WASHINGTON/LOS ANGELES: Hurricane Maria destroyed Puerto Rico’s antiquated and bankrupt electrical system, leaving millions in the dark and utility crews scrambling to help.
Now some politicians and renewable energy investors see a golden opportunity in the crisis to use federal funds to reinvent the US territory’s grid as a storm-resistant network that relies less on costly coal and oil imports and more on local wind, solar, and batteries.
If it happens, it could ease power bills on an island that struggles with the second-costliest electricity in the US, behind Hawaii, as well as infrastructure prone to failing in the region’s frequent hurricanes.
“We cannot waste the opportunity of this crisis and federal aid package,” said Ramon Luis Nieves, a Puerto Rican politician in the Popular Democratic Party, who headed the island’s senate energy committee until his term expired in January.
“We need to focus on not only getting the grid back up, but improving it so it can tolerate more renewable energy.”
A set of bills introduced this week by US Democratic Senator Ron Wyden of Oregon would call on the Department of Energy to make the US electric grid hardier against natural disasters, and would offer grants for small scale, grid connected solar and other projects.
A Wyden aide said Puerto Rico’s utility, the Puerto Rico Electric Power Authority (PREPA), could apply for such grants to modernize the grid, or get funds from the Federal Emergency Management Agency to rebuild and then apply for the grants to help pay for upgrades.
Efforts to reach a PREPA official were not successful.
That government support would be crucial. PREPA was $9 billion in debt before declaring bankruptcy in July. Its equipment was already “degraded and unsafe,” according to a draft fiscal report the company filed in April.
Around half of Puerto Rico’s electricity is generated from imported fuel oil, with another third coming from natural gas, and much of the rest from coal, according to the Department of Energy.
Renewables supply about 2.4 percent, though the island has set a goal to obtain 20 percent of its electricity from renewables by 2035.
The prospect of a new grid in Puerto Rico has some renewable energy companies and investors interested. Jeff Ciachurski, CEO of Greenbriar Capital, a renewable energy investor in Puerto Rico, California and Arizona, said government support could open up new opportunities for the sector to take over market share.
“The federal government is in the driver’s seat,” he said.
Sunnova, a residential solar installer with 10,000 customers in Puerto Rico, said it was working with the governor to try to restore power off-grid in the short-term, but said the destruction also creates an opportunity to create a new, renewable-friendly grid.
“Everybody can agree that what the future and the new power industry and system look like is not what was there before,” John Berger, Sunnova CEO, told Reuters.
Tesla, meanwhile, is sending hundreds of batteries that can store power generated by solar panels to Puerto Rico to provide emergency help in the wake of Maria. A company spokesperson did not say what Tesla’s future plans were.
On Friday, Puerto Rico Governor Ricardo Rossello said his team is looking at alternative ways to bring power back on the island, including by using microgrids, small power networks that can work independently of the main grid.
Judith Enck, a former Environmental Protection Agency regional administrator for Puerto Rico, said solar-powered microgrids, as well as buried power lines, could allow for a more rapid recovery after storms.
Hurricane Maria left the entire island and its 3.4 million residents without power and destroyed 80 percent of its transmission and distribution infrastructure, according to the Department of Energy.
The Army Corps of Engineers has been placed in charge of restoring power as quickly as possible, a key step to restoring other basic services like water, fuel, and food.
Renewable energy investors see opportunity in Puerto Rico’s demolished grid
Renewable energy investors see opportunity in Puerto Rico’s demolished grid
G7 countries to release oil reserves as IEA agrees to largest ever market intervention
- IEA recommends release of 400 million barrels
RIYADH: Germany, Japan and Austria will release part of their oil reserves after the International Energy Agency recommended the release of 400 million barrels of oil from stockpiles, the largest such move in IEA history.
In a statement, IEA Executive Director Fatih Birol said the flow of oil, gas and other commodities through the Strait of Hormuz have all but stopped, leading global energy supply to fall by around 20 percent.
Ahead of the confirmation of the move — a larger intervention than the 182.7 million barrels that were released in 2022 by in response to Russia’s invasion of Ukraine — several countries began setting out plans to bring their reserves into play as countries grapple with soaring crude prices amid the US-Israeli war with Iran.
Birol said: “I can now announce that IEA countries have decided to launch the largest ever release of emergency oil stocks in our agency's history.
“IEA countries will be making 400 million barrels of oil available to the market to offset the supply lost through the effective closure of the strait.
“This is a major action aiming to alleviate the immediate impacts of the disruption in markets.”
Germany’s Economy Minister Katherina Reiche confirmed on Wednesday her government plans to limit petrol price increases at filling stations to once a day and to introduce more stringent antitrust regulation of the sector.
She did not give an exact timing for those measures, but added that the US and Japan would be the largest contributors to the release of the oil reserves.
The US has not confirmed it would do so, but its Interior Secretary Doug Burgum told Fox News on Wednesday that “these are the kinds of moments that these reserves are used for.”
The announcements did not stop oil prices rising, with Brent crude up 3.26 percent to $90.66 a barrel at 4:29 p.m Saudi time, and West Texas Intermediate up 3.12 percent to $86.05. Both were some way below the $119 a barrel seen earlier in the week.
“The situation regarding oil supplies is tense, as the Strait of Hormuz is currently virtually impassable,” Germany’s Reiche said.
“We will comply with this request and contribute our share, because Germany stands behind the IEA’s most important principle: mutual solidarity,” Reiche said about the IEA’s request.
According to a statement by Reiche’s ministry, Germany will contribute 2.64 million tonnes of oil. This corresponds to 19.51 million barrels.
Reiche stressed there was no supply shortage in the country, which has a legally mandated reserve of oil and oil products intended to cover 90 days’ demand.
South Korea will release 22.46 million barrels of oil, which represents 5.6 percent of the total IEA ask, the country's industry ministry said.
“The government will consult with the IEA secretariat on details, such as the timing and amount, from the perspective of national interests in accordance with domestic conditions,” the ministry said in a statement.
The ministry said it would continue to coordinate closely with major countries in responding to high oil prices to minimise any domestic impact.
Austrian Economy Minister Wolfgang Hattmannsdorfer said his country was releasing part of the emergency oil reserve and extending the national strategic gas reserve, adding: “One thing is clear: in a crisis, there must be no crisis winners at the expense of commuters and businesses.”
Acting ahead of the IEA move, G7 member Japan announced plans to release 15 days' worth of private-sector oil reserves and one month's worth of state oil reserves.
“Rather than wait for formal IEA approval of a coordinated international reserve release, Japan will act first to ease global energy market supply and demand, releasing reserves as early as the 16th of this month,” Prime Minister Sanae Takaichi said in a broadcast statement.
Following a meeting with the IEA on Wednesday, G7 energy ministers said: “In principle, we support the implementation of proactive measures to address the situation, including the use of strategic reserves.”
All IEA member countries are required to keep 90 days’ worth of their nation’s oil use in reserve in case of global disruption.
