The Kauai Island Utility Cooperative continues its innovation streak with the solar-plus-storage plant for peak capacity. AES Distributed Energy will build a solar-plus-storage “peaker plant” on the Hawaiian island of Kauai that stands out both in capacity and power price.

The project, if approved by state and local regulators, will combine 28 megawatts of solar photovoltaic capacity with 20 megawatts of five-hour duration batteries. AES will own and operate the system, and has executed a power purchase agreement to sell power to the Kauai Island Utility Cooperative (KIUC) at 11 cents per kilowatt-hour. The project is expected to be operational by late 2018.

Once completed, the facility will generate 11 percent of the island’s electricity and push the share of renewable generation above 50 percent, KIUC President and CEO David Bissell said in a statement.

“The project delivers power to the island’s electrical grid at significantly less than the current cost of oil-fired power and should help stabilize and even reduce electric rates to KIUC’s members,” he said. “It is remarkable that we are able to obtain fixed pricing for dispatchable solar-based renewable energy, backed by a significant battery system, at about half the cost of what a basic direct-to-grid solar project cost a few years ago.”

The AES project in Kauai will still help make the case for solar-plus-storage in more challenging markets. As plants like this one log more hours of operation, and prove their ability to stand in for more expensive fossil-fueled peakers, storage developers will harvest more data to support project pitches elsewhere. At Clearworld, we understand that solar-plus-storage also has to prove it is worth the additional effort compared to pure solar plants. The economics become much more favorable in a solar-saturated environment, where the marginal value of new solar generation is low but the value of peak shaving is high.