The blackout debacle the country has experienced these past few days has made many dream of a governor that places a “For Sale” sign on the Puerto Rico Electric Power Authority (PREPA,) hoping somebody will buy it, blackouts will cease, phones will be answered quickly, and above all, that the bill will stop squeezing people dry.
It won’t be that easy.
Firstly, PREPA, whose value has been estimated at $4 billion, has a $9-billion debt. This is why a classic privatization transaction, where the agency would be sold to a private enterprise, would leave the government with a bill of close to $5 billion.
Secondly, PREPA is so deteriorated and would need an investment of such magnitude to modernize it, that nobody believes there would be interested parties to spare.
“It has taken 50 years to do this and it will take another 50 to fix it. This will not be fixed in a year or two, or in five, or ten,” claimed Luis Aníbal Avilés who, as president of the PREPA Governing Board from 2005 to 2009, weighed the possibility of selling it in New York.
How can the country climb out of the hole it is in then? This hole that, to a great extent, was dug by a costly and obsolete agency that can create a days-long blackout after a single fire in one of its plants?
Experts said that the future can be seen just by peering out the window on most Puerto Rican days, going for a walk along our countryside or swimming in the beaches that surround our island.
That, they say, is where our fuel is. It’s in the sun, the wind, and the sea; endless resources that nature gave the island. Other places where these resources are not as available as they are here are using them to produce significant amounts of clean, affordable, and efficient energy.
Despite some efforts, there has been great resistance towards renewable energy in the country. However, the economic crisis and the ever-growing certainty that the PREPA, in its current state, is not sustainable and cannot be renewed, is opening up a more detailed discussion about the opportunities and challenges of renewable energy.
“It’s the best and only option. The other option is a slow transition to other fossil fuels, which is also doomed to fail because the global tendency is moving towards eliminating all fossil fuels,” stated engineer Rogelio Figueroa, who ran for governor twice with environmental platforms, and who now owns a consulting firm on energy matters in California.
Renewable energy is not an exotic theory. It is a reality in places such as Germany, the fourth largest economy in the world, which generates 26% of its energy from renewable resources, although it has reached 90% at times. It is also a reality in Texas and California, which have had to deal with having excess energy due to the power generation of their windmills and solar panels.
Experts believe Puerto Rico has the potential to dramatically increase its electricity production through solar energy. Along the way, PREPA would end the monopoly on production and distribution it has now, so as to become a facilitating agency for individuals, communities, and businesses to produce their own electricity with renewable energy.
Efraín O’Neill, a professor at the Mayagüez Campus of the University of Puerto Rico (RUM, by its Spanish acronym), believes that as more private entities begin generating their own energy, PREPA could keep a minimal infrastructure to lend support at times when solar energy cannot keep up with the demand.
“Puerto Rico has a great amount of renewable resources, especially the sun. We should steer away from big fossil fuel plants as soon as possible,” stated O’Neill.
As more independent entities generate their own energy, the system becomes less centralized and what we have been through these past few days will be less likely to ensue. The country would not be without power because a single plant failed.
There are still enormous technical and economic challenges that make it impossible to imagine Puerto Rico could become the mecca for renewable energy overnight.
The technology for solar energy storage is still very expensive. Besides, acquiring solar energy systems is not an option for the disadvantaged, a particular problem here, since 45% of the population lives below poverty line.
Nevertheless, experts say that as these technologies expand, prices will fall. O’Neill, for example, claims that the cost of powering a residence with photovoltaic panels costs a third of what it did ten years ago.
“I can safely say that in the next ten years we will have affordable storage systems,” said O’Neill.
Puerto Rico, which currently produces barely 2% of its energy with renewable resources, already has the legal framework that would enable the spread of this technology. The Energy Reform Act passed during this administration, for example, would force PREPA to produce energy from renewable resources.
Furthermore, the Energy Diversification Act was approved in August. It forces the Energy Commission to create a favorable public policy to make establishing “solar powered communities” and “microgrids” a viable option.
Both concepts refer to renewable energy systems that serve and are administered by specific communities.
The author of this legislation, Senator Ramón Luis Nieves, indicated that, for example, a community with its own funding or the bank’s, could set up photovoltaic panels on a vacant lot for the residents’ use.
The road is long and, for the time being, very expensive. Nonetheless, the other option—investing hundreds of millions of dollars in an attempt to modernize the PREPA—is not a sensible alternative either, experts say.
“Insisting that big fossilfuel plants continue to dominate in the medium to long-term future is a disservice to the country,” insisted Professor O’Neill.
Three things we should consider...
PROMESA and PREPA
PROMESA, the Act of Congress that established an Oversight Board to control the Puerto Rican government’s fiscal matters, states that all future electric energy production projects on the island must be private.
Some of those who study the subject fear that this means big fossil fuel plants will be approved.
Luis Aníbal Avilés, former president of the PREPA Governing Board, explained that the language of the law lends itself to the approval of big fossil fuel plants that would tie the country to those technologies for decades.
Act No. 57 of the energy reform pushed by Senators Eduardo Bhatia and Ramón Luis Nieves during this four-year term states that PREPA must prove it can produce energy in a “highly efficient” manner.
Senator Nieves explains that “highly efficient” refers to energy obtained from renewable resources such as the sun, wind, and water.
The law proposes that if PREPA is not in financial or technical conditions to produce “highly efficient” energy, it will have to give way to private projects regulated by these technologies that are already successfully used in many countries around the world.
The Paris Climate Agreement, signed in 2015 in the United Nations Framework Convention on Climate Change, forces the most industrialized countries to finance projects for small countries that wish to rid themselves of highly polluting fossil fuels to generate energy.
Rogelio Figueroa, expert on energy issues, believes Puerto Rico may benefit from these financing plans if it decides to bet on renewable energy.
However, the question arises on whether Puerto Rico—which is a territory of the United States—could be considered a “country” for those purposes.