Japan’s largest power generation company JERA Co., Inc. (“JERA”), has shared its $2 billion proposal to modernise Oahu’s energy system.

Developed with input from Hawaiian energy stakeholders and supported by agreements with local partners, the proposed project represents a tangible step to move Hawaii off its historic dependence on oil by replacing aging, oil-fired power generation capacity on Oahu island with infrastructure designed to enhance energy grid resilience and lower emissions.

The $2 billion upgrade cost was estimated by the Hawaii State Energy Office’s Alternative Fuel, Repowering and Energy Transition Study. Consistent with that analysis, JERA’s proposal outlines how new energy assets could be developed on Oahu, including a ~500-megawatt hybrid combined-cycle and simple-cycle power facility, supported by offshore liquefied natural gas (LNG) import infrastructure.

The proposed facility will be designed with modern turbine technology that improves system stability and operational performance. It is expected to significantly reduce generation costs while improving grid reliability and reducing overall greenhouse gas emissions.

According to a statement issued by the state Governor, the proposed facility’s fast-start and fast-ramp capability is “highly responsive to changing grid conditions, which will enable greater integration of renewables on Oahu.”

Approximately 75% of the investment is related to the new power plant — infrastructure that would be required to replace aging generation and maintain grid reliability regardless of fuel source. The remaining 25% is related to LNG-related infrastructure, including a floating storage and regasification unit (FSRU) and associated supply components.

Overall, more than 90% of the investment is earmarked for assets with long-term use or redeployment potential — including turbine equipment, grid-supporting infrastructure, pipelines, and the FSRU — helping minimise stranded asset risk while maintaining flexibility for the future.

“Diversifying Hawaii’s energy supply is a critical step toward strengthening our state’s energy security and reducing reliance on oil,” said Alicia Moy, Hawaii Gas president and CEO. “Hawaii Gas supports efforts to fortify and develop a pipeline infrastructure network that will be able to deliver the decarbonized fuels of the future, including renewable natural gas and hydrogen, which we currently blend into our fuel mix on Oahu today. The expansion of LNG availability for the state will not only lower costs and lower emissions, it will accelerate the transition to these future fuels. We are in support of modernizing our energy systems to provide for more stability, affordability and fuel efficiency for the people and businesses of Hawaii.”

The project will require approval by the Hawaii Public Utilities Commission and other state and federal agencies. JERA anticipates initiating required state and federal permitting processes in the coming months, including potential filings with the Federal Energy Regulatory Commission (FERC) and the City and County of Honolulu, subject to final regulatory determinations.