Tesla keeps the lights on
Tesla has built a 13MW solar farm combined with a 52MWh battery installation on the Hawaiian island of Kauai, which is expected to reduce the island's consumption of diesel and petroleum by 1.6m gallons per year. The Kauai Island Utility Co-operative will buy the plant's solar-generated power for 13.9 cents per kWh from Tesla for 20 years. Elon Musk has also promised to deliver on a bet that, within 100 days, his company can install sufficient battery capacity (between 100 and 300MWh) in South Australia's power grid to prevent blackouts. If not, the project will be done for free. 

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On Wednesday, Tesla and the electricity cooperative that serves the Hawaiian island of Kauai opened a 13 MW solar farm combined with a 52 MWh battery installation to help the island reduce its fossil fuel consumption by about 1.6 million gallons of diesel and petroleum per year.

The batteries are intended to store Kauai’s abundant solar energy resources during the day and dispatch them when necessary, often at night. Solar City, the solar panel company that Tesla bought last year, built a similar installation on the island of Ta’u in American Samoa. That system serves 600 people. In California, several battery-making companies, including Tesla and AES Energy Storage , have built battery storage for that state’s grid, too. (Although in California’s case, while the batteries allow for more renewables to be added to the grid, the batteries aren’t necessarily tied to renewable energy, so all kinds of electricity is stored equally for dispatch during periods of electricity shortage).

Hawaii specifically represents unique potential for proponents of renewable energy. The eight main islands that make up the state have relied heavily on petroleum generators for most of their electric needs. That’s a problem because Hawaii doesn’t produce any petroleum, natural gas, or coal, so all fossil fuel supply must be shipped to the islands and stored. None of the islands’ grids are connected by undersea cables, either, so electricity production either happens on that island or it doesn’t happen at all. If petroleum shipments are interrupted, the islands are vulnerable to outages.

But in recent years, Hawaii has been moving to more renewable energy to bring some assurance of stability to the islands. According to the Energy Information Agency (EIA), renewable sources like wind, biomass, and geothermal energy have been on the rise, and rooftop solar systems have expanded dramatically due to government incentives. “In 2015, one in eight Hawaiian residential electricity customers had solar panels,” the EIA wrote. “If generation from distributed sources is included, Hawaii obtained nearly one-fifth of its net electricity generated and more than 23 percent of electricity sold to consumers from renewable sources in 2015.”

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Kauai is the fourth largest Hawaiian island, with an estimated population of a little more than 67,000. Although it’s relatively small, it’s served by its own electricity cooperative (the Kauai Island Utility Cooperative or KIUC) instead of the Hawaiian Electricity Company (HECO). Kauai also has a more aggressive renewables policy than the rest of the state—whereas the state decided on a 2015 renewable portfolio standard of 40 percent renewable energy by 2030, Kauai is pushing for 70 percent renewable energy on the island by 2030 (PDF) and 100 percent renewable energy by 2045. In a February press release announcing these new goals, KIUC CEO David Bissell said, “With the anticipation of the Solar City/Tesla solar-plus-battery facility coming online within a few weeks, we will have already achieved roughly 44 percent renewable generation. This is truly remarkable when you consider that as recently as 2011, we were 92 percent dependent on fossil fuel generation.”

Tesla noted in its press information that KIUC has been able to deliver 100 percent renewable energy to Kauai’s grid for brief periods of time during the middle of the day when there’s low demand for electricity. But the Tesla project will allow the island to send 100-percent renewable energy “more frequently, with greater stability,” the company said.

The Powerpacks Tesla is installing on Kauai are second-generation models built at the company’s Nevada Gigafactory and contain the new 2170 cell developed by Tesla and Panasonic. The inverters are integrated into the battery system, and the battery system has “been rigorously tested to ensure it will perform reliably and provide critical energy to Kauai residents.”

The Tesla solar farm and battery installation are just the beginning for KIUC, too. In January, the power cooperative announced a deal to buy power from AES after it builds a 28 MW solar farm coupled with a 20 MW, five-hour duration battery installation. The power purchase agreement will sell power to Kauai at 11 cents per kilowatt-hour, significantly below Kauai’s current average cost-per-kWh, which is close to 33 cents.

If construction for that system is approved, it would be built on former sugar crop land and come online in 2018. “It will be the largest solar-plus-utility-scale-battery system in the state of Hawaii and one of the biggest battery systems in the world,” KIUC wrote in January, adding that such a system is expected to provide 11 percent of Kauai’s electricity generation.