Editor’s note, September 1: This story was originally published on August 22, 2022. It has been updated to note the completion of the coal plant’s shutdown.
KAPOLEI, Hawaii — Hawaii’s only coal plant burned the last of its fuel and shut down at 11:59 p.m. last night.
The AES plant in a West Oahu industrial park delivered cheap, reliable electricity to Honolulu and the rest of Oahu for 30 years. But Hawaii is switching from burning coal and oil for electricity to producing renewable power and storing it in batteries, per a landmark 2015 law. The state has added wind and solar generation, but this is the first time it will couple building new clean energy with shutting down a major fossil-fueled plant.
That environmentally beneficial change spells the end of some 40 full-time jobs at the Barbers Point plant. AES is working to reassign its close-knit staff to other roles in the state or elsewhere in the energy company’s far-flung portfolio of facilities.
The timing of the closure was dictated by another piece of legislation passed in 2020 specifically “to eliminate the use of coal in Hawaii for electricity production.”
But the glide path to a cleaner island grid hit unexpected turbulence. Russia’s invasion of Ukraine triggered a global energy crisis and forced Hawaii to find new sources for a third of its oil. The result is sky-high prices at the gas station and for electricity, which in Hawaii mostly comes from burning oil. The AES closure makes the state’s grid more oil-dependent in the near term; that means electricity rates will go up before the new renewables shift the balance with much cheaper power.
“It’s about having a North Star and being clear about what the long-term objectives are so that we can make generational decisions that will provide long-term stability and support for our communities,” Governor David Ige told Canary Media at an August 18 ceremony marking the plant’s service to Oahu.
Hawaii has its own particularities, but coal retirements and renewables construction are ramping up across the entire U.S. Every state needs to manage its own decarbonization strategy within a broader, often unpredictable energy system. In that sense, the lessons of Hawaii’s coal closure resonate far beyond the lei-clad workers and politicians who gathered to celebrate the plant’s legacy.
Energy transition requires workforce transition
Hawaii’s corporate and political leaders struck a delicate balance at the ceremony, speaking over the industrial roar of the coal plant that served as the backdrop while it is still pumping electricity to the grid. Most expressed optimism about the cleaner energy system to come while praising the hard work of the plant’s staff over the last three decades.
Worker testimonials described a family-like camaraderie on-site, where some staff members had toiled since the facility was built. Now AES is hustling to find new homes for them.
“We care about our employees, and we want each and every one of them to have a place to land when this is all done,” said Sandra Larsen, the market business leader of AES in Hawaii.
It helps that besides running the coal plant, AES is deeply involved in the future of Hawaii’s grid. The company built the largest solar-paired battery project in the world on Kauai in 2019, and it is constructing numerous other solar and battery facilities across the state. Several coal plant workers have trained for jobs associated with bringing those clean plants online.
Some technicians were still looking for new jobs. Others will retire or transfer to AES properties in other states. Plant Manager Steven Barnoski will leave Oahu after five years to work in Indiana, where AES owns the utility serving the Indianapolis region. Still more workers are finding employment with other companies nearby; the industrial park hosts several thermal power plants that offer more directly transferable roles than solar or battery developments.
Barnoski expressed pride in his colleagues who kept the plant running all these years but said he didn’t take it personally that the facility was getting shut down.
“The plant’s closing, yes, but we’re moving our company and our employees over to clean energy or other roles within AES,” he said. “We’re slowly closing down the coal plants and building a lot more renewable energy.”
Larsen stressed the importance of planning ahead and starting transition conversations sooner rather than later.
AES’ clean energy portfolio created opportunities that wouldn’t have been available if the company focused solely on outgoing modes of power production, and the company has provided a level of support that many workers on the mainland have not received when their coal plants shut down.
Oil spoils the party
The 30-year-old power plant wasn’t the only thing looming in the background of the farewell party. So was the knowledge that its closure would temporarily increase Oahu’s dependence on oil-fired electricity, at a time when oil prices are unusually high.
“This has to be the most tumultuous time in terms of the energy space,” Ige noted. “I don’t think anyone anticipated Russia invading Ukraine and all of the turmoil and price increases that have been driven by that activity.”
Hawaii until recently imported one-third of its oil from Russia, and the state scrambled to source the fuel elsewhere this spring, at higher cost. Meanwhile, the solar and battery projects intended to replace the coal plant’s production have largely fallen behind schedule. Clearway Energy completed its 39-megawatt Mililani project in July, which now sends much cheaper electricity to the grid than the oil plants can. But eight other clean-energy sites on Oahu are still finishing up construction.
“We do know, over the next 12 to 24 months as those projects come online here on Oahu, that our residents will begin to see more stable energy prices and ultimately a reduction in their energy bill,” Ige said.
The legislature’s coal-shutdown mandate should have been contingent on having enough renewable electricity to fill the gap, State Senator Glenn Wakai told Canary Media after the ceremony. But there wasn’t the political will in the legislature to extend the life of the coal plant, he said — doing so would have resulted in pushback from environmentalists committed to action on climate change.
“I believe that today’s a great day, two years too early,” Wakai said. “If you’re a believer that climate change is going to come to an end because of the shutdown of this coal plant, it’s a great day for you. If you pay an electricity bill, this is a disastrous day for you.”
If there’s a lesson to extrapolate here, it’s that locking in near-term, specific operational choices via legislation limits flexibility when circumstances change. To indulge a hypothetical: If AES had been allowed to extend its coal contract by another year or two, Oahu may have ridden out the current oil price shock. Two extra years could have bought time to complete more large-scale solar and storage projects, each of which will reduce demand for oil generation.
Then again, getting rid of old energy resources will always be uncomfortable, and absent a firm deadline, power companies are liable to find reasons to keep legacy plants online. That incremental fossil fuel combustion continues contributing to climate change and spits more pollutants into surrounding neighborhoods.
“There was a time for coal, but that time is coming to an end,” said State Representative Nicole Lowen, who chairs the Committee on Energy and Environmental Protection. “It’s not going to do us any good to keep delaying this transition.”
For better or worse, the legislative deadline forced the transition to begin in earnest, putting the onus on the various camps in Hawaii’s energy community to figure out how to make it happen.
“What we have to do now from a legislative and government standpoint is hasten the permitting process and really push [utility Hawaiian Electric] to have interconnections, because they’re part of the solution as well,” Wakai said. “Because of the sense of urgency now, I think you’re finally going to see government permitting move at the speed of light.”
The site of the coal plant could resurface in that permitting queue. After several months of remediation work, demolition is scheduled to begin in January, Larsen said. Once the old equipment is cleared out, the site’s sizable grid hookup will be an attractive asset for new clean power development.
“There’s definitely a lot of discussion and different things being explored,” Larsen said.
Julian Spector is senior reporter at Canary Media.