At least two renewable energy firms decided not to bid on the utility’s procurement, which calls for generation equipment with a 90% capacity factor. A former chairman of the Puerto Rico Energy Bureau also comments on the plan, and shares his vision of Puerto Rico reaching 100% renewables by 2030.
May 26, 2020
As Puerto Rico’s electric utility PREPA awaits a decision from regulators on its proposed integrated resource plan, the utility has issued an RFP (request for proposals) for rental of 500 MW of “emergency temporary generation” for up to 18 months, at an estimated cost of $1.2 billion.
The generation capacity is intended to fill in for the 990 MW oil-fired Costa Sur generating plant, which was damaged by earthquakes last winter and is being rebuilt.
But 12 groups and a former regulator have raised concerns about the claimed need for temporary generation, the procurement’s effective exclusion of renewable generation, and the lack of public hearings about PREPA’s RFP.
A former chairman of Puerto Rico’s Energy Bureau, Jose Roman, said in an interview that two of his renewable energy consulting clients considered bidding on the RFP, but decided against it. The major challenge was that the RFP requires generation equipment that can operate at a 90% capacity factor for 12 months.
Roman expressed several concerns with the RFP, beginning with whether the proposed generation could be operational by the time peak summer load arrives in June. He noted that the Federal Emergency Management Agency agreed to pay for generators for three to four summer months, whereas the rental contracts would extend for 12 to 18 months. The RFP docket indicates that the Costa Sur plant will be back in operation this August, he added.
Roman would like to know whether PREPA’s RFP is premised on maintaining a 30% reserve margin. He expects the Energy Bureau will rule on an appropriate reserve margin—possibly as low as 10%—as it reviews PREPA’s proposed integrated resource plan. A lower approved reserve margin would mean less capacity is needed.
Roman also posed the question of whether 500 MW of distributed solar and storage would meet Puerto Rico’s actual immediate need, with Costa Sur now offline. Sunrun has said that the U.S. territory has hundreds of megawatts of solar potential at publicly owned buildings alone.
Asked whether PREPA might convert any temporary generating units to permanent units, Roman said “it’s not a far-fetched idea to think that,” noting that PREPA has requested approval in its proposed resource plan for mobile generating units.
Twelve citizens’ groups have filed a petition with the Energy Bureau asking to intervene on PREPA’s RFP. They called on the bureau to “halt PREPA from proceeding with the RFP, or spending any public funds,” until the bureau considers public input. They said input is needed on whether the RFP is biased against renewables, in violation of Puerto Rico law, and whether PREPA has examined all alternatives to spending $1.2 billion on temporary emergency generation.
Puerto Rico’s Independent Office of Consumer Protection has also petitioned to intervene, as has Engineering Services International.
Roman said the Energy Bureau should allow intervention on the RFP, or at least should “open public hearings for the people to come and comment.”
Other citizens’ groups have previously objected to what they described as PREPA’s issuance of unapproved RFPs.
100% renewables by 2030
Roman noted Puerto Rico’s law requiring 100% renewable generation by 2050, and said “I think that we should try to be 100% renewable by the end of this decade,” or 2030. That could include the use of biomass generation, he said, which is counted as renewable under Puerto Rico law. Puerto Rico has an interim goal of 40% renewable generation by 2025.
Roman said a key step would be educating the public. “In order for us not to invest any more capital in fossil fuel technologies, we need people to start becoming more conscious of their energy usage,” he said, while the grid needs to use demand response to reduce peak loads. His vision is to “transform our energy infrastructure with much better infrastructure for all Puerto Ricans.”
The regulatory docket is available from the Energy Bureau’s website, under docket number NEPR-AP-2020-0001.
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