US utility Hawaiian Electric is required by environmental legislation to generate 25% of its electricity from renewable sources by 2020 and 40% by 2030. However, its existing generating fleet is predominantly petroleum-fired, operationally inflexible, and heavily depreciated.
The company asked PA to develop a comprehensive strategy that would allow it to meet renewable energy targets, carbon emissions reduction targets and increase shareholder value.
Together with Hawaiian Electric, we developed a range of plausible scenarios and assessed the impact of each on elements such as cost to utility customers, the company’s generation rate base, emissions and compliance with environmental regulations.
PA’s final report laid out three scenarios that met renewable energy targets while retaining flexibility for Hawaiian Electric. Each provided excellent opportunities for investment in the company, increased the rate base for the generation arm of the business and fostered significant levels of renewable energy from independent power producers.
All three scenarios could significantly reduce carbon emissions. The results of the joint project indicated that all of this could be achieved at a nominal increase in cost to utility customers.