Jamaica’s justification for the request included reference to the national energy policy, reducing carbon emissions and in particular, the goal to have 50 per cent renewable energy for electricity generation by 2030
CARICOM’s trade body is set to approve an extension of the suspension of a tax on Jamaica’s importation of nine renewable and energy efficient technologies, including lithium-ion batteries, from outside the region.
A two-year suspension of the Common External Tariff (CET) is due to end December 31.
But Jamaica’s energy ministry has asked the Council for Trade and Economic Development (COTED) to keep the suspension in place for another two years, from January 1, 2024 – December 31, 2025.
That request was given favourable consideration at last week’s meeting of technical officials ahead of the November 27-28 meeting of CARICOM trade ministers under COTED, which has the authority rule on the matter.
The CET is applied by all participating countries on select products. It effectively raises the price of imports from outside of the region, giving internally manufactured products a competitive advantage.
The treaty that governs CARICOM allows for a suspension for a variety reasons, including in instances where there is limited supply of product critical to a country’s economic development.
Jamaica’s justification for the request included reference to the national energy policy, reducing carbon emissions and in particular, the goal to have 50 per cent renewable energy for electricity generation by 2030.
It also pointed to the recent adoption of the electric vehicle and the energy efficiency and conservation policy and guidelines for public facilities, specifically for schools and hospitals.
Jamaica said the waivers would also assist consumers to finance the investment cost and increase the growth rate of installations and further that the targeted technologies are not being produced in Jamaica and the quantity of any of the products being produced does not satisfy the demand of the Jamaican market.
The energy ministry said it consulted with private and public sector stakeholders – the Jamaica Renewable Energy Association, the Consumer Affairs Commission, the Bureau of Standards Jamaica; the Jamaica Customs Agency and the Ministry of Finance and the Public Service.
Jamaica’s electricity sector mix was supplied by 34 per cent fossil fuels, 53 per cent Liquefied Natural Gas and 13 per cent renewable energy in 2022, according to the ministry.
Renewable energy and energy efficient technologies on Jamaica’s priority list
1. Compact fluorescent lamps
2. Air conditioning and chillers with rotary screw compressors
3. (Electric) vapour absorption refrigeration systems
4. Thermal storage air conditioning systems.
5. Ice thermal storage air condition systems
6. Solar water heating mounting accessories
7. Other accumulators – rechargeable batteries for renewable energy systems (photovoltaic systems)
8. Absorption refrigeration equipment and materials utilising solar energy
PROSPECT, Westmoreland — Minister of Science, Energy, Telecommunication and Transport Daryl Vaz says his ministry is currently looking into the issue of some insurance companies’ refusal to insure electric vehicles (EVs).
The minister said he was hearing for the first time about the issue, which was brought to his attention last week in a Jamaica Observer business report.
“It is something that the ministry is looking into, based on the complaint that was made. But the policy, as it stands, does allow for used and new electric vehicles,” stated Vaz.
In the Observer article, published last Wednesday, a lecturer in the Department of Life Sciences at The University of the West Indies, Mona, Dr Dwight Robinson said he purchased an EV in September but was unable to get it insured comprehensively with his insurer, Insurance Company of the West Indies (ICWI).
According to the article, president of ICWI Paul Lalor said the company would only refuse to insure an EV if it is a car imported by an individual or entity that is not one of the registered new car dealers, or if it is an imported used EV.
Said Vaz: “The insurance company has the right to decide whether they want to insure or what type of vehicle — whether new or used — but the bottom line is that the policy, which is what… [Government] is responsible for, allows for both. So, it is something that we will have to look into to see exactly what the issues are,” stated Vaz.
“I suspect that the issue of the charging of the electric vehicles and the fact that there has been some reported incidents of fire — which obviously nobody knows what the true situation is in terms of the cause of the fire — [might be the cause of this decision by the insurer],” said Vaz, noting that the Government will speak on the matter in due course.
In the article, Robinson said the issue is something Government should look into, considering its push for EVs.
In June of last year Cabinet approved a policy to incentivise the importation of EVs. Government had also announced that it is making adjustments to the Motor Vehicle Import Policy to accommodate an EV concessional rate of 10 per cent.
Vaz, asked if the development is a blow to Government’s push for EVs, said, “No, because the truth of the matter is that EV is a new technology. And I believe that once it shows that it can perform and that the vehicles are roadworthy, and of course safe, the panic and the concerns will die down.”
Marubeni says old power plants to be replaced by renewables
Executives from JPS shareholder Marubeni commit to replacing its aging power plants with renewable energy plants in the next two years. The Marubeni executives made the commitment in a recent meeting with Prime Minister Andrew Holness.
arubeni Power International has now confirmed that renewables have been chosen to replace old fossil fuel-fired power plants at Rockfort and Hunt’s Bay in Kingston. The company made the revelation about the choice after making the commitment to the Government to align the company with the objective of having 50 per cent of power generated in Jamaica coming from renewable sources by 2030, during a recent visit.
