Hawaii’s ambitious goal of generating all of its own electricity from renewable sources by 2045 appears to be encountering significant hurdles.
These challenges are compounded by issues such as tariffs, a federal administration hostile to renewable initiatives, and a utility company facing financial distress.
State officials, including the governor and utility regulators, are striving to keep the state on track toward its renewable energy objectives.
However, proposed legislative changes could lead to higher electric bills for consumers, which renewable energy advocates are not pleased about.
Currently, two legislative bills are under consideration.
One bill aims to stabilize the credit rating of Hawaiian Electric Company (HECO), while the other seeks to provide financial backing for large-scale wind and solar projects.
Both pieces of legislation will likely impose additional fees on customers, who already contend with some of the nation’s highest electricity rates.
In January, Governor Josh Green issued an executive order aimed at accelerating Hawaii’s transition to 100% renewable energy.
The Hawaii Public Utilities Commission has also announced various initiatives to move this agenda forward.
Despite these efforts, some renewable energy advocates express concern that certain actions may be detrimental.
A central point of contention revolves around the Hawaii State Energy Office’s recent proposals advocating for the use of liquefied natural gas (LNG) as a less expensive, lower-carbon alternative to high-sulfur oil.
Governor David Ige had previously rejected this idea when he signed the renewables mandate into law in 2015.
Jeff Mikulina, who played a key role in shaping the state’s energy strategy, observed that while the pursuit of energy independence has encountered deterrents, the journey remains manageable.
“We knew that the path was never going to be a straight line,” he acknowledged, referencing the unexpected challenges that have emerged.
Achieving Hawaii’s renewable energy goals relies heavily on the construction of large-scale solar and wind farms through collaborations with independent power producers.
These firms invest in building energy infrastructure and enter into wholesale power contracts with HECO, meaning that regulatory approval is critical to ensure equitable pricing for consumers.
Rooftop solar installations are also vital, but the state particularly requires large-scale projects to meet energy demands, especially on the populous island of Oʻahu.
Another essential aspect of the state’s energy strategy includes developing extensive energy storage systems that can deliver power during periods of low sun or wind.
In light of current challenges confronting HECO, the utility is soliciting proposals from developers for additional large-scale energy projects to replace fossil fuel generation.
However, external factors threaten to complicate Hawaii’s energy journey.
Notably, President Donald Trump recently signed an executive order aimed at dismantling “burdensome” climate change policies that he claims hinder American energy independence and security.
This order tasks the U.S. Attorney General with identifying state energy policies designed to combat climate change, a move that could jeopardize Hawaii’s renewable energy mandate.
While Hawaii’s energy policy emphasizes economic independence over climate issues, advocates for renewable energy have long championed the environmental benefits associated with such policies.
Ultimately, this mandate seems to be at odds with Trump’s agenda to bolster domestic energy sources such as oil, natural gas, coal, and nuclear energy.
The extent to which the federal administration could interfere with Hawaii’s legislation remains uncertain.
Hawaii Attorney General Anne Lopez’s office is currently reviewing this federal directive to determine any necessary responses.
Adding to the state’s challenges are Trump’s tariffs on imported items, including steep tariffs—up to 145%—on goods from China, which could increase project costs significantly.
Despite most items for HECO projects being sourced domestically, many components are manufactured overseas, meaning these tariffs can drastically inflate prices.
An example provided by Jim Kelly, a spokesperson for HECO, illustrates how the cost of a single valve sourced from a U.S. supplier but produced in China surged from $22,600 to $48,600.
Kelly emphasized that ongoing federal policy volatility exacerbates Hawaii’s already complicated energy landscape.
Isaac Moriwake, managing attorney for EarthJustice’s Mid-Pacific Office in Honolulu, believes that state and local authorities must take charge in navigating these challenges.
He stated that while the federal landscape poses significant obstacles, addressing local energy policies remains well within Hawaii’s jurisdiction.
To mitigate existing financial hurdles, Hawaii lawmakers are proposing initiatives to support HECO in its roles essential to pursuing the state’s energy policies.
The aftermath of the 2023 Lahaina wildfire, which HECO was found to have caused, critically crippled the utility’s operations, forcing it to raise nearly $2 billion to settle over 1,000 lawsuits.
Credit rating agencies subsequently downgraded HECO’s bond rating to junk status after the fires, leading to higher borrowing costs for the company and hampering its ability to invest in renewable initiatives.
This downturn has resulted in stagnation for several renewable projects.
In light of HECO’s diminished creditworthiness, independent power producers are facing increased interest rates in obtaining financing to build wind and solar facilities.
These ballooning borrowing costs inevitably get reflected in wholesale contracts with HECO, ultimately affecting consumers.
One significant developer focused on three major projects on Oʻahu and the Big Island even withdrew from its agreements last year due to the precarious financial climate.
