  Geothermal is reliable.  In fact the Puna facility had a utilization rate of 80%.  The same situation applies to the large waste-to-energy plant on Oahu which incinerates most of the solid waste generated on Hawaii's most populous Island and outputs up to 90 MW of electricity. 

Wind energy generation is roughly equal to its proportion of nameplate capacity.  That sounds promising until you consider that about 50% of that production takes place at night in periods of low demand.  There are also frequent periods of relative calm so that relying upon wind is simply not feasible. 

The area of most concern is with PV solar which happens to be the fastest growing source of renewable generation in the state.  Up until now the many financial incentives implemented to encourage the installation of roof-top solar panels have been very effective.  But the IRP acknowledges that  when the amount of PV Solar at mid-day reaches a critical point there are problems; 

"When the aggregate PV capacity is greater than 100% of minimum load, this could result in power flow from the generating facilities back toward the substation, negatively impacting equipment loading, voltage, system operational impacts, and protection of the Company's system." 

The widespread adoption of roof-top solar is also resulting in significant economic inequities amongst HECO customers.  This is something I discussed in a recent blog posting.  The IRP describes the situation as follows; 

"As the amount of installed rooftop PV grows within Hawaii, it is creating significant economic cost transfers between groups of Hawaii's citizens. These include the fact that Hawaii taxpayers are providing tax credit subsidies for new PV that do not accrue to non-PV owners; the feeder upgrade and operational requirements that increasing levels of PV impose upon utility customers; and as more PV owners (often more affluent citizens) generate their own energy, they leave fewer customers remaining on the utility system to pay for the fixed capital and operational non-energy costs of system operations." 

So from both physical infrastructure and economic fairness perspectives a continuation of the current pace of PV installations does not appear to be sustainable in my opinion. 

Geothermal on the Big Island can and should increase to become the main source of electricity there.  That is great for the Big Island but there is no comparable Geothermal resource potential on the other Islands. 

As noted, the charts above also highlight the significant contribution of the waste-to-energy plant on Oahu.  However, the 2012 upgrade to this facility resulted in the vast majority of Oahu's solid waste being treated.  There simply is no more waste to use in this type of facility. 

Hydro, although it has a relatively high utilization rate, has been mostly developed so that there is very limited potential for further increases in generation from that source. 

The big "Other" category in the charts consists primarily of a single large bio-diesel plant (the Campbell Industrial Park Generation Station) which is run rarely as a peaking plant.  The cost of the biodiesel fuel is too high to justify continuous operation and as a result the plant had a utilization rate of only 2% in 2012. 

The only other renewable mentioned prominently in the IRP is wind and that is problematic for many reasons.  Not only is it an unreliable source but it is very highly variable with wind  changing intensity and direction frequently and dramatically.  The small, isolated grids in Hawaii would be very difficult to stabilize if large amounts of wind generation were incorporated.  The IRP also states that the best wind resources are on the smaller Islands such as Lanai while the major load center is Honolulu.  The cost to lay submarine transmission cables between the Islands is very substantial. 

All things considered the HECO IRP does not present anything close to a realistic plan to move Hawaii away from burning residual fuel oil to generate electricity.  The "Strategist" computer model is obviously good at generating many graphs and tables of data.  Whether any of the output really makes sense is another question. 

I have spent a considerable amount of time looking at different scenarios for the Hawaiian Islands and proposed a different approach in a blog posting with the title "Hawaii Renewables facing Cross-currents and Headwinds". I believe that Concentrated Solar Power plants with Thermal Energy Storage represent the best option for the state.

I have traveled to Hawaii many times and love every part of the state that I have had the pleasure to visit. I would like to see Hawaiian dependence upon hydro-carbons reduced or eliminated as quickly as possible.

There are realistic options available to HECO. They just need to understand that they are on an island in the Pacific Ocean - not in that other place.

Authored By:
Davis has been involved with energy policy development and the exploration of innovation in energy use throughout his career. For more than 20 years he worked in the oil & gas industry where he had broad exposure to the technologies used in the development of natural gas, conventional oil, heavy oil, and tar sands resources. He has also acted as the energy policy advisor for the Official Opposition in the

Other Posts by: Davis Swan

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September, 03 2013

Ferdinand E. Banks says

Davis Swan, whoever got this _______ plan together was simply giving people what they want. If they had told the truth, there would not have been a payoff. I can say the same thing about our president and his 100 years of natural gas at unchanged output. The ignoranuses in the EIA who gave him that knew that that was what he wanted, and he knew that by passing it on he was making the day of...of somebody or somebodies.

