Puerto Rico receives $584.5 million for energy boost

The United States Department of Energy Loan Programs Office (LPO) has announced the closure of a loan guarantee amounting to $584.5 million to subsidiaries of Convergent Energy and Power.

The financial backing will support a solar photovoltaic (PV) system with an integrated Battery Energy Storage System (BESS) and three stand-alone BESS projects in Puerto Rico. This initiative aligns with the current administration's endeavour to enhance and modernise Puerto Rico's electricity grid.

The solar PV facility is projected to supply approximately 200,000 MWh of energy yearly to Puerto Rico's grid, while the stand-alone BESS installations will provide up to 900 MWh of storage capacity. The deployment aims to boost the grid's reliability and stability by increasing both generation and energy storage capacity in proximity to the consumption centres.

Wider use of solar and battery storage is expected to reduce Puerto Rico's elevated energy costs and enhance resilience against extreme weather conditions. Energy costs in Puerto Rico are notably higher than the average across the United States, and these projects could help lower these costs.

Through the solar-plus-storage installation in Coamo, which includes a 100-MW solar PV system with a 55 MW BESS, and additional BESS installations in Caguas, Peñuelas, and Ponce, the project is expected to significantly cut carbon dioxide emissions. Together, these generate a capacity of up to 225 MW or 900 MWh.

The initiative is anticipated to prevent nearly 2.5 million tonnes of carbon dioxide equivalent emissions annually, comparing with the annual energy consumption emissions of approximately 335,000 households.

The energy solutions provided by Convergent's solar PV and battery storage systems play an essential role in both increasing renewable energy generation and improving energy resilience and affordability. These projects are integral to meeting Puerto Rico's clean energy and climate policy targets, including a complete transition from coal-fired energy by 2028 and achieving a 100% renewable energy mix by 2050 as mandated by the Puerto Rico Energy Public Policy Act (Act 17).

The project involves about 540 construction jobs and is expected to create 20 full-time positions once operational. A comprehensive Community Benefits Plan as required by LPO will be implemented. The plan emphasises community and labour engagement, prioritising high labour standards during construction and operation phases.

Part of the workforce development includes collaboration with the Puerto Rico Department of Economic Development and Commerce (DDEC) to integrate Registered Apprentice Programs, in which at least 15% of total work hours will be served by apprentice program workers. These efforts are focused on attracting participants from local communities.

This investment supports the Justice40 Initiative by targeting 40% of certain federal investments toward disadvantaged communities which are frequently affected by pollution and lack of funding.

The financial arrangement is funded through the Energy Infrastructure Reinvestment (EIR) program under Title 17 Clean Energy Financing as part of the measures established in President Biden's Inflation Reduction Act. The EIR aims to finance projects capable of retrofitting energy infrastructure to curb air pollutants or greenhouse gases.

President Biden authorised $1 billion for the Puerto Rico Energy Resilience Fund (PR-ERF), aimed at enhancing renewable and resilient energy infrastructures on the island. This loan guarantee is part of the broader strategy to strengthen Puerto Rico's grid and bolster its energy resilience.