Grid crisis forces Puerto Rico to eliminate renewable energy targets

A new law in Puerto Rico has modified energy transition goals due to the island's current power grid crisis and to ensure dispatch reliability.

The legislation, known as Act 1-2025 (Ley 1-2025 in Spanish), amends the US territory's Public Energy Policy Act and the Energy Diversification Act.

The law "eliminates the interim renewable energy targets of 40% by 2025 and 60% by 2040, while maintaining the goal of achieving 100% renewable energy by 2050," local energy regulator PREB said in a resolution and order.

It also allows AES's 450MW Guayama coal-fired power plant to continue operations until 2032.

Read Consultation begins for change to AES Puerto Rico coal plant PPA

"This [coal] generation represents 25% of Puerto Rico's energy demand. Currently, we do not have an alternative energy source to replace this generation that is reliable, non-intermittent, and affordable for our people," the government said in a release.

"Given the pattern of forced outages of [power authority] Prepa's existing, aging, thermal generation fleet, the available generation capacity is extremely limited and may complicate needed maintenance and repairs to the existing fleet," the regulator said.

Genera operates Prepa's legacy thermoelectric plants.

PREB has ordered Prepa to notify public-private partnerships authority P3 about the establishment of a P3 request for proposals for new generation sources.

New units should not exceed 400MW and not be limited to gas plants but include all baseload generation types with the possibility of incorporating 2,500-3,000MW.

The government added that "eliminating the intermediate renewable energy targets, but maintaining the goal of 100% by 2050, allows the government of Puerto Rico to flexibly approve conversions of current generating plants to cleaner sources, including coal-fired generation, such as natural gas and hydrogen."

PREB highlights, however, that "numerous independent power producers ("IPPs") have been awarded renewable energy projects that could potentially supply from 30% to 40% of the total energy needed to meet the island's yearly energy demand."

Energy generated by fuel in Puerto Rico by % (Source: Genera)

Also read Pressure increasing for Puerto Rico to address 700-850MW deficit

Local think tank Cambio said: "We are not facing a problem of lack of generation capacity, we are facing a problem of lack of execution capacity, and of correcting and preventing failures."

Cambio's recommendations for addressing the grid's shortfall include: 

• Establishing aggressive and effective energy efficiency and demand management programs.
• Recognizing and promoting the integration of rooftop renewable energy with storage to ensure reliability and achieve a cost-effective electrical system.
• Cancelling privatization contracts and implementing a renewed public governance model.

Meanwhile, Genera launched bidding for the civil structuring installation of a 40MW battery energy system at Yabucoa and for architectural and engineering services. Procurement information is available here.