Reaching 100% Renewables for the Power Sector in Hawaii. Makena Coffman Professor and Chair Urban and Regional Planning Research Fellow, UHERO

Transcription

1 Reaching 100% Renewables for the Power Sector in Hawaii Makena Coffman Professor and Chair Urban and Regional Planning Research Fellow, UHERO

2 Hawaii s Renewable Portfolio Standard 100% of net sales of electricity through renewable sources by the year 2045 o 70% by 2040 o 40% by 2030 o 30% by 2020 o 15% by 2015

3 What is the best path forward? What have we learned so far? o High prices give way to huge opportunities o Barriers include land use and technological uncertainty o Considerations must be made for equity/distribution Renewable Energy Integration o Time Varying Pricing o Electrification of Transportation

4 Current Electricity Generation Profile Fuel Oil 64% Other oil 0% Diesel 53% Oahu Maui Wind 19% Coal 19% Diesel 1% Other oil 3% Wind 2% MSW 5% Biofuels 1% Utility-Scale Solar 0% Rooftop PV 5% Biomass 8% Hydro 3% Fuel Oil 9% Coal 3% Utility-Scale Solar 0% Rooftop PV 5% Other oil 49% Other oil 15% Kauai Diesel 38% Hawaii Geothermal 21% Diesel 26% Fuel Oil 18% Hydro 6% Utility-Scale Solar 3% Rooftop PV 4% Wind 11% Hydro 3% Rooftop PV 6% Source: EIA, 2015

5 Electricity rates are generally high and volatile 2016 cents/kwh Hawaii U.S. 0 Jan-01 Oct-01 Jul-02 Apr-03 Jan-04 Oct-04 Jul-05 Apr-06 Jan-07 Oct-07 Jul-08 Apr-09 Jan-10 Oct-10 Jul-11 Apr-12 Jan-13 Oct-13 Jul-14 Apr-15 Jan-16 Source: EIA, 2016

6 Early RPS Success 25% 20% 15% 10% 5% 0% Source: RPS Status Reports submitted to the PUC, Utility Solar Biofuels Hydro Distributed Solar PV Geothermal Biomass Wind

7 Solar PV Hawaii is leading the world in residential solar PV installations with about 15% of houses Utilities in Hawaii, the U.S. and world are pushing back on distributed systems Solar PV is heavily subsidized with a federal and state tax credit Photo Source: FreeDigitalPhotos.net by franky242

8 Hawaii and U.S. Electricity Rates & PV Costs /kwh $/watt Hawaii Res Elec Rate U.S. Res Elec Rate PV System Cost Source: Coffman, Bonham & Wee (2015). A Policy Analysis of Hawaii s Solar Tax Credit Incentive. Renewable Energy

9 PV Installed Capacity MW Source: Hawaiian Electric Companies, 2017a; KIUC

10 Potential PV Capacity Demand by Household Income MW <40K 45K 55K 65K 75K 85K 95K 110K >150K Source: Coffman, Bonham & Wee (2015). A Policy Analysis of Hawaii s Solar Tax Credit Incentive. Renewable Energy

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13 What about Wind Energy?

14 Modeling Platform Least-Cost Electricity Model Economy-Wide General Equilibrium Model HELM (by county) Fossil Fuel & Renewable Energy (costs, capacity, constraints) Electricity Prices Least-cost mix of generation Electricity Demand H-CGE (statewide) Change in: Gross State Product Average Resident Welfare Total Output Sector Output Jobs

15 Scenarios 1) RPS (to 2030) & no cable/wind 2) RPS (to 2030) + cable & wind < 400MW Capital Cost Assumptions (Baseline & 50% overrun) Intermittent Limit Assumptions (30% Baseline & 20% Status Quo) Three Fuel Price Pathways (Reference, High and Low) from the U.S. Energy Information Administration Baseline = Reference fuel prices, no cost overruns and 30% intermittent limit

16 No Big Wind Project 70% 60% 50% 40% 30% 20% 10% 0% Oil Coal Other Renewables Biofuels Solar PV Wind Source: Coffman & Bernstein (2015). Linking Hawaii s Islands with Wind Energy. Annals of Regional Science

17 Big Wind 15% 10% 5% 0% -5% -10% -15% Oil Coal Other Renewables Biofuels Solar PV Wind Source: Coffman & Bernstein (2015). Linking Hawaii s Islands with Wind Energy. Annals of Regional Science

