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By PETER FOX-PENNER
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% 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% 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 of about 22 cents per kilowatt hour, among the highest in the U.S. The island has several photovoltaic (solar electric) farms but gets about 46% of its power from oil and only about 3% from solar.
At the center of all this is PREPA and its outsized role in Puerto Rico. With $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.
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.
However, these systems cost tens of thousands of dollars, and there is currently no substantial way to pay for them other than the kindness of strangers. Three-and-a-half million people would need perhaps 350,000 of these systems — at a price tag in the billions — to provide only a fraction of most families’ power needs.
Even if costs were not a consideration, these distributed systems aren’t a substitute for the grid. Many people think that microgrids don’t need poles and wires, but if they serve more than one building they use pretty much the same grid as we use today.
Once the grid is rebuilt, the new grid-independent systems should then become part of a series of new community microgrids, or networks of multiple solar panel installations backed up by storage. These interconnected systems would be able to “island” together to keep the whole community running at partial if not complete levels of service. With the necessary planning and approvals, new community power organizations could be set up — perhaps separate from PREPA — to finance the conversion of local grids to a more resilient form.
So there is a path from the current grid to one that is far cleaner and more resilient, but it’s not simple or quick. It would require melding complete and rapid restoration of power with a major infusion of capital.
Changing the base of generation from PREPA’s aging, inefficient fleet to clean sources is an essential part of this path. However, even at an extremely fast pace, it takes months to plan the economics, financing, and engineering of this transition. More commonly, it takes years and careful economic and financial planning to raise the billions of dollars of capital needed and then spend it wisely.
A sustainable, resilient path forward
Puerto Rico’s citizens have endured great hardship and tragedy. We as a society certainly owe it to them to do whatever we can to lessen the damage from the next hurricane and speed power restoration. However, the path to a sustainable and resilient grid for the island is not as simple as air-dropping solar panels and other equipment onto the island and assuming all will be well. The suggestion that restoring power by replanting the current poles and wires will foreclose a more distributed solution isn’t correct, nor is it the most equitable way to restore power to everyone as quickly as possible.
This isn’t to say that the installation of fully independent solar systems and microgrids should be discouraged in any way. With the important provision that the hardware is maintained properly, the more solar and storage we can get onto the island sooner the better.
At this point, Puerto Rico’s grid is being rebuilt essentially as it was before.
But even as the grid is rebuilt as quickly as possible, the planning and engineering should begin on how to migrate the grid to smaller sections that self-island. This must include all the main aspects of power system development and operation, including financing, ownership, operation, and maintenance of the systems.
The only logical way for Puerto Rico — and every other storm-prone electric system — to become a series of resilient and clean microgrids is to first get the entire grid functioning and then to create sections that can separate themselves and operate independently when trouble hits.
Dr. Fox-Penner is the director of the Institute for Sustainable Energy, and Professor of Practice, Questrom School of Business, Boston University. The author thanks Scott Sklar, Phil Hanser, Sameer Reddy, Thomas McAndrew and Jennie Hatch for input. All errors are his own. This post originally appeared at The Conversation.
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11 Comments
“We as a society certainly owe it to them” nothing
“We as a society certainly owe it to them” nothing but defense form foreign invasion and occupation.
While the people of Puerto Rico are US citizens, what they are not, is US tax payers. From here it looks like the free loading people of Puerto have a taste for champagne and the budget for unfiltered swamp water. The billions of dollars and tax credits US tax payers have lavished on this island have done nothing but raze demands for more free money. `
I say it is time wean this baby. The tit should go dry. Become the 51 state and welcome to the tax rolls or put on put on your big boy pants and enjoy your independence.
Walta
Puerto Rico Pays Taxes and Already Voted Twice for Statehood
Puerto Rico pays business, payroll (Social Security, Medicare), and estate taxes to the federal government which add literally billions of dollars to the federal government every year.
Not only that but their biggest industry keeps America and the rest of the world healthy AND pays 3 billion in taxes alone. Via NYT:
"Federal officials and major drugmakers are scrambling to prevent national shortages of critical drugs for treating cancer, diabetes and heart disease, as well as medical devices and supplies, that are manufactured at 80 plants in hurricane-ravaged Puerto Rico.
