AES’ New Kauai Solar-Storage ‘Peaker’ Shows How Fast Battery Costs Are Falling
The Kauai Island Utility Cooperative continues its innovation streak with the solar-plus-storage plant for peak capacity.
AES Distributed Energy will build a solar-plus-storage “peaker plant” on the Hawaiian island of Kauai that stands out both in capacity and power price.
The project, if approved by state and local regulators, will combine 28 megawatts of solar photovoltaic capacity with 20 megawatts of five-hour duration batteries. AES will own and operate the system, and has executed a power purchase agreement to sell power to the Kauai Island Utility Cooperative (KIUC) at 11 cents per kilowatt-hour. The project is expected to be operational by late 2018.
Once completed, the facility will generate 11 percent of the island’s electricity and push the share of renewable generation above 50 percent, KIUC President and CEO David Bissell said in a statement.
“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,” he said. “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.”
The combination of solar-plus-storage and Kauai might sound familiar — the cooperative utility announced a groundbreaking deal with SolarCity in September 2015 for a solar plant backed by batteries. That project, still under construction, paired 17 megawatts of solar PV with Tesla Powerpack batteries with 13 megawatts of power and 52 megawatt-hours of energy. The price tag on that power: 13.9 cents per kilowatt-hour.
In a little over a year, then, solar-plus-storage economics have improved such that AES can field more power capacity, an additional hour of duration and a lower volumetric price than SolarCity’s project.
That’s good news for the growing market segment of “firmed solar,” which promises greater control and dispatchability of the intermittent resource by storing it in batteries. The ability to control the timing of the plant’s output enables it to meet peak demand, a role typically performed by expensive natural-gas peaking plants. Unlike other states, Hawaii produces most of its electricity from petroleum-fired plants, as well as some coal plants.
Fossil fuels have to be shipped into Hawaii, resulting in the nation’s highest electricity prices. Leveraging the solar resource for the evening demand peak on Kauai allows the utility to cut back on fossil fuel costs; the AES batteries can keep pumping out power for five hours after the sun goes down.