Renewable energy site developers are hopeful that the process of establishing wind and solar farms in Puerto Rico will get easier as more projects in the pipeline are approved.
In the meantime, however, the general consensus among executives heading four projects currently under construction is that the government has to do its part to establish clear guidelines and rules to ensure the sector’s growth going forward.
“Puerto Rico, the Puerto Rico Electric Power Authority and the entire environment here is investment grade and capital is available. What we need is for the process to establish these facilities to become more transparent and easier,” said Collie Powell, senior developer for Pattern Energy, the company behind the controversial $250 million Santa Isabel windfarm project.
Concerns such as complicated permitting process, mechanisms to strike long-term power purchase agreements with Prepa and costs were laid out on the table during a Renewable Energy Entrepreneurial Forum sponsored by Banco Santander Thursday.
The Santa Isabel wind farm was the center of controversy several weeks ago, when a shipment of the 175-foot blades used to build the mills arrived at the Port of Ponce. Opponents of the project have claimed that rather than be used to plant windmills, the prime agricultural lands should be used to harvest food.
During his presentation, Powell reiterated that the mills being erected are taking up the minimum amount of land possible and are coexisting with crop activity. When fully operational, the Santa Isabel wind farm will have the capacity to provide power to 20,000 to 30,000 homes.
“There is an urgent need here for diversification and development of renewable energy. Those people who are opposing the project today, will become its champion in the future,” he said.
Perhaps one of the most surprising statements of the day came from Gonzalo Rodríguez, chief business officer for Gestamp Wind, who said Puerto Rico “is not the ideal place” to establish wind farms because the breeze is not strong enough to move a windmill’s mammoth blades.
“Puerto Rico is a good place to install wind turbines because of the need to diversify, but it is not a part of the world where the winds are particularly strong, except when you have a hurricane,” he said. “But because the capacity factor is not high for wind, we need to have a very clear path going forward, including federal and local policy that looks forward. This has to be a joint effort by developers and policymakers.”
Gestamp Wind is the developer behind a $90 million windmill farm in Naguabo that is slated to produce 50 million kilowatts per year — enough to power 10,000 homes with clean energy.
“We really hope that these projects help to break the ice because Puerto Rico really needs them,” said Rodríguez.
The three large-scale wind farms promise to generate a combined 160 megawatts of alternative power once the mills start spinning before year’s end. A solar energy project under construction in Guayama by AES Ilumina, LLC will add another 44 mw of power to the clean energy inventory.
Neil Watlington, who heads the $90 million project, suggested that the island find a way to reduce entrance costs for renewable energy proponents, who on average must invest more in Puerto Rico.
“Equipment can’t be bought of the shelf. Everything has to be customized,” he said.
Renewable energy companies have been racing against the clock, applying for grants and credits that became available in 2009 under the American Recovery and Reinvestment Act and that expire at the end of 2012, to build their projects.
Two more solar farms with a combined $68 million in associated investment are slated to break ground in Loíza and Salinas before year’s end, the Energy Affairs Administration said Thursday.
Santander funds alternative energy
Santander CEO Javier Hidalgo, who opened the half-day forum with a presentation of his own, said the bank’s commitment to Puerto Rico includes providing financing options for renewable energy projects.
In 2011, the Spanish financial institution approved $2.6 billion in funding for 56 alternative energy projects in the U.S. and Puerto Rico.