Pharmaceuticals and medical devices are the island’s leading exports, and Puerto Rico has become one of the world’s biggest centers for pharmaceutical manufacturing. Its factories make 13 of the world’s top-selling brand-name drugs, from Humira, the rheumatoid arthritis treatment, to Xarelto, a blood thinner used to prevent stroke, according to a report released last year.
With business of nearly $15 billion a year at stake in Puerto Rico, drug companies and device makers are confronting a range of obstacles on the island: locating enough diesel fuel for generators to run their factories; helping their employees get to work from areas where roads are damaged and blocked, electricity is down and phones don’t work. Companies have taken out radio ads pleading with workers to check in. The pharmaceutical and device industries contribute to the employment of nearly 100,000 people on the island, according to trade groups.
“Some of these products are critical to Americans,” Scott Gottlieb, the commissioner of the Food and Drug Administration, told a congressional panel this week. “A loss of access could have significant public health consequences.”
Dr. Gottlieb, who visited F.D.A. staff in Puerto Rico last week, told the House Energy and Commerce Committee’s subcommittee on Health: “We have a list of about 40 drugs that we’re very concerned about. It reflects maybe about 10 firms.” "
And Puerto Ricans voted for statehood in both 2012 and 2017 but Congress ignored both votes.
We responded far more quickly and better to the completely unexpected earthquake in Haiti than a hurricane we knew far ahead of time was coming. Such a federal response embarrassing and ruining America.
Response to Walter Ahlgrim
Walter,
I suspect my comments won't affect your stance on this issue. But to any GBA readers who are attracted to the Ahlgrim argument, I'd like to pose this question: Since when did our disaster relief efforts hinge on the level of taxes paid by the Americans we are helping? When disaster strikes, we respond with help -- to poor rural communities as well as fancy suburbs. At least that was the case the last time I looked into the issue.
In your town, like mine, the fire department responds to all fires -- whether the burning house is a hovel or a mansion.
I certainly wouldn't want to live in a society that performed tax calculations before deciding whether to help communities devastated by a hurricane.
And if you have any interest in history, you might read up on the history of Puerto Rico. I can assure you that you won't find any historians who agree with your assessment that "the free-loading people of Puerto have a taste for champagne."
Peurto Rico
@JM, Individuals do not pay federal income tax. Perhaps that was what Walter was alluding to.
@Martin, Agree, however strings must be attached to because the ruling families ruined that island and have some responsibility for the situation they find themselves in. After all you wouldn't want to pay to rebuild a house that sits in a 10 yr flood plain just because the people have "always lived there". You'd want to move the people.
On a side note the island is about the size of Connecticut just to give an people an idea with regards to scope.
Shared but limited power
Shared but limited power creates some difficult tragedy-of-the-commons problems. So I suspect that the practical size for such micro-grids is a single building.
For resilience to hurricanes, I expect that generators and underground lines are far better than solar panels and batteries.
Second Paragraph
I'm not sure just why the author included the second paragraph; perhaps an unnecessary political comment. Before you can rebuild, you need to destruct. All that wire on the ground as well as the poles need to be cleaned up and roads need to be repaired ahead of the construction crews. The author does not speak to (and I am clueless) how solar panels would survive a hurricane. There is a short term solution and a long term solution. Short term means putting the sticks back up and hang new wire. Long term is not solar or wind connected to hanging wire but conventional generation and underground distribution. Further to that is the development of natural gas tank farms that can be built to survive a Class 5 hurricane with distribution, again, buried so hospitals can have generators that will have fuel to run. I have looked at solar panels for my house. They don't make good sense: They are easily damaged by flying debris and pose an untenable problem when I need to replace my roof. And I have no place for the battery banks that would be needed. The real solution is to make houses smaller and more energy efficient. I have done that. Now I need to make my house more resistant to high winds. When replacing houses, Puerto Rico needs to revise their building codes and codes for land use. And, of course, if you live in an area routinely subject to hurricanes you need to keep a supply of bottled water and food.
Response to JM
Business taxes, are subsides compared to any state.