The two power plants are expected to be shutdown starting in the next two years, and the Jamaica Public Service (JPS), based on its licence, has the right to replace generating capacity it already owns and will be spending US$500 million to replace those plants with renewable energy. It will be looking to develop projects which together will replace 171 megawatt entirely with solar and wind energy.
“In the next two years or less, some of the plants are going to be shutting down and have to be replaced, and the replacement the Government indicates to us has to be renewables,” Damian Obiglio, senior vice-president, Marubeni Power International and chairman of JPS, told the Jamaica Observer in an interview Tuesday. He added that the investment will also include battery storage to ensure power remains available when the sun is not shining or when the wind dies down.
The confirmation comes long after it was first indicated that the JPS would be replacing the old power plants with renewable energy. Daryl Vaz, Jamaica’s energy minister, earlier this year told the parliamentary committee reviewing the Electricity Act that renewables would be the replacement power source, but a check with the JPS then revealed that the issue was not finalised as yet.
Marubeni says it will be working with its partners to spend US$500 million to replace 171MW of fossil fuel-generated electricity with solar and wind solutions in the next two to three years.
“JPS is in the final stages with the Government about how much battery, wind and solar power,” Obiglio added in the interview with the Business Observer. He said it is expected that 60 per cent of the investment, or US$300 million, will be spent on batteries to store power for future use. Of the US$200 million left to build the farms, he said US$160 million will go to solar farms while the other US$40 million will be invested in wind energy solutions.
“These are different investments from the other renewable investments the Government is seeking. This is the JPS just replacing existing capacity which is about to come off line with renewables,” Obiglio stressed. He said the Government indicates that it would prefer the battery farm to be somewhere in the Corporate Area where demand is greatest, either on Spanish Town Road or at its old plant at Hunt’s Bay.
“In the case of renewables, the Government have indicated a strong preference for the farms to be in the eastern end of Jamaica — the St Thomas area and the Portland area — while some of the plants may be set up in Clarendon.”
The company added that it is awaiting further directives and stand ready to cooperate as soon as the plans are agreed upon.
Just recently, executives from Marubeni Corporation and Marubeni Power International visited Jamaica in demonstration of their ongoing commitment to the country and to being an investment partner in the nation’s growth.
In the island for a one-day visit were Satoru Harada, Chief operating officer, Power Division of Marubeni Corporation and Yukio Konishi, senior vice-president, Marubeni Power International.
They paid a courtesy visit on Prime Minister Andrew Holness at the prime minister’s office, where Harada spoke to the significance of Marubeni’s investment in Jamaica and pledged to continue to partner with the Government in supporting economic growth through efficient and sustainable energy generation.
Marubeni, a major shareholder in JPS, also has interests in the 194-MW capacity power plant operated by South Jamaica Power Company, located in St Catherine.
Currently, JPS has two major investors: Marubeni Corporation and Korea East-West Power, and each holds 40 per cent of shares in JPS. The Government of Jamaica, through the Development Bank of Jamaica, holds the remaining 19.9 per cent while the remaining less than 1 per cent is held by private shareholders.
GEORGETOWN, Guyana, 2023 – Guyana is to implement a policy to tax companies that consume large amounts of electricity during peak hours.
This was announced by Vice President Bharrat Jagdeo.
The move comes after the Guyana Power and Light Friday called for consumers to adopt conservation practises as the utility company registered its highest-ever electricity generation and demand.
In a statement, the company said that it recorded a peak demand of 182 megawatts compared to 154 megawatts for the corresponding period last year.
Jagdeo also on Friday explained that the over-peaking of electricity consumption was due in part to large electricity consumers who were previously self-generating and are now reconnecting to the national grid following the government’s decision to subsidise electricity costs.
The situation is compounded by the current high temperatures being experienced which have led to higher use of air conditioning units and fans.
“To cushion the effect of this situation, GPL is seeking the support and cooperation of our customers in adopting conscientious electricity conservation practises,” the power company said, urging consumers to use LEDs that consume “significantly less electricity and generate less heat”.
In addition, factories, manufacturers and other large customers are being asked to “manage their production schedules efficiently to conserve electricity” and housewives are urged to schedule laundry and ironing on one day instead of multiple days.
“Our demand now, in a single night, is 180 megawatts and we only have 174 megawatts of installed capacity, so you have, of necessity, to take some people off the grid,” Jagdeo told a gathering at the opening of the West Central Mall at Leonora, West Coast Demerara.
However, he said that the government will be investing in additional generation capacity of some 30 megawatts of power, expected before the end of the year.
