Hawaii Utility Sees RNG, Hydrogen as Part of a Net-Zero Future

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--As part of the push to displace fossil fuels from the state's grid, and working off a staggering 50-year history of hydrogen blending, a gas utility in Hawaii is looking to do more.

Hawaii Gas sent out requests for proposals to state and local suppliers for renewable natural gas (RNG) and hydrogen to secure enough supplies to replace all of the gas in its system. State law mandates that 100% of its total electricity comes from renewables by 2045.

The company has been using local-sourced RNG since 2018 on the largest island of the 1,500-mile chain. While lawmakers in Britain are still mulling it over to a large extent, Hawaii Gas has been blending up to 15% hydrogen into its gas mix since 1974.

"We already have a 50-year head start on mainland gas companies in our use of hydrogen in utility gas distribution," said Alicia Moy, president and chief executive officer of Hawaii Gas. "While our business represents less than 1% of the state's greenhouse gas emissions, we are committed to reducing our carbon footprint."

Hawaii is unique in that it has no crude oil or natural gas reserves. And along with North Dakota, it's one of only two states that produce a synthetic form of natural gas, drawing in feedstocks of naphtha sourced from a refinery.

Its renewable natural gas, like elsewhere, is derived from the decomposition of organic matter--wastewater in this case.

Hawaii is unique in many other ways as well. Each of the main islands have their own grids and none are connected together by transmission lines. Most of its crude oil comes from outside the United States, namely Argentina and Libya and, like electricity, there are no island-to-island connections, giving alternative resources much leeway.

Solar energy dominates the power sector, taking up about 58% of the energy mix last year. A lot of that comes from small-scale facilities and about a quarter of people living in the state have rooftop solar installations.

Surprisingly, it has no offshore wind farms, though the interest is there.

That opens the door to more forms of renewable gas, though some of the state's hydrogen feedstock is still derived from petroleum products.

Hawaii Gas, however, is considering both green and blue forms of hydrogen. Green hydrogen is an emerging--and somewhat controversial--processing method that draws on renewable energy to power an electric current that can split water into the elemental components of hydrogen and oxygen.

Critics argue those renewable resources should stay on the grid.

Blue hydrogen, meanwhile, splits conventional natural gas into carbon and hydrogen, deploying sequestration technology to capture the carbon byproducts.

Neither hydrogen nor RNG are necessarily new, but the recent rollout has been volatile. British Gas was among those proposing hydrogen for the grid of a village with around 2,000 homes.

That trial, however, is now voluntary amid the backlash because of costs. Costs vary, but hydrogen can run as much as 10 times as high as natural gas, using the Henry Hub price for comparison.

Costs are already high in Hawaii given its remote location. The state utility on Oahu raised rates by more than 20% last year due to supply-chain issues and the high price of natural gas as it phased out coal.

That was last year -- the concern now is inflation and the health of the global economy, issues that may deter some would-be investors for now. Headwinds remain, but will eventually ease.

Hawaii Gas touts itself as the national leader in blending both RNG and hydrogen into the grid and is therefore undeterred.

"We prefer to make this change using local sources, and hope potential suppliers interpret our request for proposals as a signifier of a growing demand for renewable gas," Moy noted.

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