Energy & Greenhouse Gas Solutions
Mission: To provide rigorous and timely information to decision-makers and the public regarding energy and greenhouse gas related policy in Hawaii and beyond.
The Energy and Greenhouse Gas Solutions research program (EGGS) was launched in 2007 by the University of Hawai‘i Economic Research Organization (UHERO). It serves as a resource for those interested in issues of energy and greenhouse gas emissions reduction in Hawaii and beyond. EGGS takes a transdisciplinary approach to research by bringing together economists, planners, engineers and system modeling experts to address urgent issues of energy and climate change mitigation.
EGGS Core Goals
- 1. Engage in rigorous analysis that contributes to a global community of scholars.
- 2. Develop and maintain data and models on Hawai‘i’s energy, economy, and resulting greenhouse gas emissions.
- 3. Develop solution-oriented analyses for decision-makers and energy-related stakeholders.
- 4. Design interactive education and outreach programs for a variety of audiences.
- 5. Showcase Hawai‘i-based energy policy solutions that may benefit other jurisdictions, including other States, the U.S., and island areas.
- November 27, 2013 UHERO 101.10: The Confusing World of PV
This UHERO 101 intends to clarify some of the rate and policy aspects of PV in Hawai‘i, and explores the two opposite driving forces of PV adoption.
PV is an attractive investment in Hawai‘i where electricity rates are almost four times the national average. Rising electricity prices and falling system costs have largely driven the installation trend, with installations roughly doubling annually since 2007. Moreover, residential PV is quite cost-effective because it’s installation costs are up to 65% subsidized. In addition, there is ongoing support of PV in the form of Net Energy Metering (NEM). NEM gives households retail rate for their unused PV generation, rather than the wholesale rates paid for other sources of energy. As such, what many do not realize is that distributed PV can actually raise electricity rates rather than lower them. While PV customers benefit from providing their own energy and selling excess electricity back to the grid, non-PV customers are consequently likely to pay relatively more. Also, although PV certainly reduces the use of fossil fuels, it is not necessarily proportionately. Since PV is an intermittent source of energy, the utility also has to run spinning reserves to ensure reliable electricity at any given time.
To add to the confusing world of PV, Hawaiian Electric Industries recently modified its policy— both the primary metric used to determine circuit saturation and the process of connecting to the utility’s power grid. Prior to September 2013, distributed PV generation was limited to 15% of peak load on each circuit that, if exceeded, required the NEM applicant to pay for an interconnection requirements study (IRS). However this limit was not enforced for smaller systems under 10 kW (i.e. residential systems). However, now the metric of daytime minimum load (DML) is used to determine circuit saturation. The policy does not distinguish between small and large systems, and requires that written consent be obtained from the utility prior to installation.1 The details are summarized as follows:
1. Circuits below 75% of DML are not subject to an IRS or circuit upgrades. These projects should receive notice to proceed within 35 business days.
2. Circuits that fall between 75-99% of DML are not subject to an IRS but may require circuit upgrades. Depending on whether a supplemental review is required in addition to the initial technical review, these projects may receive a response anywhere from 35 to 85 business days.
3. Circuits beyond 100% of DML may require an IRS and circuit upgrades. Completing an IRS study may take up to an additional 165 calendar days on top of the initial and supplemental review.
As a result, on one hand, the policy change has slowed down solar installations, due to circuit upgrades. For projects above 75% of DML, customers have to first wait to hear whether a circuit upgrade is necessary and then, if deemed necessary, another several months for conducting the circuit upgrade. In addition to the long waiting period, potential customers face extra costs for circuit upgrades, which are allocated on a prorated basis and divided according to the size of the systems to be installed.
At the same time, the policy change provides further motivation for those customers who have been considering a PV system and whose homes are on circuits below 75% of DML, to join the race to install PV.2
* If you are thinking of installing PV, as an initial circuit availability check, enter your address here: http://www.heco.com/portal/site/heco/lvmsearch
- Sherilyn Wee and Makena Coffman
1In the past, submitting the NEM agreement was often the last paperwork step of the installation process. Applying for the City and County building permit was usually the first step, and now is applied for only after receiving approval to interconnect. Building permit approval takes about 20 business days.
2Previous state legislative discussions on reducing or phasing out the renewable energy investment tax credits have already commenced the “race” to install PV.