He added that the 300-megawatt Wales gas-to-energy project that is to come on stream next year is expected to significantly improve electricity supply as well as reduce costs.
The vice president accused the former APNU+AFC Coalition administration of not making the required investments in the energy sector, citing the scrapping of the 165-megawatt Amaila Falls hydropower plant, which he claims has led to an increase in the spate of blackouts.
He also accused the coalition of not investing in new capacity during its 2015-2020 tenure.
Graphical representation of an under construction nuclear power plant. Amb Byron Blake writes: Positioned as an apt solution for a small island nation, SMRs are presented as a ‘burgeoning technology’” But, that burgeoning is all ‘on paper’, as it is still at the design stage.
In an article published in the Sunday Gleaner of July 30, titled ‘The Potential of Nuclear Energy as Part of the Future Energy Mix in Jamaica’, Oshane Hamilton explored the viability of integrating nuclear energy into Jamaica’s energy landscape. While his exposition on this nuclear prospect may be persuasive at first glance, a more critical evaluation is warranted.
Hamilton’s central argument for nuclear energy in Jamaica is predicated on the promise of Small Modular Reactors (SMRs), an emerging design stage technology. Approximately 85 per cent of the article is dedicated to extolling the merits of nuclear power as a low-greenhouse-gas-emissions, highly available energy source, and emphasising the advantages of SMRs over conventional nuclear power plants.
Positioned as an apt solution for a small island nation, SMRs are presented as a “burgeoning technology”. But, that burgeoning is all “on paper”, as it is still at the design stage. In that regard, it is important to note Hamilton’s concession in his article’s closing lines that the deployment and validation of SMRs are yet to be realised.
FALLS SHORT
One key advantage highlighted by Hamilton is the small spatial footprint of SMRs. However, the article falls short of clarifying the required number of units to establish a substantial power-generating facility. Procuring upwards of 35 acres of suitable, flat, remote, and uninhabited land, and possibly several pieces, in Jamaica, could be a formidable challenge, given the island’s limited available space and topography.
The article seems to dismiss concerns about nuclear plant safety by arguing that SMRs are safer than conventional nuclear plants, which, in turn, are supposedly safer than alternative energy sources. But, to be safer than the alternative does not make a technology safe. Further, this perspective sidesteps the perpetual challenge of nuclear waste disposal and management, radiation hazards, and the long-term implications. One significant apprehension in Jamaica and the Caribbean pertains to nuclear material usage and the required safe disposal of waste. Considering the region’s high dependence on tourism and the Caribbean Sea’s extensive traffic, coupled with the presence of geographical parts of nuclear-armed states, a nuclear-free stance has been advocated and rigorously pursued.
DEFICIENCY
We do well to remind ourselves that, while illogical, parts of the US, France, and UK are within the Caribbean. These realities have underpinned historical efforts to establish the Caribbean as a nuclear-free zone and the region’s consistent protests against the trans-shipment of nuclear waste through the Caribbean Sea. The unbroken collaboration within the Caribbean underlines the importance of thorough consultation before any action to alter this stance.
A notable deficiency in Hamilton’s article lies in its treatment of renewable energy sources. In the brief segment addressing renewables, he acknowledges Jamaica’s abundant renewable resources, which could substantially diminish reliance on costly, environmentally detrimental fossil fuels. However, the subsequent section titled ‘Problems with Renewable Energy’ focuses disproportionately on the limitations of solar and wind power. While it is true that these sources are subject to natural variability, entail high initial costs, and require extensive land, a comparative analysis should encompass both financial and economic costs and benefits. It is crucial to recognise that the costs of these technologies have been falling, economic costs escalate with global climate change, and many of the financial costs are localised, thus reducing foreign currency demands. Moreover, innovative placement of wind turbines at sea or in remote areas, as well as efficient land use in solar project spaces, have demonstrably enhanced their overall viability.
Curiously, Hamilton’s article omits any mention of biomass-based energy, which holds, perhaps, the greatest potential in the Caribbean’s humid tropical environment. Biomass offers the added advantage of capturing greenhouse gases from the atmosphere and sequestering them, while serving numerous other agricultural, economic, and environmental purposes. It is, for example, a means of enhancing the rediscovered importance of agriculture in national development.
In conclusion, the article has a discernible inclination to validate a preconceived notion. The exploration moved quickly to the advancement of viability. The rigour in interrogating an unproven technology and the consequent cautions are absent. The case of potential alternatives, in particular the alternative for which Jamaica is best endowed, is superficial. These shortcomings notwithstanding, Oshane Hamilton’s piece could serve as a valuable catalyst for serious deliberation on a subject with far-reaching policy implications for both Jamaica and the wider Caribbean. It is hoped that the opportunity will spark substantial discourse among stakeholders and policymakers before commitments are given and investments made which will bind Jamaican citizens and taxpayers.