I'm proof-reading my new energy economics textbook. I wrote this book because writing is easy-peasy for me, not because I think that potential readers will be breaking down the doors of book stores to buy it, although this is what they should do. The subject is so incredibly straightforward that even economics teachers who think that they know something - but don't - can feel good about themselves with a minimum of effort (which is all the effort they are willing to put into something useful).. .

September, 03 2013

Michael Keller says

Perhaps the Hawaiians should talk with the lads at SEMPRA in California about bringing in LNG from the underutilized LNG import facilities in Baja California; SEMPRA is currently looking at converting the facility for export. Could actually get a few smaller LNG tankers, anchor them near ports in Hawaii and simply periodically offload from big LNG tankers running between the Baja and other major users in the Far East. Plop down a couple of combustion turbines and "presto" cheaper power than they have now in Hawaii, and by a big margin. Would actually be a good fit with intermittent renewable energy, as the combustion turbines have no trouble maneuvering.

Beats the hell over throwing up dozens of giant, ugly wind turbines and laying cables in the deep channels between the islands or covering the islands with enough solar cells to actually be useful.

Alas, probably wasn't an option in their computer program.

Also, the idea of avoiding hydro-carbons is not sound from an economics standpoint, nor is it needed from an environmental standpoint. What is needed is the ability to realistically evaluate options and not needlessly paint yourself into a corner.

September, 05 2013

Len Gould says

Seems a bit optimistic to hope that 33% of nameplate capacity as wind generation is going to delived 31% of total energy used. Are Hawaii's winds so much more closely synch'd with demand than any other place?

September, 06 2013

Richard Vesel says

Next bug in the program is: Waste to energy burns virtually all of the solid waste on the island to generate 90MW. That's about 1/2% of peak demand, and 1% of nighttime demand on Oahu. Soooooo - what are they going to burn to get to 24% of average demand????

Somewhere, someone is math challenged, or they're planning to burn everything on the island to the ground.

Mike Keller and I are on the same page here. LNG and CCGT units will DRASTICALLY cut utility rates AND CO2 footprint by well over 60% over the current oil-fired generation mix. If you want to mix in some solar and wind, that's fine, but covering the landscape with either seems like a bad idea, both practically and aesthetically. Biodigesters and other green methods for making methane can be phased in over decades to eventually feed the CCGT's and create a carbon neutral power generation scheme.

There's a lot missing from their "vision", that's for sure!


September, 06 2013

Richard Vesel says

Now - there IS hope for rationality buried on pages 29 and 30 of the Executive Summary, so please read there! For example, on page 29:

"2.B. Within a few years, it is expected that the longer-term firm generation needs and the viability of LNG for Hawaii will be better known. In approximately 2015–2016, the Companies will implement an RFP process for new generation based on the forecast adequacy of supply for the operating system, the value of replacing aging generation units with more-efficient new ones, and the availability of environmentallycompliant fuels. The attributes, size, fuel(s), and total capacity (that is, MW) for the generating resources will be defined at that time, and will be subject to approval by the Commission. Adding new firm capacity is expected to allow deactivation/decommissioning of existing generating units."

and on page 30:

"3. Environmental Compliance and Conversion to LNG or ULSD 3.A. To assure compliance with EPA’s air regulations, the lowest-cost solution is to convert existing generation from burning sulfur-bearing fuels to LNG. The Companies would support the development of LNG infrastructure (import and regasification terminal) by another entity. The Companies would build new gas pipelines to deliver LNG to its power plants and would make modifications to their fuel burning equipment to accommodate LNG."


September, 09 2013

Ferdinand E. Banks says

Did I mention my new book...well, yes, it's a habit now. But more important is the book by David Goodstein, professor of thermodynamics at 'Cal Tech. There is no math in it or high faluting physics. It is called OUT OF GAS: THE END OF THE AGE OF OIL. Do I Think tht the age of oil is going to end by Christmas eve, no I dont, and neither does Professor Goodstein. The point is to get into this energy economics thing in a systematic way.

September, 10 2013

Don Hirschberg says

"These fossil fuels (imported oil and coal) provide 91.5 percent of Hawaii's electricity-generation needs, as of 2009. Municipal solid waste burned in incinerators ... provide 2 percent of electricity in 2009.' ' Read more: http://www.ehow.com/about_6652092_do-hawaiian-islands-electricity_.html#ixzz2eWHGPD3T

September, 10 2013

Mark Lively says

Reliance on "renewables" generally means on "non-utility" generation. When there is "non-utility" generation, there must be a way for the utility to pay the "non-utility" generation for the electricity that is produced. Given a concern about the inability of some generators to provided electricity when it is really, really, really needed, how about setting the price for the "non-utility" generation in a way that reflects the concurrent need for electricity. When the generation is really, really, really needed, then the price is really, really, really high. When the generation is really, really needed, then the price is really, really high. When the generation is only really needed, the price is just really high. When the generation is not needed, the price is not high, perhaps even low, sometimes even negative.