To alleviate this situation, lawmakers are exploring the creation of a fund intended to backstop the power purchase agreements (PPAs) between independent producers and HECO in the event of a default by the utility.
Should this mechanism come to fruition, customers would likely bear the financial burden of contributing to the fund.
In their testimony supporting the proposal, AES Hawaii, one of the largest renewable energy producers in the state, made it clear that establishing a financial safety net is critical for maintaining project viability in light of HECO’s non-investment-grade status.
The proposed legislation would aim to guarantee that energy producers could secure the most favorable financing terms for upcoming renewable projects, with provisions included to refund customers any contributions after HECO’s credit rating is restored.
This legislation is set to undergo another conference committee hearing scheduled for Friday.
Furthermore, another bill is currently being discussed that would permit regulators to impose fees on residents to aid HECO with wildfire mitigation efforts and enhance its credit rating.
Progress on this bill is gradual, with lawmakers indicating they would allow the public to review the final draft before granting approval, as noted by Senate conference committee chair Sen. Troy Hashimoto.
Rep. Nicole Lowen, Chair of the House Energy Committee and one of the lead negotiators on both bills, asserted that legislative details are still being finalized.
“Everything is a work in progress,” she remarked.
On the executive side, Governor Green’s administration is persistently advancing toward the solar and renewables agenda.
Apart from endorsing large solar and wind initiatives, the executive order aims to accelerate the installation of rooftop solar systems, intending to facilitate at least 50,000 new installations for low- and moderate-income households by 2030.
Additionally, the eight-page executive order includes directives to offer direct bill savings to lower-income households residing near significant solar and wind installations.
The Public Utilities Commission (PUC) is also engaged in the process, putting forth a strategy to enact Governor Green’s orders, including streamlining the review and approval timelines for power purchase agreements.
Moreover, a separate PUC document has introduced a roadmap designed to guide and oversee energy development over the subsequent decade.
This plan advocates for increased rooftop solar utilization and aims to hasten the development timeline for major projects, arguing that the current five-year construction period is unsustainable.
The PUC asserts: “Given the compelling public need, critical energy infrastructure development should not take longer than three years.”
Requests for interviews with the PUC and Governor Green were not accommodated for this article.
Accompanying Green’s executive order, the Hawaii State Energy Office released a study advocating for reductions in oil dependency during the transition to renewables.
The study identified LNG as a preferable alternative for reducing carbon emissions and lowering costs.
In his address at the Hawaii Energy Conference in May, Green reignited the discussion surrounding LNG.
Mark Glick, acting as Hawaii’s chief energy officer, articulated that LNG could potentially cut carbon emissions by up to 45% in comparison to the high-sulfur oil currently in use.
Furthermore, Glick argued that adopting LNG could lead to cost reductions of 15% or more relative to oil.
Glick also addressed concerns regarding the financial viability of investing an estimated $1.4 billion to create a new infrastructure for carbon-based fuel, particularly given that state mandates envision eliminating carbon fuels within two decades.
He responded that the proposed infrastructure could be established in just six years, thereby providing ample time for a producer to recover its investment within a 15-year timeframe.
The infrastructure would include re-gas units strategically positioned offshore to coincide with existing oil offloading sites, alongside an upgraded pipeline distribution system that connects to stored onshore facilities.
Powerplants slated for upgrades could potentially be retrofitted to utilize natural gas or alternative fuels post-2045, including biodiesel if necessary.
While Glick contends that transitioning to a lower-carbon fuel is a sensible step, skeptics remain unconvinced.
Many green energy advocates argue that the legitimate solution to energy challenges lies solely in renewable resources.
During a recent earnings call, John Ketchum, CEO of NextEra Energy, noted that renewables and battery storage represent the most cost-efficient power generation methods available.
Ketchum remarked on the feasibility of constructing such facilities within 12 to 18 months.
He cautioned against transitioning to gas-fired plants, highlighting that the latter will come online at a higher overall cost compared to renewable options.
Mikulina echoed this sentiment, asserting that with only two decades remaining to fully transition away from fossil fuels, Hawaii should amplify its commitment to renewable energy solutions.
He firmly stated, “Keeping LNG on the table is just sucking all of the oxygen out of the room.”
Henry Curtis, executive director of the environmental organization Life of the Land, concurred with this viewpoint: “The idea that we’re going to find a solution in fossil fuel is crazy.”
In summary, while Hawaii’s path towards achieving its 100% renewable energy goal is outlined with a series of legislative and executive measures intended to overcome existing hurdles, significant economic, logistical, and political challenges continue to threaten the feasibility of this critical endeavor.
image source from：https://www.civilbeat.org/2025/04/hawai%CA%BBis-pledge-to-free-itself-from-fossil-fuel-hits-new-roadblocks/
