Wednesday, January 11, 2017

KIUC and AES Distributed Energy Announce Plan to Construct Innovative Renewable Peaker Plant on Kauaʻi Utilizing a Hybrid Solar and Battery Storage System

Kauaʻi Island Utility Cooperative (KIUC) and AES Distributed Energy, Inc. (AES DE), a subsidiary of The AES Corporation (AES), today announced the execution of a power purchase agreement (PPA) for an innovative plant that will provide solar energy together with the benefits of battery-based energy storage for optimal balancing of generation with peak demand. The project consists of 28 megawatt (MW) solar photovoltaic and a 20 MW five-hour duration energy storage system.

The system will be located on former sugar land between Lāwaʻi and Kōloa on Kauaʻi’s south shore. It will be the largest solar-plus-utility-scale-battery system in the state of Hawaiʻi and one of the biggest battery systems in the world.

“Energy from the project will be priced at 11 cents per kWh and will provide 11 percent of Kauaʻi’s electric generation, increasing KIUC’s renewable sourced generation to well over 50 percent,” said KIUC’s President and Chief Executive Officer, David Bissell. “The project delivers power to the island’s electrical grid at significantly less than the current cost of oil-fired power and should help stabilize and even reduce electric rates to KIUC’s members. It is remarkable that we are able to obtain fixed pricing for dispatchable solar based renewable energy, backed by a significant battery system, at about half the cost of what a basic direct to grid solar project cost a few years ago.” Bissell estimates that the project will reduce KIUC’s fossil fuel usage by more than 3.7 million gallons yearly.
AES DE will be the long-term owner and operator of the project. The company is committed to providing innovative renewable energy solutions to its utility, corporate governmental customers. AES now operates one of the largest fleets of battery-based energy storage in the world.
According to Utility Dive:

The project is the second flexible solar facility for the small co-op. In 2015, KIUC signed a deal with SolarCity to pair a 13 MW solar array with a 52 MWh battery that will deliver power for $0.145/kWh.

The project is expected to provide 11% of Kauai's energy needs, "increasing KIUC's renewable sourced generation to well over 50%," Bissell said. The island has been known to reach renewable energy penetrations of above 90% during peak wind and solar generating hours.

Not only are the costs of both solar-plus-storage facilities below the cost of fossil fuel to power the island, they often beat the cost of the fuel alone. According to co-op documents, KIUC has paid between $0.122/kWh and $0.18/kWh in just fuel and commodity costs since Dec. 2014, with Nov. 2016 costs coming in above $0.15/kWh.

In 2015, the most recent year reported, KIUC's average residential electric rates were $0.323/kWh — lower than past years due to dipping oil prices. Rates for other customer classes were higher.

Press Release dated January 10, 2017
Kauaʻi Island Utility Cooperative (KIUC)
and Gavin Bade @GavinBade "Hawaii co-op signs deal for solar+storage project at 11¢/kWh"

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