Four months ago I talked about this concept in regard to microgrids, which to an extent refers to the grids on each of the islands in Hawaii. So my "Creating a MicroGrid Market," EEI Rate and Regulatory Analysts Meeting, Orlando, Florida, 2013 May 22 should also be applicable to Hawaii. And for those who did not attend this EEI meeting, the similar concepts are presented here on Energy Central in "Creating a MicroGrid Market: Using a Frequency Driven Pricing Curve To Dispatch Load and Embedded Distributed Generation And To Charge and Pay for Participation," Energy Pulse, 2013 July 3 http://www.energycentral.com/generationstorage/distributedandcogeneration/articles/2673

I note that Len Gould who has already commented on this article also commented on my article.

September, 10 2013

Fred Linn says

--------".....................demand over the next five years and how it will achieve the Renewable Portfolio Standards (RPS) which require that 25% of generation be from renewables by 2020 and 40% by 2030"----------------------

Well, maybe they should ask Iowa and South Dakota instead of an oil man. In 2012, 25% of the electricity consumed in Iowa, and South Dakota were generated by wind power. That is actual KWh consumed, not name plate capacity.

-----------------" The United States now has 60,000 megawatts of wind online, enough to meet the electricity needs of more than 14 million homes. A record 13,000 megawatts of wind generating capacity was added to the country’s energy portfolio in 2012, more than any other electricity-generating technology. Wind developers installed close to two thirds of the new wind capacity in the final quarter of the year. Nearly 60 wind projects, totaling over 5,000 megawatts, came online in December alone as developers scrambled to complete construction by the end of the year to qualify for the federal wind production tax credit (PTC) that was scheduled to expire."--------------------


It seems to me that if Iowa and South Dakota can do it, Hawaii ought to be able to.

September, 10 2013

Ferdinand E. Banks says

It is early here in Sweden, and my brain is just warming up, but I need Mark Lively to explain to me how and why a utility must pay a non-utility for something/anything. If I make drinking whiskey in my kitchen, I dont expect the people who make Black Label to send me a check every month, Etc, etc.

September, 11 2013

Mark Lively says


Iowa and South Dakota are able to live with high percentages of wind generation because they are connected to a massive grid. The percentages discussed should be relative to the total grid, not just to some small portion of the grid. By your analysis, West Texas, an area much larger than either Iowa or South Dakota, probably has about 90% of its energy coming from wind, which is possible because West Texas is connected to Dallas, and Houston, and . . .


If the utility is taking electricity from an non-utility owned generator, there should be a price for that electricity. Sometimes that price should be very high. Sometimes that price should be very low, perhaps even negative, as happens frequently in West Texas where there is a surplus of wind. Consider this, a bank is in the business of making loans and collecting interest. By your rational, why should a bank pay me for the money that I leave in its vaults?

September, 11 2013

Fred Linn says

Mark Lively---------" By your analysis, West Texas, an area much larger than either Iowa or South Dakota, probably has about 90% of its energy coming from wind, which is possible because West Texas is connected to Dallas, and Houston, and . . "------------------

Overall, Texas produces about 12% of their power by wind. Statistics are only available by state.

As you point out---West Texas is not well connected to the overall grid yet. So, there are probably areas of West Texas with much higher percentages, probably Amarillo and Lubbuck for instance.

The Texas Gateway transmission line is under construction----it is a 500KV transmission line that will go from Amarillo to Dallas/ Fort Worth and Houston. It is not completed yet.

When the Gateway is completed Texas will make an overnight jump in the percentage of wind power they use. Probably to 30% or more(I think). Power capacity does not actually become MWh(work) until it is used. To do that, the turbines must be connected to something that uses electricity to do work.

If the utility is losing money because they are not generating as much power, it is because they do not have a correct rate structure. You pay a minimum monthly amount to be connected----and an amount for the energy you use. If the energy you use, does not pay for being connected to the grid---it is because of the way the utility charges you, not because you generated some or all the power you use from renewable sources. If the utility raises the minimum month charge they make to be connected to the web---------if they raise it too much, it will make battery storage more attractive----and if enough the price of being connected to the grid surpasses the cost of battery storage, the customers will leave the grid and rely on their own system.

I suspect the electric utilities are aware of current and available options coming down the road---and are aware of their relative costs both now and projected into the foreseeable future. I think this is why heavily fossil fuel dependent utilities are very much opposed to renewable energy---------they are dinosaurs. If Texas were an independent country(again)----it would be #6 in the world in terms of installed wind capacity. Texans have always liked doing things big.