Byron Blake is former assistant secretary general of the Caribbean Community (CARICOM), based in Kingston, Jamaica.
JAMAICANS looking to make the shift to electric vehicles (EVs) are being urged by insurers to ensure they purchase the vehicles from a locally registered new car dealer or they may have issues getting them insured.
The issue came to light on Monday when an X (formerly Twitter) user posted that a friend bought an EV but could not get it insured.
The Jamaica Observer reached out to the person behind the post and was put in touch with Dr Dwight Robinson, a lecturer in the Department of Life Sciences at The University of the West Indies, Mona, who said he was the person being referred to.
Robinson told the Business Observer that in September last year he purchased an EV but was given what he calls “the shock of his life” when he tried to get it insured with his insurer, Insurance Company of the West Indies (ICWI).
“I was very surprised that when I went to them to get insurance, after having two other cars insured with them, I was told that I can’t get comprehensive insurance for the EV and so I had to take third-party insurance on that one,” Robinson recalled in an interview with the Business Observer.
He said when he asked for an explanation about the challenges and the risks associated with owning an EV, which would exclude it from being comprehensively insured, he was told that the company just doesn’t insure EVs comprehensively.
“They didn’t even attempt to give me an explanation, only just telling me that they don’t insure EVs comprehensively and that it is just company policy,” he continued. Robinson said he has subsequently lost the vehicle to thieves and questioned how the Government policy to drive EV ownership would fare if owners can’t get comprehensive insurance for them, especially given that most people would have to borrow money to purchase a car, while most banks will not lend the money unless the vehicle is comprehensively insured.
“I had to find a way to finance it myself because I couldn’t get it comprehensively insured,” Robinson highlighted. “I can’t see how persons who wish to make this shift to help to create a more green environment can do so if they don’t have the resources to buy the car upfront,” he added.
Robinson said the issue is something the Government should “look on more than the 10 per cent duties to nudge insurance companies to insure [EVs] comprehensively”.
The Business Observer contacted Paul Lalor, president of ICWI, about the matter, who, after checks, said the company would only refuse to insure an EV under two conditions, once the other risk factors are accounted for: if it is a car imported by an individual or entity that is not one of the registered new car dealers or if it is an imported used EV.
“The rule is, once the car comes from a registered local dealer we will insure it comprehensively,” Lalor told the Business Observer in an interview Tuesday. He reeled off a list of new car dealers, including ATL, Stewarts Auto, Magna Motors, and Toyota, who either sell EVs or have announced an intention to sell EVs, adding that ICWI insures the EVs they sell.
“Electric cars are a learning experience for all of us (especially the insurance sector),” he added. “What we can’t guarantee is the cost of repairs. If the car gets into a collision we don’t have any idea how they are going to get it fixed.”
Lalor said there may be other insurers who are braver than ICWI, however, “As the market develops, I am sure you will see us getting more and more comfortable with insuring these cars.”
When that time comes, he said, insurers may even extend to insuring second-hand EVs that may come into the country as they feel more comfortable with repairs.
“What we are not comfortable doing yet, because we don’t know enough about it, and we have not gotten the experience from it, is to take a second-hand domestic out of Japan that comes to Jamaica used and then gets into an accident. We don’t know where we are going to get the parts and so will not insure it,” he said.
Lalor even said if the car at the time of importation is brand new, but not brought in by one of the new car dealers, the motorist will find issues getting it insured at ICWI.
“Once it comes in from a dealer, and you are buying it brand new, once it’s bought that way, we will insure it comprehensively. We will, however, not insure a brand new EV that is imported by anyone or entity other than one of the local new car dealers. There may be other companies that do, but we want to trust the training that the dealers have before they bring the cars in,” he said as justification for the policy.
He said he knows for example that the ATL Group will be selling the Chinese-made EV brand BYD and that their “guys have been to China to learn how to fix the cars and people from BYD have also been here to train them. So that’s what we are trusting”.
Lalor had a final recommendation for those who want to own an EV.
“We are recommending to people buying EVs that they buy from the local dealers initially and then that way, from ICWI’s perspective, we can insure it comprehensively.”
He told the Business Observer to check with Robinson to ascertain if the EV he sought insurance for was bought locally from a new car dealer or imported by himself. Lalor added that he believes the client’s insurance request was turned down because the car was imported by Robinson and not bought through a local dealer. Efforts to get clarity from Robinson failed, with calls to his cellphone going unanswered.
The Government of Jamaica has finally invited bids from investors for the provision of an additional 100 megawatts of renewable energy capacity, ending a yearslong wait by the sector.
It comes amid refreshed plans and a more ambitious goal to achieve a 50 per cent target for renewables by 2030 in a remix of the energy grid. The requests for proposal have been issued through the Generation Procurement Entity or GPE.
