Dive Brief:
- The Puerto Rico Electric Power Authority has selected Sunrun to develop a 17-MW virtual power plant, or VPP, that will lower energy costs for island residents and improve grid reliability by connecting 7,000 rooftop solar-plus-battery systems, the company announced Tuesday.
- Sunrun said it intends to spend the next year enrolling customers into the program, with an eye toward launching operations in 2024.
- Hurricane Maria destroyed the island’s grid in 2017, and in the wake of the storm the Puerto Rico Energy Bureau directed PREPA to investigate how VPPs and distributed resources could be used to develop a more resilient electric system. Sunrun says its project will be the island’s first distributed, large-scale storage resource.
Dive Insight:
It has been five years since Hurricane Maria devastated Puerto Rico, leading to an effort to rebuild and re-imagine the island’s fragile power grid.
In that time, residents have experienced other storms, earthquakes and electrical system failures, including Hurricane Fiona in September, which left most of the island without power. PREPA tapped LUMA Energy to manage the electric system last year, but critics say it has not improved the island’s electric service.
“LUMA is not the answer,” Tom Sanzillo, director of financial analysis for the Institute for Energy Economics and Financial Analysis, wrote in a Tuesday blog post. “So far, LUMA Energy is doing a poor job with operations.”
He pointed to an “understaffed and inexperienced workforce” and called for third-party oversight.
LUMA said in a statement that over the past 16 months, “and despite the years and decades of neglect of the transmission and distribution system inherited by LUMA, we have made significant progress in our mission to transform and modernize Puerto Rico’s electric system.”
The utility said it has replaced thousands of poles, connected tens of thousands of customers to solar and improved customer service. And it has initiated more than 200 projects to modernize the grid, “representing over $6 billion in federally funded projects, with 14 already under construction.”
Sunrun’s VPP project, however, will represent a new solution for the island, according to CEO Mary Powell.
“We’re solving energy insecurity on the island by switching the model so that solar energy is generated on rooftops and stored in batteries to power each home, and then shared with neighbors,” Powell said.
This will create a “clean shared energy economy,” she said.
The VPP will provide backup power to the home and allow customers to save money through on-site energy generation. Sunrun said customers will be compensated in exchange for “strategically sharing their stored energy with Puerto Rico’s power grid.”
Sunrun’s VPP project was approved Oct. 26 by PREPA’s governing board, but must be approved by the Puerto Rico Energy Bureau and Fiscal Oversight Management Board for Puerto Rico, say company officials.
The FOMB is a Congressionally-created agency that was formed in 2016 to help Puerto Rico address its debt crisis.
President Joe Biden visited the island last month in the wake of Hurricane Fiona and pledged additional funds to help “transform the entire system.”
“We’re particularly focused on the power grid,” Biden said. So far this year, Puerto Rico has received $4 million in federal funding to help make the power grid more resilient, but “that number is going to go up,” he added.
