2G Blog
If you run a business in Puerto Rico, you’re well aware of the benefits to living on the island. The tax incentives. The warm weather year-round. The fact that it’s a tropical getaway in the Caribbean, but that it’s still a U.S. territory, so you don’t have to worry about passports or visas.
But you do need to worry about the state of the energy grid. Despite promises of better administration once it was transferred from the government agency, Autoridad de Energía Eléctrica (AEE) to LUMA energy, private entities still can't perform magic. The grid is old, outdated, poorly maintained, and unreliable.
While you can count on it to supply power for a good portion of the time, it has become a fact of life locally that you should expect service interruptions every now and then. How did it get this bad? What alternatives do businesses have? And can combined heat and power (CHP) provide a viable alternative?
The State of Puerto Rico’s Energy Infrastructure
There are many reasons why the Puerto Rico energy infrastructure is so disastrous. Since it was first established throughout the 1940s and 1950s, it has barely received any significant maintenance. AEE (also known as PREPA, for Puerto Rico Energy Power Authority) has been immersed in scandal after scandal of bad administration, mismanagement, and questionable contracts (ask any local about government contracts in general, and you could sit for ages hearing about decades of nepotism and alleged quid pro quo transactions).
By the 2010s, power was being generated at a reduced capacity due to AEE’s financial hardships. Also, the largest power plant in the island (Palo Seco) was at risk of collapsing.
Eventually, the AEE became bankrupt. But as if such history weren’t bad enough, the majority of the island power lines are the overhead kind. And due to Puerto Rico’s location in the Caribbean, it’s exposed to annual hurricane seasons — with 2017’s Hurricane María causing the most damage (80% of the transmission and distribution network collapsed). This resulted in residents losing power for many months.
Once power was restored to most of the island, a contractor working on repairs accidentally took his bulldozer too close to a 230-kV connection at the Aguirre power plant in the southern coast of Puerto Rico. This caused an additional widespread power outage that lasted more than 24 hours.
4 Energy Alternatives in Puerto Rico
The Puerto Rico Energy Public Policy Act of 2019 establishes that the island must obtain 40% of its electricity from renewable energy sources by 2025, 60% by 2040, and 100% by 2050.
While these may sound like lofty goals for an island where most of energy is powered by petroleum, propane, and natural gas, a small portion of AEE’s electricity in 2020 came from solar photovoltaic (PV) and wind energy. These efforts are a reflection of the energy alternatives that are currently available in the island:
Photovoltaic Energy
The second largest PV facility in the Caribbean is located in the western side of the island, in the beach town of Isabela. The project came together with the collaboration between AEE and Oriana Energy, a subsidiary of Sonnedix Group, a global solar independent power producer.
The Isabela plant is the second project conducted by Sonnedix in Puerto Rico. They also worked with the local government to establish a PV plant in Salinas, on the southern coast of the island. Both projects are a substantial step in bringing clean energy to the island, while reducing dependence on the electric grid.
Wind Energy
The largest wind farm in the Caribbean is located in Santa Isabel, Puerto Rico, a coastal town in the southern part of the island. Since its inception, the farm has generated electricity to 30,000 homes, while at the same time avoiding 180,000 metric tons of CO2 emissions. And in 2012, the Santa Isabel Wind Facility reached commercial operations by installing 44 2.3 Siemens turbines.
Wind energy is one of the most cost effective sources of energy, so in addition to providing businesses with energy resiliency, it’s also a sustainable way of reducing costs and environmental pollution.
Hydro Energy
Puerto Rico has 19 hydroelectric generating units. While these could eventually be counted on to generate reliable electricity, some of them are over a century old — something the Puerto Rican government intends to address. Under the 2020 Integrated Resource Plan, AEE is researching ways to modernize the facilities and to evaluate their integrating power generation into existing waterworks.
In addition, local environmental organizations support investigating the potential to use new micro-hydro technology to create distributed facilities.
Combined Heat and Power
Combined heat and power (CHP or cogeneration) is technology that generates electricity, then harnesses the heat that emanates from this process. This captured energy can be used to create steam and thermal energy, cool spaces, and heat water.
One of its many advantages is their versatility. The systems can be fueled by biogas, hydrogen, renewable natural gas (RNG) natural gas, or propane. So businesses can power their operations with fossil fuels or greener sources of energy.
It’s an energy efficient way of powering large-scale operations, such as hospitals, grocery stores, hotels, manufacturing plants, and housing developments. The power generated by cogeneration can support business continuity during power outages and provide a continuous supply of power for critical functions.
Benefits of CHP Technology for Businesses in Puerto Rico
There are several advantages of using cogeneration systems to power large-scale operations:
Energy Resiliency
Since CHP generates its own energy, operations become less dependent on the island’s power grid. As noted above, the power created by combined heat and power supports business continuity when power outages occur.
Lower Energy Costs
CHP reduces the need for traditional fossil fuels by capturing heat that would otherwise be wasted. This reduces energy consumption, resulting in significantly lower energy costs.
This alone should be a compelling enough reason to rely on CHP, since energy costs in Puerto Rico are among the highest in the United States. In fact, in 2019, the average price for electricity was higher than in most of the U.S.
Energy Efficiency
CHP technologies generate electricity simultaneously with capturing heat and using it to create thermal energy. Therefore, not only does it require less energy to power operations, it does so more efficiently.
How CHP Systems Keep Operations Running
Depending on the business’ needs, combined heat and power systems can be pre-packaged in their own housing unit, or they can be installed within a building or complex. CHP can also be installed singularly or they can be interconnected to produce larger amounts of energy.
Options range from small power plants with an electrical output of up to 60kW to larger ones for high power consumption above 500kW.
While they can work in conjunction with the energy grid, they can be configured to support operations during disruptions of power, since they can continue generating electricity from captured heat. Before deciding on a specific system, businesses should conduct an energy audit to determine their power requirements, then use that information to decide on which CHP options would be most beneficial.
2G Energy’s CHP Systems Support Your Energy Needs
2G Energy offers a wide array of CHP solutions that provide from 50 kW to 2,500kW. We also have an extensive portfolio of successful CHP projects in the U.S., Canada, and Europe, and have installed over 7,500 systems worldwide — and we are ready to assist you with your Puerto Rico projects.
Contact us to learn more about how CHP can transform your operations and significantly reduce your energy costs.
