Solar

Project Marahu: Puerto Rico secures $860M+ loan for utility-scale solar and battery storage

A Department of Energy loan will help Puerto Rico pursue its clean energy goals, supporting the construction of two solar farms equipped with battery storage and two standalone battery energy storage systems.
Project Marahu: Puerto Rico secures $860M+ loan for utility-scale solar and battery storage
(Courtesy: Unsplash)

Puerto Rico will add up to 200 megawatts (MW) of solar generation and another 285 MW/1,140 MWh of battery energy storage, thanks to an $861.3 million loan guarantee from the U.S. Department of Energy’s Loan Program Office.

The loan will finance the construction of Project Marahu, consisting of two solar farms equipped with battery storage and two standalone battery energy storage systems (BESS) in the municipalities of Guyama (Jobos) and Salinas. Once completed, the project is meant to help improve the resilience of Puerto Rico’s grid and reduce energy costs by delivering clean power to communities across the island. The PV installations will produce about 460,000 MWh of energy.

The borrower is Clean Flexible Energy, LLC, an indirect subsidiary of the AES Corporation and TotalEnergies Holdings managed under a joint venture agreement between the two companies. Project Marahu will support approximately 750 construction jobs and more than 50 longer-term, full-time jobs. This project is financed through the Energy Infrastructure Reinvestment (EIR) program under Title 17 Clean Energy Financing Section 1706.

Project Marahu will assist in replacing coal energy infrastructure with clean energy facilities. The operation of the solar and storage systems is expected to eventually replace existing fossil fuel-based generation and reduce emissions by nearly 2.7 million tons of CO2e per year, an amount roughly equivalent to the annual emissions of around 533,000 gasoline-powered passenger vehicles. 

Right place, right time

According to the Climate and Economic Justice Screening Tool, the Commonwealth of Puerto Rico, including the communities surrounding the Salinas and Jobos projects, faces some of the greatest energy burdens in the United States. Not only is electricity expensive, it’s unreliable.

Hurricane Maria decimated the commonwealth’s electric grid in 2017; five years later, Hurricane Fiona knocked out power to nearly all of Puerto Rico’s 3 million residents again.

Efforts to stabilize electricity access in the U.S. territory are ongoing and far-reaching.

In 2019, two years after Hurricane Maria dismantled the island’s electric grid, the Puerto Rico Energy Public Policy Act was passed by the legislature to set the parameters for a forward-looking energy system that maximizes distributed generation. The Puerto Rico Energy Bureau determined that virtual power plants (VPPs) were key to achieving the legislation’s goals of building a resilient and robust energy system and meeting Puerto Rico’s renewable portfolio standards.

Sunrun has since aggregated Puerto Rico’s first VPP of solar and storage systems and recently started conducting hour-ahead dispatches for the utility operator, Luma.

“When Luma sees that the supply is going to falter and (it) might have to issue rolling blackouts around the island, they send us a dispatch notice,” explained Chris Rauscher, Sunrun’s head of grid services and virtual power plants. “We push full power to the grid, and that allows them to go into contingency planning and not have to shut off power to people on the island.”

Cleaning up the act

The Puerto Rico Energy Public Policy Act (Act 17) requires Puerto Rico’s utility to cease all coal-fired energy generation by 2028 and shift to a 100% renewable energy mix by 2050.  

Earlier this year, the DOE released a report indicating Puerto Rico can accomplish that goal despite the fact that renewables currently account for only about 3% of the island’s electricity generation, per the U.S. Energy Information Administration. Fossil fuels handle the other 97%.

“This transition will be a substantial effort and won’t happen overnight, but 100% clean energy is 100% possible,” said Agustín Carbó, Puerto Rico’s grid modernization director within the U.S. Department of Energy. The two-year study found that Puerto Rico has more than tenfold the renewable energy resources required to meet the island’s demands through 2050, but new infrastructure capable of generating hundreds of megawatts is needed.

In conjunction with the report, in February the feds announced a program subsidizing residential rooftop solar and battery storage systems for up to 30,000 low-income households on the island.

In November 2023, the DOE said that it would disburse $440 million to install solar panels on low-income homes in Puerto Rico to help the territory in its struggles with ongoing power outages and a crumbling electric grid. Home energy systems have proven exceptionally resilient; Sunnova Energy said that only 59 of its 30,000 rooftop solar arrays required repair in the two weeks following Hurricane Fiona. Sunnova has been active in Puerto Rico since 2013 and has deployed nearly 40,000 batteries, claiming a 100% battery attachment rate since 2018.

In December 2022, President Biden authorized $1 billion for the establishment of the Puerto Rico Energy Resilience Fund (PR-ERF), which is administered by DOE’s Grid Deployment Office. The PR-ERF is a separate federal funding source to drive key investments in renewable and resilient energy infrastructure in Puerto Rico.

Originally published in Renewable Energy World.