“This procurement signifies a step toward a cleaner and more sustainable energy future for Jamaica,” GPE said in the tender document.
The 100MW to be supplied would grow renewables from 187MW or 12 per cent of Jamaica’s total electricity grid to 287MW or about one-third of the grid.
To hit the 50 per cent target, renewables would need to grow further to around 400MW, based on the current size of the total electricity grid. The overall capacity stands at 789MW, according to the latest disclosures in filings by grid operator Jamaica Public Service Company.
Currently, the main sources of renewable energy are in the form of wind at 101MW, solar at 58MW, and hydro at 28MW.
The investors currently being sought will be required to build, own and operate the new renewables power generating plants. GPE will allow bids for one energy source or hybrid combinations.
The proposals due by February 1, 2024 may or may not include storage which are batteries that hold the power generated during peak periods for use during low periods, such as at night for solar.
Successful bidders will supply the national grid with electricity under contract known as PPAs or power purchase agreements with monopoly distributor JPS. They will also be to pay a deposit upfront, the size of which will be determined by the scope of their project.
Projects may vary in size from 5MW to 50MW of net capacity.
“As of the execution date of the power purchase agreement, the company shall furnish a construction security deposit for an amount equivalent to US$100,000 per MW of the complex,” said the GPE document.
The last time Jamaica tendered for renewable energy supplies was in 2015 for 37MW of capacity. Prior to that, in 2012 the government sought investors to develop 115MW of renewable power but only assigned 78MW in total to three successful bidders, including Eight Rivers which built a large solar farm in Westmoreland.
“No comment,” said Eight Rivers principal Angella Rainford when asked if her company would bid this time around.
Rainford diversified her firm away from sole reliance on Government projects, during the eight-year hiatus. Through a company called Soleco, she and her partners supply solar solutions for large and industrial clients.
“The market is looking at both strategies – distributed power and at the utility-scale,” she said regarding how renewable firms now assess business opportunities.
Most of Jamaica’s energy is generated from liquefied natural gas and oil, which make up 88 per cent of the energy grid. Renewables account for the other 12 per cent.
“This 12 per cent can be further divided into wind power at 6.0 per cent, solar power at 3.0 per cent, and hydro power at 3.0 per cent,” stated GPE.
However, it didn’t say how closer the 100MW would take Jamaica towards the target of 50 per cent.
“We will not make it to the target of 50 per cent of the island’s electricity coming from renewables by 2030 at this rate,” said one renewable firm operator, who explained that timelines between the release of new requests for proposals make the target of 50 per cent unlikely.
“If we are going to have to wait five to six years between each renewable capacity addition, then 50 per cent by 2030 is just not going to happen,” the person said.
Both the GPE and JPS documents reference the renewable capacity provided by independent power providers, amounting to 156MW. It grows to 187MW, once the 31MW of renewables owned by JPS is added to the mix.
Renewable projects once fell under the ambit of the Office of Utilities Regulation but that function was transferred several years ago to the Generation Procurement Entity, which was created under the amended Electricity Act of 2015.
WASHINGTON, United States, (AFP) – The International Monetary Fund’s (IMF) executive board approved the disbursement of around US$866 million for Jamaica on Thursday as part of two loan programmes designed to strengthen the country’s economy against multiple shocks.
“Important progress has been made on the fiscal reform agenda,” IMF Deputy Managing Director Antoinette Monsio Sayeh said in a statement announcing the completion of the first review into the agreements signed in March.
That progress includes reform of the Caribbean nation’s public wage structure and improvements to its fiscal policy framework.
Jamaica’s economy has bounced back following a challenging period during the COVID-19 pandemic.
The IMF said in March it expects the country’s real GDP growth reached around four percent last year, but warned of risks ahead from a range of factors, including the lingering impact of the war in Ukraine.
On Thursday, the IMF board made available around US$611 million under an agreement it has previously said is designed “to provide insurance against risks from higher commodity prices, a global slowdown, tighter-than-envisaged global financial conditions, and new COVID outbreaks.”
A further US$255 million was made available Thursday under a second loan agreement aimed at strengthening Jamaica’s resilience to climate change and better-preparing it for decarbonisation and the transition to a greener economy.
The Jamaican authorities have been “advancing their ambitious climate policy agenda to increase resilience to climate change and green the economy,” Sayeh said.
After Hurricane Maria devastated the island, residents launched community-based solar projects to keep the lights on. Activists call it an “energy insurrection.”
Hurricane Maria knocked down power lines across Puerto Rico. Some remote villages were without electricity for nearly a year.
On Sept. 20, 2017, Hurricane Maria slammed into Puerto Rico and devastated the island’s aging and inefficient power grid.
