from Energy, Security, and Climate

Repowering Puerto Rico with Solar a Worthwhile Goal, But Harder Than It Sounds

Tesla installed solar panels and battery storage to power San Juan's Hospital del Niño (Children's Hospital) in what it calls "the first of many solar+battery Tesla projects going live in Puerto Rico." Tesla

In the wake of Hurricane Maria, there is an opportunity for Puerto Rico to reconstruct its energy infrastructure to be more resilient and efficient. However, if short-term rebuilding is prioritized over long-term restructuring, this critical window will be missed.

October 26, 2017

Tesla installed solar panels and battery storage to power San Juan's Hospital del Niño (Children's Hospital) in what it calls "the first of many solar+battery Tesla projects going live in Puerto Rico." Tesla
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Madison Freeman is the research associate for energy and U.S. foreign policy at the Council on Foreign Relations. 

Hurricane Maria wrought tremendous destruction on Puerto Rico in late September, knocking out the electricity grid, water access, and communications. More than a month out, still only about 26 percent of residents have power, and the grid is not expected to return to full operational capacity for months—maybe years. The devastation could offer an opportunity to rebuild the grid to be more resilient, taking advantage of newly cheap solar power. But doing so will require farsighted reforms on top of short-term relief measures.

Before Maria, a Poorly Conceived Power System

Even before the hurricane, Puerto Rico’s electricity infrastructure was deeply flawed. Like many islands, Puerto Rico relied heavily on inefficient oil-fired power generation, alongside natural gas and coal, all of which were brought in by ship. This made generation costs extremely high, leaving customers with the second-highest electricity prices in the nation, behind Hawaii.

Additionally, the structure of the electricity grid made little sense to serve the population’s power needs. The territory’s 3.4 million residents live largely in a ring along the coastline, but the grid is centralized, with high-voltage transmission lines crisscrossing the mountainous and heavily forested interior. Though the population is concentrated most heavily around San Juan, on the north side of the island, the largest power plants are located on the southern coast, leaving most of the island dependent on north-south transmission lines. Now that Maria has destroyed those lines, repairing them is arduous because of the challenging terrain and damaged roads.

Finally, the poor fit between Puerto Rico’s power system and the island’s energy needs is exacerbated by the enfeebled utility, the Puerto Rico Electric Power Authority (PREPA). Crippled by debt and chronically mismanaged, PREPA’s negligence set the stage for disaster. Its failure to conduct adequate maintenance of the grid left the transmission system “increasingly brittle,” according to a scathing report issued earlier this year by the Puerto Rico Energy Commission, which cited unsafe conditions, insufficient tree trimmings, and outmoded equipment.

A Rush to Solar

In the aftermath of Hurricane Maria, clean energy advocates have been vocal about how solar power could solve Puerto Rico’s power woes. They are certainly onto something. Rather than rebuild the illogically designed grid of the past, Puerto Rico would be much better served by a more decentralized system that would bring down generation and transmission costs, protect the grid against severe weather, and allow communities to bring power back online much more rapidly following a disaster.

Such a decentralized system might take the form of “microgrids”—local, self-reliant networks that distribute electricity to a community—that are powered in large part by distributed solar installations. These solar installations would have a capacity of a megawatt or more—large enough to take advantage of economies of scale but small enough to be located near the communities they serve to avoid having to build transmission lines. Battery banks and small natural gas generators would compensate for the intermittency of solar power, and neighboring microgrids might also link up with one another to trade power and further smooth out imbalances in power supply and demand.

To date, solar energy has barely figured in Puerto Rico’s energy mix. The Worldwatch Institute has highlighted that most Caribbean islands have chronically underutilized their “tremendous” renewable energy endowments. Though Puerto Rico has massive solar potential, only about 2 percent of the island’s electricity came from renewable sources in 2016.

Recognizing the opportunity, numerous proposals for bringing solar to Puerto Rico have emerged. Many of them aim to address some of the immediate needs following the hurricane, such as increasing the ability of hospitals to function, bringing communications systems online, and enabling relief workers to distribute clean water and food. In the near term, solar panels in conjunction with batteries could provide power for emergency relief centers and supplement scarce diesel generators for hospitals and other critical buildings, such as grocery stores and pharmacies.

Some of these efforts are already underway. The Solar Energy Industries Association (SEIA) has been coordinating industry efforts to deliver solar panels to the island. German energy storage company Sonnen announced its plan to set up fifteen microgrid systems to provide power to emergency relief centers, connected to solar panels provided by its Puerto Rican partner, solar company Pura Energia. Sunrun, the nation’s largest dedicated residential solar company, partnered with nonprofit groups to install solar panels and storage to power a fire station in San Juan, restoring communications for the first responders, which it plans to repeat across the city. Tesla converted the parking lot of a children’s hospital into a solar array, helping to provide critical medical care to some of the island’s most vulnerable residents.

Playing the Long Game

While these near-term relief efforts are commendable, Puerto Rico will need to take on the tremendous task of rebuilding its electricity grid from rubble, and it should use this opportunity to shift toward a decentralized power system. The island will need to spend massive amounts of money to repair the grid—on the order of $5 billion—and because Puerto Rico’s fossil fuel power plants weathered the storm with minimal damage, it may be tempting to rebuild transmission lines to bring these back online. However, this would leave the island vulnerable to repeating the same crisis it faces today. Elon Musk has said as much, proposing instead to rebuild Puerto Rico’s grid with solar, battery storage, and microgrids.

Achieving this decentralized future will require serious reforms to the utility, PREPA, as well as the regulations that govern it. Privatizing PREPA, a topic under discussion even before Maria, is a good place to start, given the utility’s problems of corruption, mismanagement, and fiscal irresponsibility, which led to its declaration of bankruptcy earlier this year. Its capability has been further called into question over its decision to award a small and relatively unknown Montana company a $300 million contract to help repair transmission lines, rather than calling on other utility companies through the American Public Power Association, standard practice following natural disasters. This has brought several senators to call for investigations into the contract, and the Puerto Rican government to launch an audit. In its current state, PREPA is neither equipped for nor responsible enough to handle rebuilding and modernizing the grid.

In addition, the regulations that govern a privatized PREPA should ensure that the utility considers all options on a level playing field rather than assuming it ought to rebuild a failed model of the grid. Puerto Rico’s regulators can learn from their counterparts in states like New York, where experiments are under way to build “non-wires alternatives” that are cheaper than conventional, centralized infrastructure. New York has pioneered a framework for comparing the costs and benefits of decentralized microgrids with centralized investments in power lines and substations, which Puerto Rico should adopt.

The U.S. federal government can help ensure that Puerto Rico makes farsighted reforms. The period immediately following a disaster like Maria is critical in shaping what the grid will look like for generations, and by earmarking funds for improvements, rather than replacements, of critical infrastructure, federal aid can help push for modernization. What’s more, federal relief agencies should work with Puerto Rico on crafting a long-term strategy for building an improved power system. Unfortunately, the Trump administration has repeatedly indicated that it is uninterested in funding improvements on the island. It should be alarming to observers that José E. Sánchez, a director with the Army Corps of Engineers and the head of the task force to restore power on the island, told the New York Times that “we are there to repair-replace, but not to augment.”

In the wake of this disaster, there is a window of opportunity for Puerto Rico to reconstruct its energy infrastructure to be more resilient, thoughtful, and efficient. However, if short-term rebuilding is prioritized over long-term restructuring, this critical window will be missed.

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