Distributed Generation: An Alternative Path for Puerto Rico’s Energy Future

October 14, 2017

Although it has been about three weeks since Hurricane Maria ravaged through Puerto Rico, nearly 90 percent of the island is still without electricity. Puerto Rico’s power company (Puerto Rico Electric Power Authority or PREPA) had no shortage of problems prior to hurricanes Irma and Maria destructive visits; PREPA was $9 billion in debt and already had issues with poor service as well as exorbitant electricity rates—rates which were as high as twice the national (mainland) average. PREPA had essentially filed for bankruptcy on July 2 of this year, as it needed at least $4 billion to refurbish power plants and attempt to reduce reliance on foreign oil. None of these estimates include any additional repairs due to hurricane damage.
The Army Corps of Engineers was put in charge of rebuilding Puerto Rico’s power grid. As Romany Webb argues in his blog post, rebuilding what Puerto had doesn’t make much sense considering what we know about climate change and the increased frequency and severity of storms like Maria. It would seem to make sense, both from a logical and a financial standpoint, to build systems which are better able to withstand these disastrous events. In particular, reducing reliance on a centralized system, which generally relies on one energy source and results in long distance transmission lines. One alternative which would increase Puerto Rico’s resistance to disastrous events is distributed generation.
Distributed generation is a model for electricity generation which uses smaller-scale technology in order to put out energy closer to the end users of the power, rather than at some central location. The multiple smaller-scale technologies allow for different types of energy sources within the same grid, including renewables.

The benefits of distributed generation include lower electricity prices, more reliable power, environmental benefits, emergency power supply, and reduced vulnerability during catastrophic events. Many of these benefits would solve a number of the issues that PREPA and its customers face.

Additionally, Puerto Ricans would benefit even before the system is in full operation. It would likely be a much faster rebuild than reconstructing their centralized system, not to mention the increased reliability of the power during the rebuild. Getting power to as much of Puerto Rico as possible, in as quick a manner as possible, is crucial—hospitals, retirement homes, the airport, and communications all rely extensively on electricity for basic operations; many residents have medications which need refrigeration. While many of these crises will likely be addressed before the large scale rebuild begins, a quicker rebuild will certainly still be beneficial.
One less timely but still important benefit would be the probable increase in renewable energy usage. In 2010, Puerto Rico’s legislature passed a renewable platform which included a renewable portfolio standard (RPS) that set specific requirements for renewable energy targets in the next few decades. For example, the RPS set a hard target of 15 percent renewable energy by 2020. However, Puerto Rico missed the 2015 target of 12 percent by about 10 percent—their renewable energy has plateaued at about 2 percent. Considering the fragile state of PREPA prior to the hurricanes, this noncompliance is probably unsurprising. However, a transition to a distributed generation model could help PREPA and Puerto Rico achieve the energy targets set by its legislature. While PREPA doesn’t have enough capital on its own to achieve this, the U.S. Congress does have the ability to fund such a project, particularly as part of the hurricane relief.
A complete overhaul and redesign of Puerto Rico’s energy system is clearly not the answer to every electricity problem that burdens the island. Completely changing the model of electricity generation is not without its own problems. For one, it requires significant funds to build a distributed generation system and disaster relief funding may not cover that, as that sort of funding is generally ear marked to rebuild exactly what is damaged (in this case, the centralized power system). Such a change would also likely require large investments into clean energy sources such as solar, wind, and geothermal. One solution to this cost could be private investment, such as Elon Musk and Tesla. While there are numerous benefits and drawbacks to someone like Musk swooping in and funding the energy system, one thing is for certain: Puerto Rico needs a solution that has longevity and durability so that the devastation of Maria is not repeated.