Air conditioning couldn’t work. Water couldn’t be pumped to higher floors. Hospitals couldn’t maintain lifesaving machinery. Diesel and propane generators helped, but they’re costly and unwieldy and pump noxious fumes into the air.
It would be late November before more than half the island’s 3.4 million residents had electricity. And some remote areas were without power for nearly a year.
Even in the absence of natural disasters, though, outages, rolling blackouts and appliance-frying surges are a daily reality. This ongoing energy crisis has forced residents to evolve quickly on renewables, especially solar power: The US territory has more rooftop solar installations per capita than all but six US states. (And that doesn’t include smaller systems that aren’t hooked up to the grid.)
Puerto Rico is especially well positioned to embrace solar: Studies suggest it receives enough sunlight to meet its residential needs more than four times over.
“Everyone should be keeping their eye on Puerto Rico,” said Lauren Rosenblatt, co-founder of Barrio Electrico, which provides solar energy to low- and moderate-income households on the island.
“What the [rest of the] US is going to see is that there are a lot more options for resiliency and sustainability,” Rosenblatt told CNET. “Not every solution that works in Puerto Rico will work in your community, but they’re generating myriad solutions. We’re lucky to have them leading the way.”
Climate change is putting energy infrastructure to the test all over the US, and the challenges Puerto Ricans face — and the solutions they’re finding — could be a glimpse at the future for those far from the island.
Here’s what Puerto Rico can teach us about energy resilience, the benefits of solar and the role of community groups, utilities and government in reaching a sustainable future.
Solar power is critical to climate resiliency
Climate change is making hurricanes more extreme and destructive. Scientists at Stony Brook University’s School of Marine and Atmospheric Sciences found that, from 1850 to 2020, human-generated greenhouse gases led to an increase of more than 1 degree Celsius in global average surface temperature.
That warming trend “will lead to yet further increases in North Atlantic hurricane season extreme rainfall rates and accumulated amounts,” the researchers wrote in the journal Nature Communications in April 2022.
As the intensity of severe weather incidents increases, so will the frequency of power outages. Solar panels, though, are designed to withstand hurricane-force winds: When Hurricane Maria hit, a VA hospital in San Juan remained fully operational while others lost power, thanks to its solar setup.
Javier Rúa-Jovet is chief policy officer for the Solar and Energy Storage Association of Puerto Rico, a regional trade association. After Maria, his home in a middle-class part of San Juan was without power for six weeks.
Relying on a 17-kilowatt generator for power, he said, was traumatizing.
“My whole nervous system was in tune with the noises it made,” Rúa-Jovet told CNET. “Every day I was afraid the generator was going to die.”
By the time Fiona made landfall last year, though, Rúa-Jovet had connected a Tesla Powerwall to his rooftop array and was able to maintain full power. Now, whenever there’s an outage, the system kicks in automatically, often in less than a second.
“Sometimes you see the lights flicker when there’s an outage,” he said. “But usually you don’t know until you get a notification on your phone.”
Crises can bring opportunities for innovation
A worker installs solar panels in Puerto Rico
Before Hurricane Maria, there were maybe 9,000 rooftop solar setups in Puerto Rico, according to Rúa-Jovet, and most weren’t connected to batteries.
“After Maria, solar is basically universally installed with storage,” he said. “It was really a paradigm-shifting event.”
New installations have grown from a few hundred a month to more than 3,000.
In January 2022, there were 42,000 homes and businesses with solar-plus-battery projects in Puerto Rico, more than eight times the number before Irma and Maria.
This summer, that number is nearing 80,000.
That’s still only a fraction of the close to 1.2 million households in Puerto Rico, but the desire to move beyond the grid is growing exponentially.
Solutions have to be cost-effective
In Puerto Rico, power isn’t just unreliable, it’s expensive. Residential electricity averaged 24.17 cents per kilowatt-hour in May, compared with 16.14 cents in the continental US. The cost of importing petroleum, natural gas and coal means electricity can be up to twice as much as it is on the mainland.
Solar is more reliable and cheaper in the long run, but installing a rooftop system still runs between $10,000 and $13,000. That’s a steep price in a territory where the median household income is just under $22,000.
Financing options grew substantially after Hurricane Maria. Rúa-Jovet said solar companies like Sunrun and Sunnova offer terms that enable residents with a credit score of about 640 to get a rooftop setup without any upfront costs.
Instead of monthly electricity bills, he said, approved customers pay roughly the same amount in loan payments “for power that is clean and doesn’t go away.”
And unlike energy costs, the loan rates are fixed.
Vulnerable populations can’t be left behind
While Sunnova and Sunrun offer solar loans, there are still many in the commonwealth who can’t afford financing. According to the US Census Bureau, 40.5% of Puerto Ricans live in poverty, more than twice the 19.7% poverty level in Mississippi, the poorest state in the US.