September, 11 2013

Ferdinand E. Banks says

If a utility is taking electricity from a non-utility, the non-utility should receive Money. No question about that.. But once we open that can of beans I find myself thinking of a conversation I had with a Young gentleman at the institute of economics who gave me a load of foolishness about non-utilities - e,g households - generating electricity, and the guy was so smooth with this soap opera that I thought about giving him a tip and saying thank you, .

In the coming 29 or 30 years wind based electricity is going nowhere, although there might be something to write home about from Tierra del Fuego and West Texas. The Germans bought into the windpower lie, and turned off or are thinking about turning off their nuclear facilities,, but in any case they now they have the next highest Electric price in Europé. The highest is Denmark, the promised land of wind based electricity, and if the Danes could not hook into the grids of Sweden and Norway, family fathers in Copenhagen might have to start Selling dope on street corners in competition with their guests from the less-developed World. Incidentally, if the directors of wind-intensive industries in Germany thought that MIZZ Merkel was serious about betting on wind and solar, they would break all records moving their assets someplace where the government energy economists could add and subtract..

Fred Linn, about the future of wind based electricity in the US: THERE AINT ANY! If there was the ignorant president would be talking about it the same way that he is talking about 100 years of natural gas. Do yourself a favor: forget CNN and the New York Newspapers and invest in David Goodstein's book. It is never to late to read a few chapters in the work of a World class thermodynamist, as compared to the half-baked scriblers who are trying to get aboard the energy gravy train.. .

September, 18 2013

Malcolm Rawlingson says

Well said Professor Banks. As Davis Swann aptly puts it

"What I find conspicuously absent from the HECO IRP is something called common sense."

This statement can be reiterated for Mr. Linn. who states that 25% of the electricity consumed in Iowa was generated by wind power. Try doing that in New York City. How much is produced on a calm day in Iowa (a clue it is a round symbol often referred to as zero, nil, nought, nothing). 1000MW installed wind generation x no wind = Zero MW. Hard to run your farm on that.

The absence of common sense in promoting the use of uncontrollable and intermittent sources of electricity to power a modern economy that requires controllable, continuous power can be summed up by the phrase.


You do not need to be an expert in thermodynamics to figure that out.

If contributors on this site do not understand these simple truths all the fancy graphs and computer generated algorithms in the world will not cause the wind to blow on a calm day or the sun to shine when it is dark.

If someone comes up with a reliable means of storing electricity THEN I will change my mind. In the meantime I'll stick to nuclear power thanks.


October, 28 2013

Richard Vesel says

Mr Rawlings,

Have you ever seen a regional generation demand curve? Do you know what one is???? Do you know what an unplanned forced outage is? What is an EAF for a coal/oil/gas fired generation unit?

If you answer no to any of these questions, I suggest you educate yourself a bit further, and cease the kindergarten-level rhetoric about the vagaries of wind and sun. Mr. Linn said nothing about New York City's power needs or generation methods. He was referring to open spaces where the wind DOES blow quite reliable, in the temporal and spatial average.

I can assure you that the sun does shine, and the wind does blow, quite reliably in Hawaii. Technology exists to allow these to be economically included on the islands as part of a well-designed generation mix. They are not, by any stretch, the total solution - and no one here would advocate that.

Your arguments need technical investigation, and refinement in terms of REALITY. Otherwise, it is just so much blather, and worth zilch as a technical contribution to the discussion.


November, 05 2013

Jack Ellis says

There are folks who believe we can eventually use 100% renewable (aka "clean") energy and not have to rely on nuclear power or fossil fuels. Their thesis is based on two premises: first, that storage becomes cheap, and second, that the output from a large fleet of geographically dispersed resources can be shuttled around the country. I'm not going to say never (just like climate scientists never claim they're 100% certain), but there are problems with both of these assumptions. Storage is expensive and I see no reason to believe that it can be made significantly cheaper (aside from the fact that storage is not exactly environmentally benign). Taking advantage of geographic dispersion requires building a lot of expensive, vulnerable high voltage transmission that NO ONE wants in their back yard. Our experience to date with EHV networks is that they work most of the time but when they don't work, the impacts are very widespread and severe (witness the Northeast Blackout and widespread outage in Southern California and Arizona in the fall of 2011).

Of course if batteries become cheap enough, those who can afford to will install rooftop PV and batteries, and then cut the cord to their local distributor. Perhaps not everywhere, but it might be feasible even in sunny and snowy Lake Tahoe.

Jack Ellis, Tahoe City, CA

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