Payroll “Taxes” (Social Security, Medicare) Are Ponzi scheme program where on average each participant will receive more in benefits than they pay in to the program leaving the US tax payer holding the bag.
Estate taxes, get real how many people die with 10 million dollars anyone with less is exempt
Puerto Rico’s Pharmaceutical and medical device industry are a gift from the US tax payer the only reason it for them to operate from Puerto Rico is the enormous tax subsidies provided by the US tax payers.
I say it is time to end the subsidies. The wrongheaded subsidies have pointlessly concentrated the industry in a small geographic region endangering the health of the world.
As I recall Puerto Rico has never had a legally binding vote for statehood. What votes they have held failed to provide a substantial mandate.
From here the people of Puerto Rico seem ungrateful unlike the Haitian people. The federal response might be embarrassing if we were talking about a state. Since Puerto Rico is not American property the US tax payers should not be spending its money there.
What is being ruined is Puerto Rico people’s opinion of America as they cannot understand why the US will not send them more money for nothing in return. It is time wean this baby.
Walta
Response to Martin Holladay
Martin you may find this article interesting.
http://www.nbcnews.com/id/39516346/ns/us_news-life/t/no-pay-no-spray-firefighters-let-home-burn/#.WiiKEVWnGUk
Yes the hovel and the mansion receive the same level of service but they both pay equally based on their properties value.
Rebuilding the electric grid is not hurricane relief.
When a hurricane takes out the power grid in Florida or Texas the government does not fix the grid. The local utilities have insurance paid for by rate payers to cover the cost of repairs and mutual aid agreements pulling personnel and equipment for thousands of miles away. Clearly Puerto Rico choose to self insure. Now Puerto Rico is demanding the US tax payer provide them with a bigger and better grid for free.
Walta
@Walter, Haiti is problematic as well. The US
singlehandedly obliterated local rice production on the island. Haitian farmers could no longer sell rice because the US Govt was giving it away for free.
Diversity is key
The challenges in Puerto Rico are very real, and they're going to be increasingly common as the earth's climate continues to change. It's highly unlikely that 2017 was a 'one-off', especially given what's already happened in Japan, Thailand, Chile, Haiti, New Orleans, Florida, New York, Texas, Puerto Rico.... The title of the article is that micro-grids are not a cure-all, and they're not, but they can and likely must be an integrated part of a larger solution. Tesla, Tabuchi Electric and others have been donating solar panels, battery storage and more to Puerto Rico. The Rodenberry Foundation is donating solar-powered water purification systems. A solar farm in Puerto Rico has already proven to be able to withstand a hurricane (if built with that in mind).
Rather than engaging in empty political conversations about rights/needs, etc. consider that every installation, every new idea moves us all forward, and that we're going to need more resilient power structures, better building systems, improved grid and micro-grid networks, and a whole lot more. We all share one planet, and it IS changing. This is worth reading on the subject: https://spectrum.ieee.org/energywise/energy/the-smarter-grid/plans-emerge-to-rebuild-puerto-ricos-grid
The real question will become, "Can rebuild faster than the damage can occur?" And that's going to take all of us.
Mike.
Heading for the exits?
A few MORE months without power does a lot to drive markets:
https://www.greentechmedia.com/articles/read/grid-defection-on-the-rise-in-puerto-rico#gs.3w=_eow
Microgrids may not be the cure-all for Puerto Rico, but it's evolving into one of the go-to cure-SOME, for those with the credit to buy it. Cutting the umbilicus to the grid starts to look like a viable proposition when the grid has been stone-cold dead for that long, with no clear resolution to the utility operator's financial crises in sight. Having control over your own power gives you better control over your destiny, and in some instances off grid power in Puerto Rico is even cheaper than than what the utility has been offering.
There has to be some incentive for those grid defectors to hook back up, and if enough people bail, the cost per ratepayer of repairing & maintaining the grid will go up. This could become a very serious problem there going forward, if the ratepayer base dwindles to the point where the grid repairs can't be financed.
http://abcnews.go.com/International/wireStory/puerto-rico-seeks-300m-warns-power-company-shutdown-53141201
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