“There is a place for for-profit companies like Sunnova and Sunrun to offer [financing], but it’s not a silver bullet,” said Andrew Hermann, executive director of the Monte Azul Foundation, a nonprofit focused on energy and food equity. “We’re going to need a lot of different solutions.”
On July 31, the US Department of Energy announced more than $450 million was being allocated for distributed solar and battery storage in some of Puerto Rico’s most vulnerable neighborhoods.
Secretary of Energy Jennifer Granholm said her agency was committed to expanding access to clean energy in Puerto Rico, “especially for the communities most at risk.”
The funds will enable up to 40,000 setups to be installed in low-income areas hit with frequent and prolonged outages. (Households with energy-dependent devices like electric wheelchairs and at-home dialysis machines are also being targeted.)
“That’s the best population to direct incentives toward,” Rúa-Jovet said. “It’s very targeted money that will help people that are basically outside of the financing market.”
The investment is part of the $1 billion Puerto Rico Energy Resilience Fund established by the Biden administration to strengthen the island’s grid and help it reach its clean energy goals. Further investments will be directed at community solar projects, microgrids and grid modernization, according to the Department of Energy.
Community-based solutions can lead the way
A private US-Canadian consortium, Luma Energy took over responsibility for maintaining and improving the island’s utility grid in June 2021. Its predecessor, the Puerto Rico Electric Power Authority, or PREPA, was a government monopoly that filed for bankruptcy following decades of mismanagement, negligence and corruption.
Luma inherited a decrepit system, but it has been blamed for failing to improve service and future-proof the grid.
“Its performance so far has been, in the best case, deficient, and in the worst, dismal,” said Sergio Marxuach, policy director for the Puerto Rican think tank Center for New Economy.
Luma didn’t respond to a request for comment.
On the ground, residents aren’t waiting for Luma — or lawmakers — to provide solutions. In rural areas, grassroots groups are constructing standalone solar networks, known as microgrids, to ensure hospitals, schools and fire stations have power.
In Caguas, about 20 miles south of San Juan, donated solar panels were attached to the roof of an abandoned office building, transforming it into a supply center that doesn’t rely on electricity from the utility.
“There are many communities — small communities — that are really making big waves and developing solar-plus-storage microgrids,” Hermann said.
There’s been so much interest, he added, “because so many people are just fed up with the current system. These communities are coming together to really choose a different path.”
Arturo Massol-Deyá, executive director of the community environmental group Casa Pueblo, calls the movement an “energy insurrection.”
Casa Pueblo has been the driving force behind community solar in Adjuntas, a mountainside town of about 18,000. In an area where some people were without power for 11 months after Maria, the organization was able to install 700 solar panels and provide 220 kilowatts to more than a dozen businesses downtown. Second-hand EV batteries donated by automaker Rivian provide a megawatt of battery storage and allow Puerto Rico’s first community-owned microgrid to provide power independent of the grid for up to 10 days.
Casa Pueblo worked with nonprofits like the Honnold Foundation and the Community Solar Energy Association of Adjuntas to fund the $2 million project. And while the merchants pay for the energy they use, their rates are significantly lower than Luma’s. Profits are used for maintenance and to finance rooftop solar installations for low-income residents.
The Monte Azul Foundation is working to develop a smaller microgrid in Maricao, a village of less than 5,000 residents that sees outages several times a week. It’ll only generate between 100 and 150 kilowatts, but it will power a pharmacy, a gas station and the only bank in Maricao.
“When we don’t have power, we lose access to ATMs and all our financial services because the bank has no backup power,” Hermann said.
But support from the government and utilities is essential
While the federal government has allocated more than $30 billion to help Puerto Rico recover from Maria and the 2020 earthquakes, critics say not enough is being done to develop energy resiliency.
In 2019, the legislative assembly passed the Puerto Rico Energy Public Policy Act, or Act 17, which set an ambitious deadline to use 100% renewable energy by 2050.
“Puerto Rico’s Green New Deal,” as Rúa-Jovet called it, sets a benchmark of 40% of electricity from renewables by 2025 and 60% by 2040. Right now, though, solar, wind and other clean energy sources generate only about 3% of the island’s electricity. The remaining 97% come from fossil fuel-fired power plants.
In February 2022, the government-appointed Puerto Rico Energy Bureau conditionally approved 18 renewable power plants projected to produce 884 megawatts by the end of next year.
That’s supposed to boost the share of electricity from renewables to 23%, but that’s still short of Act 17’s 40% goal. And environmentalists are suing to halt the projects because, they say, the plants will be built on agriculturally valuable land instead of rooftops, parking lots and landfills.