18 Net Impacts to Real Gross State Product 0.6% 0.4% 0.2% 0.0% -0.2% Baseline Assumptions Low Fuel Prices $6000/kW High Fuel Prices Source: Coffman & Bernstein (2015). Linking Hawaii s Islands with Wind Energy. Annals of Regional Science

19 Net Impacts to Household Welfare 0.6% 0.4% 0.2% 0.0% -0.2% -0.4% -0.6% -0.8% Baseline Assumptions Low Fuel Prices $6000/kW High Fuel Prices Source: Coffman & Bernstein (2015). Linking Hawaii s Islands with Wind Energy. Annals of Regional Science

20 Exploring Renewable Integration Impact to Generation (TWH) 3 Wind 3 Biofuel Represents value of grid hardening - through batteries? Solar PV Oil Virtually no gains in GHG emissions reductions if wind crowds out solar PV -- 20% Limit 30% Limit Source: Coffman & Bernstein (2015). Linking Hawaii s Islands with Wind Energy. Annals of Regional Science

21 How can we better match the supply of renewable energy with demand? Time Varying Pricing Daytime /kwh On-Peak Nighttime Average Residential Rate 0 Oahu Hawaii Maui Source: Coffman, Bernstein, Wee and Arik (2016). Estimating the Opportunity for Load-Shifting in Hawaii: An Analysis of Proposed Residential Time-Of-Use Rates. UHERO Working Paper Series.

22 An illustration of demand response based on Time Varying Rates 20% % Change in Demand from Baseline 15% 10% 5% 0% -5% -10% -15% -20% Daytime Nighttime On-Peak Overall Appliance Restrictive Literature Source: Coffman, Bernstein, Wee and Arik (2016). Estimating the Opportunity for Load-Shifting in Hawaii: An Analysis of Proposed Residential Time-Of-Use Rates. UHERO Working Paper Series.

23 What about new sources of demand? Annual EV Sales Low (Total) Ref (Total) High (Total) Low Ref High 40, ,000 35, ,000 30, , ,000 25, ,000 20, ,000 15, ,000 10, , ,000 5,000 50, *Includes 6% scrappage rate beginning in Total EVs On-Road* Source: Coffman, Bernstein, and Wee (2016). Factors Affecting EV Adoption: A Literature Review and EV Forecast for Hawaii. Electric Vehicle Transportation Center, Project 19.

24 GHG emissions must be better considered Source: Coffman, Bernstein & Wee (2016). Integrating Electric Vehicles and Residential Solar PV. Transport Policy.

25 GHG impacts vary based on electricity generation Difference in Total Cost ($) 20,000 15,000 10,000 5,000 Toyota 0 Prius -5,000 Ford C-Max Energi Ford Focus Electric Toyota Plug-In Prius Ford Fusion Energi Nissan Leaf Ford Fusion Ford C-Max Hybrid Hybrid Toyota Camry Honda Civic Hybrid Hybrid Chevrolet Volt Ford Fusion Toyota Camry Honda Accord Ford Focus Honda Civic Toyota Corolla Change in CO 2 Emissions (MTCO 2 ) BEV PHEV HEV ICEV Difference in the Total Cost of Ownership and GHGs from the Toyota Prius Source: Coffman, Bernstein & Wee (2016). Integrating Electric Vehicles and Residential Solar PV. Transport Policy.

26 A little renewable energy goes a long way Difference in Total Cost ($) 15,000 Ford C-Max Energi Ford Fusion 10,000 Chevrolet Volt Energi Ford Focus Ford Fusion Electric Toyota Plug-In Hybrid 5,000 Prius Honda Civic Nissan Leaf Hybrid 0 Toyota Prius Ford C-Max Hybrid Toyota Camry Hybrid Ford Fusion Toyota Camry Honda Accord Ford Focus Honda Civic Toyota Corolla -5, Change in CO 2 Emissions (MTCO 2 ) BEV PHEV HEV ICEV Difference in the Total Cost of Ownership and GHGs from the Toyota Prius with weekend residential solar PV charging Source: Coffman, Bernstein & Wee (2016). Integrating Electric Vehicles and Residential Solar PV. Transport Policy.

27 Last thoughts Renewable energy integration is critical o It relates both to reliability and cost o Demand response and new technology demand is one (of many) components of integration We must develop new pricing mechanisms for capital costs, grid services, and electricity provision Considerations for equity and GHG s should be at the forefront of decision-making

28 Mahalo