The most significant threats to Puerto Rico’s energy grid are not tropical storms, hurricanes, or earthquakes—but rather decades of mismanagement and the Island’s unrealistic renewable energy goals for 2025.
With the Biden Administration making aggressive renewable environmental policy changes, the Island can expect more pressure from the federal government for renewable energy in Puerto Rico.
It is easy to assume that a broken Puerto Rico grid results from a series of natural disasters, but as we have learned in Florida, electrical grids and power generation facilities can be reliable and cost-competitive. So why is Puerto Rico’s grid different?
Governor Vazquez Garced took the first step in liberating the grid from bureaucracy’s wickets with the historic LUMA deal. By the end of 2021, LUMA, a private company, will operate, manage, and transform the grid’s Transmission and Distribution system.
Removing customer service from the claws of government and placing it in the private sector promises to prioritize customer service and reliability.
New leadership at the Puerto Rico Electric Power Authority plans to expand private-public partnerships to manage older diesel or bunker fuel-powered generation units. These legacy units serve a critical role in the grid’s reliability—without them, there is no manufacturing industry in Puerto Rico. However, they need to be replaced with higher efficiency combined-cycle natural gas units that are closer to demand, have a suitable amount of LNG storage, and port access.
Private-public partnerships will fix some of the institutional problems caused by decades of mismanagement, poor customer service, and government bureaucracy. But Puerto Rico must learn from our friends in Florida and prioritize reliability.
Puerto Rico has an ambitious goal of 3,500 megawatts of renewables by 2025. That is enough energy to power the entire island on a sunny and windy day. But when the sun goes down and the wind stops blowing, people tend to return home from work, creating a peak in demand: AC units ramp up, lights turn on, and families gather around the television. Energy storage technology is decades away from being practical and cost-competitive.
Current renewable energy goals place the island on track to become the next California — a Green New Deal state begging residents to turn off their AC units because politicians grossly miscalculated load requirements.
Florida Power and Light and NextEra holds the title of the largest private producer of renewable energy globally, and Texas leads the U.S. in wind energy. They both achieved these benchmarks by mastering reliability and cost competitiveness and only then moving towards a realistic renewable energy goal. It can take Florida less than one week—sometimes even a few days—to recover from a category five hurricane. In Puerto Rico, it can take more than 11 months. That’s unacceptable.
Florida Power and Light’s new Dania Beach natural gas power plant has the potential to power almost half of the island of Puerto Rico. Meanwhile, three years after Hurricane Maria, Palo Seco—a facility with the capacity to power the metropolitan area of San Juan—has yet to break ground and is waiting for Puerto Rico Energy Bureau (PREB) approval. Instead, PREB approved a “study” and suggested retiring the remaining natural gas power plants in San Juan.
Renewable energy over-prioritization has neglected a handful of energy projects that promise to reduce cost, increase reliability, and improve America’s energy dominance in the region.
While Admiral Brown, Dr. Peter Navarro, and I worked to reshore manufacturing and pharmaceutical production to Puerto Rico and the United States, Puerto Rico’s legislature has compromised the grid and placed the burden of energy reliability on local industry. The Biden administration’s energy public policy only makes matters worse by threatening thousands of manufacturing and pharmaceutical jobs on the island.
Puerto Rican companies pay more than three times the energy costs as their mainland or foreign competitors. While touring dozens of manufacturing and pharmaceutical plants in Puerto Rico on behalf of the White House, I have witnessed the energy burdens they face. Most facilities rely on privately-owned natural gas or diesel generation units due to energy reliability, quality, and cost concerns.
The manufacturing and pharmaceutical sector in Puerto Rico will not survive a California energy trajectory—gambling billions of taxpayer dollars on a Green New Deal pipe dream, only to find a less reliable and more expensive grid 15 years down the line.
These pressures go directly against manufacturing interests on the island. It is time for Puerto Rico to adopt an “All of the Above” energy strategy and to unleash the power and reliability of natural gas, energy diversity, and small modular nuclear reactors. It is time for clean, cost-competitive, and reliable energy for the people of Puerto Rico.