- September 20, 2013 Hawaii's Energy Future
Last week's Asia Pacific Clean Energy Conference has focused the spotlight on Hawaii's energy future. Governor Abercrombie opened the conference with a strong commitment to installing an undersea cable between Oahu and Maui. The Blue Planet foundation unveiled their "Energy Report Card" during a keynote address by Henk Rogers. Meanwhile, recent coverage by NPR discussed switching to natural gas as an alternative to Hawaii's oil dependence.
The Hawaii Clean Energy Initiative set the vision for the state to move toward renewable and cleaner sources of energy. There are numerous pathways and decision on the best pathway is fraught with debate.
The Governor's comments juxtaposed to strong resistance to the undersea cable suggests that there needs to be on-going discussion of what energy portfolios will likely emerge in separated versus linked islands scenarios - including environmental and economic impacts.
Moreover, there is also concern over the high cost of energy. As many renewable sources are still relatively costly (or difficult to locate) there is also consideration of switching to natural gas as a "bridge fuel." The future price of liquefied natural gas is uncertain and, while it is cleaner burning than oil, there is concern that its full environmental impact is not necessarily an improvement over the status quo.
In addition, environmental groups such as Blue Planet in their "energy report card" bring up concerns about the lack of guiding policy for the transportation sector. Policies that complement transportation as well as electricity have a place in the discussion as well.
UHERO's ongoing research is looking at ways to cost-effectively achieve GHG reduction and meet the state's clean energy goals.
- July 3, 2013 An Insight on the Cost of Paradise
Whether visitors or residents in Hawai‘i, we are all aware of the high cost of living in paradise. One major contributing factor is the cost of energy. Households in Hawai‘i pay 4 times more than the average US household and nearly 7 times the households in Utah, where the residential energy cost is the cheapest in the nation.* While the US average for April 2013 hovered at 12 cents/kwh, Hawai‘i paid 37 cents/kwh for electricity in the residential sector.**
Breaking down residential energy consumption by source provides more insight into the high cost of living in Hawai‘i. While households in Hawai‘i supply their energy needs mainly by electricity (90%) at $110/mmbtu (equivalent to 37 cents/kwh), the two major sources in the US—natural gas and electricity—each comprise 42% of energy consumption, at roughly $5/mmbtu (equivalent to 1.7 cents/kwh) and $35/mmbtu (equivalent to 12 cents/kwh), respectively (see Figure 1). Hence, Hawai‘i is not only consuming a larger share of electricity, but also at skyrocketing prices. In contrast, the US is consuming a smaller portion from electricity at significantly discounted prices compared to Hawai‘i. This, combined with a large share of cheap natural gas in the US household consumption portfolio explains the large disparity in the cost of energy—particularly in the residential sector—in Hawai‘i and the US. Note however that switching to natural gas in Hawai‘i is not straightforward because of the logistics and infrastructure costs (liquefaction, shipping, regasification) of bringing natural gas to Hawai‘i.
-- Sherilyn Wee
- July 2, 2013 The Challenges of EV Efficiency In Hawaii
Earlier this month, U.S. Department of Energy launched a website that calculates “the cost of fueling a vehicle with electricity compared to a similar vehicle that runs on gasoline”.
The mission of this gadget is to encourage consumers to switch to electric cars by:
• bringing greater transparency to vehicle operating costs
• helping drivers determine how much they might save on fuel by choosing an electric vehicle (EV)
• showing the low and steady price of fueling with electricity.
Announcing the launch of the website, the new Secretary of Energy, Ernest Moniz, stated that EVs could not only save consumers on fuel, but also reduce the dependence of our nation on oil. Those goals may be harder to achieve in Hawai’i than in the rest of the nation.
First, according to the eGallon website, while it costs the average driver in the US less than a third to drive an EV than a conventional gasoline vehicle (saving them more than 68% on fuel cost*), Hawai‘i residents save only 5 cents per gallon on gasoline (less than 1.5%). That explains why the first goal (saving consumers on fuel costs) is harder to achieve in Hawai‘i.
Second, while less than 1% of US electricity is generated from oil, Hawai‘i currently generates 75% of its electricity from oil. This explains why the second goal (reducing dependency on oil) is harder to achieve through EVs in Hawai‘i.
Finally, an often-quoted goal of increased EV penetration is to lower greenhouse gas (GHG) emissions from the transportation sector—as the largest and fastest growing component of state GHG emissions. Achieving that goal is also currently easier in the rest of the nation where more than 40% of electricity comes from cleaner sources than oil and coal (i.e. renewables, nuclear, and natural gas).
