Hawaii's Ambitious Climate Goals Face Energy Transition Challenges

A chain of islands in the middle of the Pacific Ocean without domestic oil or gas reserves, the 50th US state has long relied on imported fossil fuels to power its economy.

Foreign petroluem fuels much of the energy grid, and the sea and air transport that Hawaii relies on to move people and goods — and to deliver the near 10 million annual tourists to its shores.

Hawaii began to reduce this fuel dependency in 2015 when it became the first US state to commit to transitioning to 100% renewable electricity by 2045. The aim was to exploit homegrown solar, wind, bioenergy, hydroelectricity, and geothermal power contained in its volcanic landscape.

That target was expanded out to the whole economy in 2018, with Hawaii adopting a pioneering "net-negative" carbon emissions goal for 2045 at the latest. And a world first youth-led climate case also forced the state to decarbonize the transport sector by the same year.

Peter Sternlicht, a board member of renewable energy nonprofit, Sustainable Energy Hawaii, says such ambitious sustainable energy targets that "minimize, or wholly eliminate, dependence on imported energy" have been driven by a quest for energy self-reliance.

As the latest oil shock caused by the US-Israel war on Iran resonates across global markets, the goal remains even more relevant. But how can a decarbonized, energy independent economy be achieved within 20 years?

The challenge

"The state needs many policies if it's going to hit its 2045 goal," said Paul Bernstein, an economic policy specialist at the University of Hawaii.

Hawaii's chain of islands have diverse energy needs based on their population and geography. The island of Oahu, containing the state's largest city, Honolulu, will not be easy to decarbonize.

"On Oahu, where population density and land constraints make the transition more challenging, the state is prioritizing grid modernization, more efficient generation, and major private-sector investment to support large-scale renewables and storage in the years ahead," said Mark B. Glick, chief energy officer of the Hawaii State Energy Office.

Meanwhile on Maui, after a 2023 hurricane downed power lines that sparked wildfires claiming 102 lives, the state energy office says it has been a challenge for Hawaiian Electric, the state's largest utility, to continue an affordable transition to renewable energy.

Even where wind, solar and batteries are helping with the transition, and with around 50% of homes on Oahui having rooftop solar, Glick says geothermal energy needs to be a bigger part of the mix.

On Hawaii Island, the state's largest, abundant geothermal energy had been harnessed to provide a peak of around 30% of its electricity in 2017. Output was subsequently reduced by a volcanic eruption but the authorities are planning a 20% capacity expansion by late 2026.

A major challenge for Hawaii is decarbonizing shipping and air travel, exacerbated by a reliance on planes for tourism.

"Basically all our goods are brought in from somewhere else," noted Paul Bernstein. He says sustainable aviation fuel and plane efficiency improvements will help reduce air emissions, but that flight electrification is a long way off.

Pathways to decarbonization

In 2022, the Hawaii state legislature passed an act calling for the state energy office to "analyze pathways" and to achieve the state's "economy-wide decarbonization goals."

A report commissioned by the state legislature presented decarbonization scenarios in which Hawaii's energy sector could transition within decades. It would require solar, wind and storage to be "deployed at an unprecedented rate", combustion engine vehicles to be phased out in favor of zero emission EVs, and the retrofitting of buildings for better heating and cooling efficiency.

In addition, increased quantities of sustainable aviation fuel would have to replace standard jet fuel needed for air travel.

But the report also notes that biodiesel, biomass, geothermal, and hydropower generation would have to play a "notable role" if all Hawaiian islands are to meet the 2045 net-zero target.

A fossil fuel phase-out could also be accelerated with a carbon tax that increases the prices of oil or gas to promote the transition to clean energy. Meanwhile, existing taxes on each barrel of imported fuel are already supporting decarbonization programs.

A carbon tax could also be vital to developing , which remains the biggest hope for a transition to clean domestic energy. A relatively small-sized geothermal plant typically utilizes underground volcanic heat to create steam that turns a turbine to generate zero carbon power.

"The State is conducting resource characterization of geothermal potential to better understand where geothermal can be developed, consistent with cultural values and community interests," said Glick.

While it was long assumed that the energy source was not viable on the most populous island of Oahu, more recent discussions indicate "that geothermal actually could be available where it's needed most," said Paul Bernstein.

"If that were the case, then that would really change the game," he added.

Although production costs are relatively low over a facility's lifetime, it can be costly to uncover geothermal resources and much more investment will be needed in the exploratory phase. Local consultation will also be vital due to pushback from native Hawaiian communities over tapping into sacred volcanoes.

Renewable roadblocks and calls for LNG

Since it will be difficult to sufficiently ramp up geothermal energy in the next 20 years to meet the 2045 transition goals, the Hawaii state government has recently contemplated lower emission "transition" fuels to maintain momentum away from high polluting energy.

Hawaii is considering retiring inefficient oil-powered electricity generators and replacing them with one high-efficiency gas-fired generator fueled with imported liquefied natural gas (LNG).

The state-of-the-art power plant would reduce greenhouse gas emissions by 20% over 20 years, and be 20% cheaper than oil-fired energy — Hawaii's electricity is the most expensive in the US.

Mark Glick of the Hawaii State Energy Office, says the more technologically-advanced gas power plant is better able to "increase renewable integration" into the grid.

But experts say that while LNG is cheaper than oil and has lower emissions, the cooling, shipping and regasification costs are also high.

If renewable energy continues to expand along with battery storage, LNG plants could become expensive, underused assets. "Solar and battery systems are already competitive with fossil fuels and avoid the risks tied to global fuel markets," noted analysis by the University of Hawaiʻi Economic Research Organization.

Edited by: Tamsin Walker