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In Blow to Natural Gas, Puerto Rico Regulators Affirm Solar-Centric Grid Overhaul


The Puerto Rico Electric Power Authority (PREPA) will be required to acquire thousands of megawatts of renewables and storage in coming years, according to a Monday order from the island’s energy regulators that also rejected many natural gas additions included in the utility’s integrated resource plan.

In its IRP filed last year, state-owned PREPA presented a preferred scenario that included 1,800 megawatts of solar PV and 920 megawatts of energy storage additions in the coming five years, plus eight mini-grids that could be isolated to power certain sections of the island if the electricity system is disrupted.

The Puerto Rico Energy Bureau this week presented a modified plan that included an even higher mix of renewables: at least 3,500 megawatts of solar and more than 1,300 megawatts of storage by 2025.

Regulators rejected PREPA’s $5.9 billion plan for its mini-grid transmission system, with plans to establish a new proceeding to optimize distribution and transmission spending and analyze potential cheaper resiliency options. The bureau also wants PREPA to hold off on many new gas additions, calling for “limited replacement” of older units through competitive procurement that considers a wide range of resources.

Taken together, the order significantly revamps the utility’s plan, prepared by Siemens, which many environmental and clean energy groups had criticized as too reliant on natural gas. Regulators framed their decision on the utility’s IRP as a “no regrets” approach to Puerto Rico’s electricity transition. 

“The most important issues were rejected, specifically the reliance on new [liquified natural gas] terminals in Puerto Rico and new natural gas facilities,” said Agustín Carbo, a senior manager at the Environmental Defense Fund’s energy program and a former chair of the energy bureau. “I thought that was huge.”

Alongside relying on more renewables, the proposal from regulators will cost less, around $13.8 billion compared to about $14.4 billion for PREPA’s preferred plan.

Regulators approved billions of dollars for transmission and distribution hardening and up to $5 million for initial permitting and siting work on a proposed gas plant, though the bureau did not give that plant the official go-ahead. PREPA has also received approval to convert the oil-fired San Juan plant to run on natural gas, a process that’s already underway and that the bureau affirmed in its order. 

PREPA did not respond to a request for comment on the order.

In addition to coping with an electricity grid decimated by hurricanes and more recent earthquakes, Puerto Rico is working toward a legally mandated 100 percent renewable portfolio standard. Thus far, the island of 3.2 million people reached only about 2 percent of electricity from renewables. Planning for the future is further complicated by falling electricity demand on the island, a situation potentially exacerbated by the coronavirus pandemic.

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Read More: In Blow to Natural Gas, Puerto Rico Regulators Affirm Solar-Centric Grid Overhaul

2020-08-25 13:17:00

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