Almost five years ago, Puerto Rico declared bankruptcy. Or rather, he declared the closest thing to bankruptcy that a state or territory could declare when it announced in 2017 that he would not be able to repay his debts following a devastating hurricane that left the island in hopeless state. Last week, a U.S. federal judge finally approved a deal to bail Puerto Rico out of bankruptcy and help the territory take significant steps toward becoming financially solvent.
“The restructuring plan will reduce the bulk of Puerto Rico‘s government debt — some $33 billion — by about 80%, to $7.4 billion,” The New York Times said. reported Last week. The deal will also save the government more than $50 billion in debt repayments. While the deal is a huge boon for cash-strapped Puerto Rico, the territory still faces serious challenges. The government itself may have secured a bailout, but other public companies, including the Puerto Rico Electric Power Authority (PREPA), remain bankrupt.
One of the many catastrophic effects of 2017’s Category 5 Hurricane Maria marked the complete and utter destruction of the island’s aging and vulnerable power grid. Following the storm, many Puerto Rican residents were left without power for nearly an entire calendar year as part of the the second longest blackout in the world. Even today, nearly five years after the fact, Puerto Rico is still plagued by frequent blackouts, power shortages, and grid outages due to woefully inadequate and outdated infrastructure. In light of this ongoing crisis, the Federal Emergency Management Agency (FEMA) has allocated nearly $10 billion to PREPA to repair the damage. “Federal funding is intended to repair and replace thousands of miles of transmission and distribution lines, electrical substations, power generation systems and other grid improvements,” the American reported. Public Power Association in 2020, upon approval of the aid program.
In 2022, Puerto Rico’s struggles with a reliable energy structure continue. This month, three U.S. federal agencies promised work with local Puerto Rican policymakers to bring the island’s power grid into the 21st century and accelerate efforts to stabilize the island’s energy security. As part of this initiative, these three agencies – the Departments of Energy, Homeland Security, and Housing and Urban Development – officially signed an agreement to begin a clean energy transition in Puerto Rico by 2025, in the goal of achieving a 100% renewable network. in the middle of the century.
The goal is both admirable and ambitious – and perhaps too much. At present, less than 3% of the energy of the American insular territory comes from renewable resources. As part of the United States, Puerto Rico is necessarily part of the Biden administration clean energy goalswhich include achieving net zero carbon emissions across the economy by 2050.
In Puerto Rico, achieving this goal will include a community study known as PR100, to be conducted by the Department of Energy and funded by FEMA, to determine possible pathways for Puerto Rico to achieve 100% renewable energy in just 2050. The final results of this study are expected to be ready by 2024. The PR100 is modeled after LA100, Los Angeles’ 100% Renewable Energy Study, which determined that the city can achieve 100% of renewable electricity by 2045, or even 2035 on an accelerated track. The study also determined that not only are these goals achievable, but that they will benefit air quality and public health “if combined with the electrification of other sectors.”
In Puerto Rico, the federal government hopes that in addition to these benefits, a clean energy transition will bring improving resilience to the island’s ailing power grid. “This administration is making unprecedented investments in communities to help them adapt and become more resilient,” US Homeland Secretary Alejandro Mayorkas said in a statement. “We will continue to provide the resources necessary to achieve these goals.” The necessary overhaul of Puerto Rico’s energy system places the island in a unique and ideal position to be the country’s 100% clean energy guinea pig. If the Biden administration delivers on its promises on the island, Puerto Rico could find itself at the forefront of the global clean energy movement. At least 138 energy-related projects are expected to begin construction in Puerto Rico this year.
By Haley Zaremba for Oilprice.com
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