Puerto Rico’s Net-Zero Plans Would Raise Costs, Induce Blackouts


Puerto Rico’s Net-Zero Plans Would Raise Costs, Induce Blackouts

May 8, 2024 2 min read

Commentary By

Diana Furchtgott-Roth @DFR_Economics

Director, Center for Energy, Climate, and Environment

Miles Pollard @MilesjPollard

Policy Analyst, Economic Policy, Center for Data Analysis

A Puerto Rico Electric and Power Authority employee stands in front of high-tension electrical power lines at the Costa Sur power plant in Penuelas, Puerto Rico on January 9, 2020. RICARDO ARDUENGO / AFP / Getty Image

Key Takeaways

Wind and solar are not resilient technologies. They’re also more expensive than fossil fuels, raising electricity prices for residents.

We all know from hurricanes that hit Puerto Rico that energy resilience is vital. That’s why it’s surprising that, by law, 40% of the island’s electricity must come from renewables by 2025, 60% by 2040, and 100% by 2050.

Yet wind and solar are not resilient technologies. They’re also more expensive than fossil fuels, raising electricity prices for residents.

Moreover, these costs wouldn’t reduce warming. Even if Puerto Rico used no fossil fuels at all, starting now, this would make a difference of only 0.003 degrees Celsius in 2100, according to government models.

A recent U.S. Department of Energy-funded report proposed three paths to renewable energy by 2050. But the paths aren’t practical.

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The proposal underestimates resilience needed for renewable infrastructure against the severe hurricanes that regularly devastate Puerto Rico. The resiliency analysis does not fully address the considerable costs of reinforcing and repairing vulnerable wind turbines and solar panels.

The proposal doesn’t account for costs of overhauling Puerto Rico’s aged transmission and distribution systems, including burying power lines. Indeed, it notes that renewable penetration above 40% could seriously strain the existing transmission system, leading to blackouts.

The proposal’s transition to renewable energy would require a fundamental re-engineering of Puerto Rico's power grid. High levels of distributed solar energy would require the installation of expensive grid-forming inverters and controllable capacitators across the island's distribution network. The massive rollout’s cost may not be fully accounted for.

Proposals rely on battery-storage solutions to stabilize the grid as renewable usage increases. But in a hurricane-prone environment like Puerto Rico, battery systems would be at risk of flooding and require careful siting and hardening. Long-term performance, degradation, and replacement battery costs would drive up utility costs.

The vision of a solar-powered grid overlooks limitations of Puerto Rico's power system, which is ill-prepared for customers returning excess solar power from their panels to the grid. The report insufficiently addresses the financial, technical, and safety challenges involved in retrofitting the grid to handle two-way power flows.

The report fails to consider the financial strain on residents to adopt such a plan. The report projects that the transition pathways could lead to a substantial 53% increase in utility revenue requirements and a 75% increase in average retail electricity rates between 2020 and 2025.

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Not only would these electricity prices exceed the highest U.S. prices, but the study acknowledges that "low-income households… were particularly vulnerable to large retail rate increases.” Already nearly half of Puerto Ricans live below the poverty line, and such drastic increases in costs could deepen socioeconomic disparities.

Price increases would jeopardize commercial activities, from manufacturing to artisan work to rates at hotels and restaurants, raising unemployment rates. Public support for renewable initiatives would wither.

The Energy Department is attempting to eliminate fossil fuel use in Puerto Rico, but residents want greater industrial development and more reliable, cheaper fuels. Energy availability creates jobs and a pathway to more productive economic growth. That’s what Puerto Rico needs.

This piece originally appeared in El Nuevo Dia