The need for micro grids in Puerto Rico after the fallout from Hurricanes María and Irma

by | Mar 20, 2019 | Puerto Rico | Comments

Before Hurricane María hit in September 2107, Puerto Rico was already facing a major financial crisis, as the territory was $73 billion in debt and had recently filed for municipal bankruptcy. $9 billion of this debt was owed by the Puerto Rican Electric Power Authority (PREPA), whose leadership then fell under scrutiny after María for awarding shady building contracts, particularly concerning Whitefish Energy Holdings, a tiny construction company from Montana that quickly, and suspiciously, won a $300 million bid to rebuild the grid. Contention surrounding mismanagement lead to the resignation of PREPA’s chief executive, Ricardo L. Ramos in November 2017, but the controversy didn’t end there. The US House Natural Resources Committee also issued a letter in March 2018 asking PREPA to “preserve all records, documents, data and communications regarding all open PREPA investigations into ‘allegations of corruption, favoritism, or abuse of authority by PREPA employees, officials, or contractors.’” In a November 2016 Expert Report issued by the Synapse Energy Associates, researchers noted that insufficient revenues (PREPA is publicly owned), poor fundamental infrastructure, and questionable leadership all contributed to the overall ineptitude of PREPA.

In August 2018, The New York Power Authority (NYPA) released the “New York State Utility Contingent Emergency Response to Hurricane Maria After Action Report.” In section 3.2 titled  “State of PREPA Grid before Hurricanes Irma and María,” NYPA notes that “The island includes central mountain ranges extending the length of the island from east to west with peaks as high as 4,390 feet. Puerto Rico’s geography, climate, and dispersion of its electric power customers across the Commonwealth, … present many challenges in operating and maintaining the electric power grid.” One of the other main underlying problems concerning Puerto Rico’s energy future is the fact that the territory must import all of its fossil fuels, and according to the US Energy Information Administration(EIA), in the fiscal year ending June 30, 2017, 47% of Puerto Rico’s electricity came from petroleum, 34% from natural gas, 17% from coal, and 2% from renewable energy. Of that 2%, more electricity came from solar energy than any other renewable source.

Not long after María devastated Puerto Rico’s main electrical grid, during a hearing in front of the Senate Energy and Natural Resources Committee, Governor Ricardo Rosselló expressed to lawmakers that he wished to have 25% of the territory powered by electricity from solar energy, stating that “[t]his is an opportunity to make microgrids in Puerto Rico so they can be sustained in different areas.” Although the installation of microgrids  would definitely require a large amount of private investment and planning, after it took 328 days to return power to all of Puerto Rico, residents who suffered through this debacle would surely agree that anything would be an improvement.

Microgrids are localized grids that can disconnect from the traditional grid to operate on their own. Microgrids can help to improve system response and recovery, allow the integration of other energy resources such as renewables like solar, and the use of local sources of energy helps reduce energy losses in transmission and distribution. In a report titled “Build Back Better:
Reimagining and Strengthening the Power Grid of Puerto Rico,” presented to Governor Andrew Cuomo in 2017, members of the Puerto Rico Energy Resiliency Working Group, an amalgamation of energy experts,  encouraged the pursuit of two specific deployment alternatives. The first is critical infrastructure such as hospitals, police and fire stations, emergency shelters, cell phone towers, water treatment plants, airports, sea ports, and other commercial and industrial centers that provide services during and after disasters. The second alternative is to support remote communities that are more difficult to receive help after an outage, or that are served by only a single utility line.

In a response to the catastrophic power outages caused by Maria, on January 4, 2018, the Puerto Rico Energy Commission published a draft Regulation on Microgrid Development, with the intent to create and provide a “stable and predictable regulatory framework” through the development and installation of microgrids, and in May of 2018, a final Regulation on Microgrid Development is adopted and enacted. The main determinant that defines a type of microgrid is whether the main purpose of the system is to supply the needs of the grid’s members or owners, or if the purpose is to sell to non-owners. According to regulation rules, 3 main types of Microgrids will be recognized:

  • Personal Microgrids (owned by not more than two Persons (a natural person, and any legal entity, municipality, or government entity, other than the Puerto Rico Electric Power Authority)
  • Cooperative Microgrids (No single member can possess or control more than 35%)
  • Third-Party Microgrids (owned or operated by any Person for the primary purpose of selling Energy Services)

Focusing mainly on powering critical services, Elon Musk, CEO of Tesla, has led the charge to offer energy alternatives in Puerto Rico after Maria. Tesla shipped Powerwalls (their home energy storage solution), and Powerpacks, which are commercial and utility-scale battery packs. Tesla also deployed a series of Powerpack systems on the Puerto Rican islands of Vieques and Culebra for a sanitary sewer treatment plant, the Arcadia water pumping station, the Ciudad Dorada elderly community, the Susan Centeno hospital, the Boys and Girls Club of Vieques, as well as a solar+battery system at a hospital in Puerto Rico. On April 18, 2018, one million PREPA customers were out of power again, but few hundred locations with Tesla Energy storage systems had access to electricity, thus giving hope that energy alternatives like microgrids fueled by renewable energy, such as solar, can save many more lives should disaster come again to Puerto Rico during hurricane season. On January  28-29, the 2nd Puerto Rico Grid Revitalization & Investment Forum (PR-GRID II) will take place in San Juan. According to Homer Microgrid News, “PR-GRID II is convened as a marketplace for commercial, industrial, and municipal customers to meet and transact with developers and financiers of microgrids, mini-grids, solar, and storage.” In other words, let the bidding begin.