Therefore, both of the objectives mentioned by the US Energy Secretary are harder to achieve in Hawai‘i, unless consumers charge their vehicles themselves, for example using their own rooftop PV systems. That way, they could save more on vehicle fuel costs and help the State reduce their reliance on oil.
*It is worth mentioning that both this website and much of the media tend to examine “pump prices” for passenger cars. Although EVs show a lot of promise in much of the US in terms of fuel cost per miles compared with gasoline and other alternative-fueled vehicles, considering the higher capital cost of EVs than their similar class conventional gasoline vehicles (Please refer to section 2.8 of Transitions to Alternative Vehicles and Fuels), they may not look as promising in terms of overall cost per mile.
- April 2, 2012 Going green: Green jobs in Hawaii
According to a March 22, 2012 press release from the Bureau of Labor Statistics (BLS), in 2010 there were 3.1 million “green” jobs in the United States of which 15,583 were located in Hawaii. The number at first might seem to be low compared to other states. However, percentage wise the number of people employed in “green” jobs accounted for 2.7% of overall employment level, which is higher than the corresponding national level (2.4%).
Before describing how these jobs distribute across Hawai'i industry sectors it is important to note that the BLS has split their green job definition into two components/approaches: 1) an output-based approach (jobs associated with producing goods or providing services that benefit the environment or conserve natural resources), and 2) a process-based approach (jobs in which workers' duties involve making their establishment's production processes more environmentally friendly or use fewer natural resources). This release only includes the output-based approach, meaning that jobs which focus on education and training are not included, and the BLS expects to release the process-based jobs later this year.
Not surprisingly, the majority of green jobs, both nationwide and in Hawaii, are in the private sector. The highest number of private green jobs in Hawaii is reported to be in the transportation and warehousing industry: 3,932 jobs or 17% of total employment in that industry. Also a relatively high concentration of green jobs is observed among professional, scientific, and technical services (11.3%), natural resources and mining (5.1%), and construction (4.5%). Based on the ratio of green jobs to total jobs, the least green sectors are leisure and hospitality (0.2%) and trade (1.0%). Data for manufacturing, financial activities, and education/health services were not reported as it did not meet BLS disclosure standards.
One could expect an increase in jobs in the coming years associated with the Hawai'i Clean Energy Initiative, a statewide goal to achieve a 70% reduction in fossil fuel use by the year 2030. The initiative is driving policy development and funding towards renewable energy and energy efficiency. The State recently expanded its Renewable Portfolio Standard law (HRS § 269-91 et seq.) and passed an Energy Efficiency Portfolio Standard (HRS § 269-96 et seq.), requiring 40% of electricity generation to come from renewables and a 4,300 gigawatt hour reduction in electricity use by 2030, respectively. As the state ramps up to meet these obligations, presumably green job growth will occur.
In the past, there have been some challenges with quantifying the concept of green jobs since there was no clear consensus regarding what constitutes a green job. As defined by the BLS, green jobs are found in businesses that produce goods and provide services that benefit the environment or conserve natural resources. The Bureau lists five groups that green jobs fall into: (1) production of energy from renewable sources; (2) energy efficiency; (3) pollution reduction and removal, greenhouse gas reduction, and recycling and reuse; (4) natural resources conservation; and (5) environmental compliance, education and training, and public awareness. The data compiled by the BLS are collected through the Green Goods and Services survey which is based on approximately 120,000 establishments within 333 industries that are identified as potentially producing green goods or providing green services. It is important to recognize that not all jobs within these 333 industries are green: some of the industries may produce a mix of green and non-green goods or no green goods at all!
Hawaii's Department of Labor and Industrial Relations (DLIR) launched its own “Hawaii Green Job Survey” that targeted more than 9,000 businesses statewide. The survey builds on the Hawaii Green Workforce Report. The DLIR's definitions of “green” jobs, core green areas, and the total number of green jobs are somewhat similar to the BLS's definitions. However, despite the similarities, the number of green jobs by industry reported in “2010 Hawaii's Green Workforce: A Baseline Assessment” vary greatly. For example, the top three industries for green jobs are construction (the ratio of green jobs to total jobs equals 11%), administrative/support/waste management and remediation services (7%), and professional, scientific, and technical services (4%). Transportation and warehousing sector, on the other hand, had only 175 jobs compared to 3,932 jobs reported by the BLS. The discrepancies might be due to differences in the methodology; the DLIR did not separate their study into an output-based approach and a process-based approach. There will be an opportunity to better understand the discrepancies when the BLS releases the process-based numbers later this year.
-- Inna Cintina