How wind energy can help Puerto Rico’s debt crisis

Puerto Rico recently announced that it cannot pay its debt, which the island has accumulated in part due to its heavy reliance on expensive, imported petroleum for electricity.

According to CNN Money, “At the center of Puerto Rico’s debt problems is PREPA, the island’s energy subsidiary.” The utility must soon make a $400 million debt payment on its $9 billion in debt.

Puerto Rico’s electricity prices are twice as high as those on the U.S. mainland, in large part due to its reliance on imported diesel to run electric generators. In 2013, 55 percent of the commonwealth’s electricity came from imported petroleum while only 1 percent came from renewable sources, according to the Energy Information Administration. The mainland uses almost no petroleum to produce electricity because it is so costly compared to alternatives.

Islands often face high energy costs due to their generally small size and remoteness, making renewable energy an attractive option. Several other Caribbean islands have committed to start replacing diesel generators with renewable sources. A small Spanish island, the most remote of the Canary Islands off the coast of Morocco, has neared its goal of 100 percent renewable electricity. And Hawaii recently became the first state to require all of Hawaii’s electricity to be produced from renewable sources by 2045. On the mainland of Latin America, Costa Rica derived 100 percent of its electricity from renewables for 75 days this year.

Puerto Rico has made some progress. In 2010, the U.S. territory adopted a Renewable Portfolio Standard requiring 20 percent of net electricity sales to come from renewable energy by 2035. To help meet that, the government has signed Power Purchase Agreements with companies such as Pattern Energy, which operates Puerto Rico’s first in-service wind generator and the largest wind facility in the Caribbean. That project alone will supply 7 percent of the 12.5 percent of renewable energy needed to meet Puerto Rico’s interim target for 2015.

Other businesses are seeing the potential. In 2014, Blattner Energy, a leading renewable energy construction company, opened an office in San Juan to “support Puerto Rico’s shift from costly, imported fossil fuels to clean energy,” including wind and solar.

According to the National Renewable Energy Laboratory, Puerto Rico has 840 megawatts (MW) of potential wind power and only 120 MW of installed capacity. The ability of advanced wind technology to capture the power of higher and steadier winds may make wind development in Puerto Rico more attractive than it was previously, just as this technology is making wind development increasingly economical in the Southeastern U.S..

Those looking for solutions to Puerto Rico’s financial problems should make sure to include wind energy.

Stay informed

Take Action

Subscribe to the American Clean Power blog and receive the latest renewable energy news, policy updates, and opportunities to get involved.