The public utility on the island of Kaua’i in Hawaii has signed a power contract with SolarCity for a project which is being presented as the first utility-scale solar plant to provide electricity on demand.
Kaua’i Island Utility Cooperative (KIUC) signed the 20-year power purchase agreement with SolarCity for the output of an integrated solar PV and battery system. The systems’ 52 megawatt-hour (MWh) battery will be able to send up to 13 MW of power to the grid to meet evening demand from 5 PM to 10 PM.
KIUC calls the project a technology breakthrough, and it challenges the notion that the level of deployment of solar is limited as it only generates electricity during the day.
The price is also remarkable. KIUC says that the project generates power at a lower rate than conventional generation. Utility Dive puts this price at US$0.145/kWh, and notes that this is higher than the island’s other two utility-scale PV systems.
Hawaii has the highest retail electricity prices in the United States, due to its dependence upon imported fossil fuels. KIUC stressed the advantage of this project for reducing fuel use and greenhouse gas emissions in a press statement.
Kaua’i has two other utility-scale solar PV projects, which meet roughly half of daytime power demand. SolarCity built the first of these, a 12 MW PV project that went into operation in September 2014 and supplies roughly 5% of Kaua’i’s annual electricity.
In June, KIUC President and CEO David Bissel said that he expects these solar projects and the island’s other renewable energy generation to meet 38% of demand over the course of 2015.
As is the case with other regions like California which have high penetrations of solar, Kauai’s peak demand has shifted to after sundown. This presented a technical challenge to the deployment of more solar. The island has the additional difficulty of a small and isolated geography and grid, meaning that solar output is more subject to variations based on cloud cover and cannot be exported.
SolarCity plans to build the project on 50 acres of land adjacent to a KIUC power station, just north of the island county’s seat. The company plans to begin construction in April 2016 and complete the project by the end of the year to access the 30% federal investment tax credit.