DOE expands loan eligibility for Puerto Rico’s renewable energy projects
The Loan Programs Office (LPO), an entity under the U.S. Department of Energy, recently announced that the renewable energy generation and storage projects being developed by the Puerto Rico Electric Power Authority (PREPA) as part of its acquisition plan met one of the main requirements to be eligible for financing within the Energy Infrastructure Reinvestment (EIR) program.
Under the EIR program, developers of renewable energy and battery storage projects can apply for low-interest loans supported by the U.S. government for up to 30 years.
“This is excellent news for Puerto Rico, as it further enables my administration’s goal of transforming the electrical system into one that is resilient, reliable, clean and affordable,” said Gov. Pedro Pierluisi. “We appreciate the decision of the Loan Programs Office of the federal Department of Energy, while emphasizing our commitment to continue efforts to advance the fulfillment of our public energy policy.”
Meanwhile, the executive director of the Puerto Rico Fiscal Agency and Financial Advisory Authority (AAFAF, in Spanish) Omar Marrero, said he was confident that the decision will provide “much-needed support” for efforts to achieve a swift transition to renewable sources.
“After months of close collaboration with the federal Department of Energy, we can say that we are confident this determination will open the doors to a huge financing injection that will accelerate the construction and deployment of large-scale renewable energy assets in Puerto Rico,” Marrero said.
Furthermore, the president of the Puerto Rico Energy Bureau (NEPR, in Spanish), Edison Avilés-Deliz, stated that the decision by the U.S. Department of Energy validates the work that the bureau carries out as the regulatory body of the energy sector on the island.
“At the NEPR, we remain focused on doing everything that is necessary to meet the goals established by law and regulation, and above all, ensuring a balance that protects the public interest,” Avilés-Deliz said.
As required by the Energy Bureau, PREPA is in the process of executing an acquisition plan to replace its fossil fuel-based generation assets with renewable energy generation and storage systems. This process is being carried out in stages to achieve the public policy objectives of reaching 40% renewable energy generation by 2025, 60% by 2040 and 100% by 2050.
PREPA’s acquisition plan is divided into stages. In each stage, PREPA issues a request for proposal (RFP) to develop renewable energy projects capable of meeting certain generation targets. The utility has executed several agreements for eligible technologies under the first stage of the acquisition plan. The RFP for the second stage is currently in progress, while the third stage just opened its proposal period on July 18.
The LPO’s determination means that the projects already contracted under the first stage of PREPA’s acquisition plan, as well as the projects to be contracted under the second and third stages, would replace parts of the energy infrastructure that have ceased to operate. This makes such projects partially eligible for the EIR, one of four components of the Clean Energy Financing Program under Title 17 of the U.S. Energy Policy Act. Unlike the other three programs under Title 17, projects under EIR do not require the technology used in the project to be innovative.
