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CNE: Electric grid reconstruction proceeding at ‘relatively slow pace’

The reconstruction of Puerto Rico’s electric grid has proceeded at a “relatively slow pace” because there seems to be uncertainty about which modernization plan should be implemented, concluded an analysis by the Center for a New Economy.

“There is a plan designed by the Puerto Rico Electric Power Authority [PREPA], there is the current integrated resource plan, there is LUMA’s system remediation plan, and there is the grid modernization plan being developed by the [U.S.] Department of Energy as of this writing,” said Sergio Marxuach, policy director at the San Juan-based think tank, which focuses on economic and policy research.

“It is not clear to us how each of these plans relates to the other or which has precedence in the case of conflicts among and between them,” he added.

Another factor affecting the pace is the joint plan by PREPA and the Federal Emergency Management Agency (FEMA) to build significant generation capacity based on natural gas at the old Palo Seco plant site.

“This investment of approximately $900 million has been questioned by environmentalists as unnecessary and perhaps even unlawful, given Puerto Rico’s legal requirement to transition to 100% renewable generation by 2050,” Marxuach stated.

“Proponents, on the other hand, argue that this new fossil fuel generation is necessary to stabilize the system and to provide a ‘bridge’ to full renewable generation on the island. It is important to address this policy issue as soon as possible to avoid further delays,” he said in an analysis of the reconstruction and transformation of Puerto Rico’s electric power system.

The situation “is entering a critical phase, as several important processes — PREPA’s operational and financial restructuring; the commencement of large-scale projects to rebuild the grid; and the elaboration of a new integrated resource plan — converge at a key point in time,” Marxuach said.

“However, existing policy disagreements regarding the extent of the use of natural gas during the transition to 100% renewable generation and the ongoing debate over the advantages and limitations of installing distributed generation capacity [primarily rooftop solar systems with batteries] instead of utility-scale projects have generated delays in the rollout of new renewable generation capacity and pose a serious risk to Puerto Rico’s ability to meet its renewable energy objectives,” said Marxuach in the analysis released Tuesday.

He pointed out that supporters of rooftop solar systems argue that Puerto Rico has enough rooftops to install sufficient capacity to render unnecessary the need for large utility-scale solar farms.

However, proponents of large-scale solar facilities argue that a system based solely on rooftops would be unstable given Puerto Rico’s energy demand, that it would take too long to bring up to scale, and does not consider the needs of multifamily units, commercial clients or industrial and manufacturing operations. A U.S. Energy Department interim report concluded that Puerto Rico needs both kinds of systems, the analysis states.

“This debate is more than a mere policy disagreement because the policy decision will influence the design of the new grid,” Marxuach said in his review. “If the government of Puerto Rico decides to rely mostly on distributed rooftop solar systems, the grid must be designed one way; while if it decides to rely mostly on centralized utility-scale solar generation, the grid has to be designed another way.”

“It seems the DOE has concluded the new grid can be designed to support both distributed rooftop solar generation, which is good for hard-to-reach, isolated last-mile communities, and large-scale utility generation, which can provide stable base loads to the system,” Marxuach said.

“Unfortunately, the DOE’s final report on grid design will not be ready until December. So it appears unlikely this policy disagreement will be solved before then,” he concluded.

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