US to bolster Puerto Rico's hurricane-ravaged power system with solar and storage
Department of Energy loan for over $861m will help reduce energy costs for island territory dependent on imported fuel oil and natural gas
The US Department of Energy (DoE) announced a $861.3m loan guarantee to finance construction of two standalone battery energy storage systems (BESS) and two solar projects in Puerto Rico, a move aimed at helping alleviate chronic power shortages stemming from an electric grid damaged by hurricanes.
Collectively, Project Marahu comprises 200 MW of solar PV and up to 285 MW/1.14GWh of stand-alone BESS capacity. The solar facilities will generate electricity for about 43,000 homes. The island territory’s population is about 3.2 million.
The borrower is Clean Flexible Energy, an indirect subsidiary of The AES Corporation (AES) and TotalEnergies Holdings USA, that is managed under a joint venture agreement between the two companies.
AES, based in Arlington, Virginia, is the seventh largest clean power owner in the US with 7GW of onshore wind, solar, and storage on 1 January, according to American Clean Power Association, a national trade group.
Seven years ago, Hurricane Maria, a Category 4 storm, ravaged Puerto Rico’s electrical grid. The island’s debt-laden utility, Puerto Rico Electric Power Authority (PREPA), declared bankruptcy in 2021.
Luma Energy owned by Canada’s ATCO and Houston-based Quanta Services took over grid operations in June 2021 through a public-private partnership structure with the utility retaining ownership of system assets.
In January 2023, Genera PR, a subsidiary of New Fortress Energy, was selected to operate, maintain, and decommission, where applicable, PREPA's aging electricity generating assets through a 10-year agreement.
Aided by billions of US federal dollars Luma has made progress restoring and upgrading part of the transmission and distribution system to utility-grade standards.
Puerto Rico is dependent on mainly fuel oil but also imported coal and natural gas for power generation. The territory has a 2050 target to obtain 100% of its electricity from renewable sources.
DoE’s loan guarantee will improve the grid’s resilience and “help reduce energy costs that have remained too high for too long for too many families,” while helping Puerto Rico reach its ambitious climate goals, according to US Energy Secretary Jennifer Granholm.
DoE estimates the projects will support more than 50 full-time jobs.
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