In 2019, after an open adjudicative process with broad citizen participation, the Energy Bureau approved the Integrated Resource Plan (IRP). This public policy document has the force of law and obligates the government to an orderly process of transition to renewable energy sources.
When the IRP was being evaluated, the Puerto Rico Electric Power Authority recognized that units 7 through 10 in San Juan would require economically unfeasible capital investments in order to be in compliance with environmental standards and in acceptable operational condition.
Even so, the Authority has insisted, for the past year, on converting the San Juan units to natural gas without requesting an amendment to the IRP. In its most recent filing with the Bureau, the Authority has requested the reallocation of federal funds for these conversions, without explaining how, in its most recent filing with the Bureau, the Authority has requested the reallocation of federal funds for these conversions. these conversions, without explaining how at the present time – with inflation at historically high levels – these expenditures are feasible and advisable.
It should be noted that the IRP allows for the possibility of designing and constructing a new natural gas plant, with more modern and efficient technology. technology, as part of this orderly transition to a 100% natural gas supply authority. an Authority that supplies 100% of its energy from renewable sources by 2050. The money that the The money the Authority is interested in reallocating was originally earmarked for the development of such a plant but delays in its design have plant, but delays in its design have increased construction costs, which PREPA claims as a justification for the change. The money the Authority wants to reallocate was originally intended for the development of the plant, but delays in its design have increased construction costs, which PREPA claims as justification for the change in the use of funds.
Incidentally, it is worth noting that the Authority’s delays in other areas, for example, in the contracting of solar panel projects, the contracting of solar panel projects that are part of the first phase of this transition (Tranche 1), also phase of the transition (Tranche 1), have also cost consumers. According to estimates by the Energy Bureau’s consulting firm, Synapse Energy, which has expertise in researching and advising on energy and advice on energy systems and their economic models, the delay of just over a year in the development of these year delay in the development of these projects has already implied close to $89 million in additional costs when compared to the average
when comparing the average cost of solar power to the cost of operating the Authority’s most expensive plants. cost of operating the Authority’s most expensive plants. According to their projections, another six months of delay could cost us an additional $44 million. could cost us an additional $44 million.
On the other hand, since 2019, the price of natural gas has more than doubled. According to a study by Energy Ventures Analysis, the factors affecting this increase are diverse.
Some could be of a temporary nature – the pandemic and the war in Ukraine – others of a more permanent nature – structural changes in European markets to reduce their dependence on Russian energy sources. The bottom line is the same: natural gas fluctuates as much as other fossil fuels for as much as other fossil fuels by variables beyond our immediate control.
Thus, tying much of the state’s generation to natural gas is substituting one addiction for another. Natural gas can and should be part of the fuel mix to which the Authority has access in its economic dispatch design, but its use should be with the highest efficiency technology. Otherwise, to continue betting on a multiplicity of old plants throughout Puerto Rico is to do the same thing that has brought us to this point. It is to force the merchant and the resident to open the electric bill dismayed by the surprise that the latest fluctuation in the international markets will bring. It is tying us to systems that were not designed to burn natural gas cleanly and will therefore continue to pollute our air.
The path is laid out for the transformation of the electricity system. All that is missing is the urgency to walk together into the future.