- Clearway Energy cancels three solar projects in Hawaii due to concerns over Hawaiian Electric’s financial instability following wildfire-related litigation losses.
- Hawaiian Electric’s financial strain raises fears that other renewable energy developers may also pull out, threatening Hawaii’s 2030 renewable energy goals.
- Hawaiian Electric seeks legislative measures to secure payments for renewable developers while continuing negotiations with other projects slated for completion by 2033.
Clearway Energy has cancelled three solar power purchase agreements (PPAs) with Hawaiian Electric, citing concerns over the utility’s financial stability. The decision followed Hawaiian Electric’s significant economic losses from lawsuits tied to the August 2023 wildfires, which ravaged Maui and destroyed Lahaina.
The fires left the utility with billions in rebuilding costs, worsening its financial health. Hawaii Public Utilities Commission Chair, Leo Asuncion confirmed the cancellations during a panel at the National Association of Regulatory Utility Commissioners conference.
He warned that this move could disrupt future renewable energy projects in Hawaii. Clearway planned to provide nearly 200 MW of solar energy through the Makana La Solar, Kaiwiki Solar, and Puako Solar projects, which Hawaiian Electric selected through a recent proposal request (RFP).
Asuncion voiced concerns that other developers might follow Clearway’s lead, potentially derailing Hawaii’s renewable energy goals. “If more developers back out, Hawaii risks missing its renewable energy targets,” he said.
Despite the setback, Hawaiian Electric aims to achieve 40% renewable energy by 2030. Hawaiian Electric spokesperson, Darren Pai stated that the company continues negotiating with 12 other projects from the same RFP, targeting commissioning between 2026 and 2033.
Pai also mentioned that the company seeks legislative support to guarantee payments to renewable energy developers, even during financial difficulties, to boost investor confidence. Hawaiian Electric Industries (HEI), the parent company of Hawaiian Electric, reported a $104.4 million net loss in the third quarter of 2023 due to wildfire-related lawsuits.
To address this, HEI raised over $550 million through a stock sale to fund settlements. However, financial pressures persist, with concerns over HEI’s enormous debt and obligations.
Clearway Energy, which operates four other renewable energy projects on Oahu, expressed willingness to resume talks once Hawaiian Electric’s financial situation stabilises. Meanwhile, Hawaii’s public utility regulator introduced new measures to strengthen infrastructure, including risk mitigation and wildfire forecasting strategies.
The financial strain on Hawaiian Electric raises broader concerns about the stability of utility companies facing natural disasters and costly litigation. While the company secured funding to cover part of its legal expenses, this has not eased all investor concerns.
The ongoing uncertainty could deter future investments in Hawaii’s renewable energy transition. Hawaii’s energy leaders now face the challenge of preventing further project delays or cancellations.
Clearway’s exit marks a critical moment for the state’s energy sector, highlighting the urgent need for utilities to strengthen their financial models to withstand the growing risks posed by climate change and natural disasters while keeping Hawaii’s renewable energy transition on track.