Why solar ‘microgrids’ are not a cure-all for Puerto Rico’s power woes

In addition to its many other devastating human consequences, Hurricane Maria left the island of Puerto Rico with its power grid in ruins. Power was knocked out throughout the island, with an estimated 80 percent of its transmission and distribution wires incapacitated. When hospitals and other critical users could not get backup power and water supplies ran low, an extended outage became a humanitarian crisis that has yet to be resolved.

This shameful outcome should have been avoided with strong, swift federal leadership. Yet more than five weeks after the storm, only about 40 percent of the grid has been rebuilt, and service remains unreliable even where power is restored.

As the recovery process inches its way forward, the questions many are asking go like this: Why are we rebuilding the grid to be the same as it was before the storm? Can’t we use this as an opportunity to create a more modern, resilient, renewable power system? Isn’t this the perfect opportunity for an upgrade?

The answer to these questions, from my perspective having worked with and researched the power industry for four decades, has little to do with technologies and everything to do with some nearly insurmountable financial and governance challenges. There is a path forward, but it will not be easy.

The power system before Maria

Prior to Maria, Puerto Rico had one of the largest public power authorities in the U.S., known as PREPA, serving a population of 3.4 million people from 31 power plants, 293 substations and 32,000 miles of wire. Almost half its generation was from old, very expensive oil-fired plants, resulting in prices about 22 cents per kilowatt hour, among the highest in the U.S. The island has several solar photovoltaic farms but gets about 46 percent of its power from oil and only about 3 percent from solar.

At the center of all this is PREPA and its outsized role in Puerto Rico. With US$9 billion of debt, PREPA has been part of the contentious refinancing process that ultimately required congressional action. PREPA is also the largest employer on the island, with strong connections to the island’s leadership, so proposals perceived to adversely impact PREPA can be difficult to enact. Recently the island has established a new energy commission called PREC with oversight over PREPA’s plans, spending and rates.

Hurricane Maria knocked out long-distance transmission lines that transmit power from more remote parts of the island in addition to local utility poles. AP Photo/Gerald Herbert
The PREC’s efforts at reform underscore the enormous challenges the utility faces. In September 2016 the PREC issued an order directing PREPA to convert some of its oil plants to gas, renegotiate some high-priced renewables contracts and purchase more renewable energy.

In April 2017 PREPA issued a new financial plan with starkly grim prospects: a $4 billion maintenance backlog, the loss of fully one-quarter of its sales in the next 10 years, and continued red ink as far as the eye can see. Meanwhile, renewable power developers who have tried to build plants on the island have encountered great difficulties, as chronicled in this blog post.

Then, just before Maria, PREPA declared bankruptcy. Maria therefore destroyed the grid of a system that was already bankrupt, having trouble maintaining its service and paying its bills, resistant to renewable interconnections, and politically difficult to reform.

Proposals for rebuilding with microgrids

The challenge, then, is to 1) restore energy access as quickly as possible; 2) begin to build a long-term resilient and operable grid; and 3) reform a broken regulatory system. In the wake of the storm, clean energy experts and businesses saw this as the perfect opportunity to start over.

“Puerto Rico will lead the way for the new generation of clean energy infrastructure,” one solar CEO asserted, “and the world will follow.” Elon Musk also famously tweeted an offer to solve the island’s energy problems with Tesla solar systems and batteries.

With an array of solar panels and batteries, a group of buildings, such as a hospital, or a neighborhood can power itself and operate independently in the case of an outage with the central grid – called “islanding” in industry parlance.

Provided they can be paid for and operated safely, quickly setting up these solar microgrid systems is an excellent measure that is both stopgap and long-term contributor. These systems can be set up in a matter of days, providing enough power to help neighborhoods with critical power needs, such as cellphone charging, powering cash machines and providing electricity service for health care and first responders.