Is Hawaii making a dash for gas? Nicholas Newman 1 May 2014 www.nicnewmanoxford.com
Hawaii is considering making a dash for gas as part of its efforts to diversify and invest in cleaner, more affordable power supplies. Approval is being sought from the various responsible Federal agencies, including the Federal energy regulatory commission to move ahead with supplying Hawaii's power sector with gas imported via LNG tankers, perhaps from Alaska, or mainland United States or elsewhere. Doing business on an isolated remote tropical island in the Pacific, can be an expensive business for both consumers and power utilities. Hawaii is a collection of volcanic islands, each with their own independent power system. It has to ship in all its fuel supplies from sources literally hundreds of miles away. However, because it is such a small market, it cannot even take advantage of the usual economies of scale, with a population of just over 1.5 million people, scattered across this Archipelago of 137 islands. Currently about 75% the islands power comes from expensive oil, which is increasingly costly for the islands power companies. Hawaii residential power prices are three times the United States average. Hawaii’s energy leaders are planning for the future, it is looking at converting existing oil power plants into gas, building new gas plants, developing an intra-island smart grid to link up not only traditional power stations, but also encourage the development of its extensive geothermal, wind, wave power and wave power potential. However, due to the volcanic nature of the state and the small size of the potential market, Hawaii's energy leaders have ruled out nuclear power for now. However, like with most ambitious plans, the state leaders’ both in the public and private sector have various legal, regulatory and financial barriers to overcome to ensure a more affordable, cleaner, reliable, independent power sector for Hawaii.