Regulators have also been accused of targeting recovery funds for fossil fuel projects. They even floated the idea of taxing solar users up to 4.6 cents per kilowatt-hour to pay down PREPA’s $8.2 billion debt and discourage people from defecting from the grid.
Neither Luma nor the government in San Juan has actively opposed community microgrid projects, activists say. But they haven’t done much to help, either.
“There isn’t a whole lot of government involvement in rural mountain communities to begin with,” Hermann said. “They’re forgotten about in many ways.
Virtual power plants can take stress off the grid
In addition to keeping homeowners’ power on during a blackout, solar-plus-battery systems that are connected to the grid can send energy back to the network during high-usage periods.
Using connected households or businesses to meet grid needs is commonly referred to as a virtual power plant, or VPP.
Luma is enlisting 6,000 customers for a pilot VPP program expected to launch this fall. When high-demand situations arise, the utility will access battery reserves from the participants, who are credited for the energy they provide.
“This program is being developed to address those days when Luma has a shortfall in energy generation,” said Michael Juarbe, Sunnova’s senior manager for government affairs. “What’s very important to understand is that this is an opt-in program — we’re not forcing anyone to participate, and people can set how much they distribute.”
The technology is there to do a much larger VPP network, Juarbe said, “but we know that you have to take slow steps.”
Should it be successful, Juarbe could see a VPP generating a gigawatt of energy for Puerto Rico.
“We could replace a power plant based on dirty fuels and provide clean energy consistently to the grid,” he said. “In the short term, we’re talking about avoiding outages. But long term, I think virtual power plants are the future.”
Decentralize the power supply
Puerto Rico’s largest power plants are along the southern coast. But the most populous areas, like San Juan, are in the north. Transmission lines that cross remote mountain ranges are vulnerable to hurricane winds and take a long time to repair.
“Our energy paradigm is still a centralized system based on imported fossil fuels,” Rúa-Jovet said. “That’s the opposite of resiliency. If you hit one part, everything goes down.”
The solution, he added, “is to have systems that are widely distributed, with lots of redundancies.”
Solar-plus-storage microgrids “can decouple and operate independently of the main grid during blackouts,” according to a position paper from the Rocky Mountain Institute, a clean energy think tank.
“We champion a highly decentralized, bottom-up grid approach that starts with personal microgrids, aggregated microgrids, then community microgrids — all the way to municipal or even larger solar and storage systems,” the group said.
Puerto Rico’s present is the mainland’s future
Puerto Rico has been grappling with an energy crisis for years. But it’s only recently that other parts of the US have realized how fragile their energy grid is.
BCIC has launched a new hurricane insurance policy just in time for the hurricane season. They have partnered with Yokahu, an insure-tech company from the United Kingdom, to create a new hurricane insurance product for homeowners and renters.
Reinsurers have left the Caribbean reducing the capacity for insurance companies in Jamaica to take on new customers. With this and other recent developments in the property insurance market, homeowners and renters have seen their premiums skyrocket.
BCIC has launched its new product to provide homeowners and renters with affordable and hassle-free insurance all year round, but especially during the hurricane season. This new product is 100 per cent online and will be sold directly to customers through the BCIC website. Customers can purchase it for as little as US$60 and premiums go up to US$750.
The process for payouts is much different from what one typically expects from an insurance company. There is no claims process or need to show proof of damage to receive a payment. Once the strength of a hurricane rises to approximately a category three or above with wind speeds reaching 74 mph, the customer is automatically paid. Payouts for customers begin at US$160 and go as high as US$10,000.
Many homeowners have found that they are unable to buy home insurance because local insurers are not taking new customers. Others have seen the cost of home insurance go up well past their ability to pay. This product is designed to be an affordable policy for those who are unable to get or afford home insurance. It can also act as an add-on to an existing homeowner’s policy or cover for renters who want their belongings protected.
Managing director of BCIC, Peter Levy, is excited for the potential of the product to help Jamaicans feel like they won’t be ‘left out in the cold’, this hurricane season.
“Hurricanes can strike with unimaginable force, leaving behind a trail of destruction and wreaking havoc on homes and properties. Having your home damaged, which for most people is the greatest monetary investment they will make in their lifetime, is very scary. In the event that someone’s home is damaged, the stress of having to deal with that, compounded by the stress of what can sometimes be a lengthy claims process, we think, is too much to place on the shoulders of our customers” he said.
Levy believes that with property insurance becoming increasingly expensive, protection for one’s home or belongings is less accessible. He said this is an inclusive product that helps to ‘cushion the blow’ of premiums in a property insurance market that is out of reach.
“Hurricanes are not an imagined threat in Jamaica. We have decades of evidence showing the consequences of being ill-prepared for hurricane season. Our approach to the market has led us to create a product that is for everyone, and we are proud to be able to have a product that puts the customer first,” said Levy.
