New renewable-energy legislation called ‘critical’ for project’s success
Florida-based Yarotek LLC is negotiating to build what would be the island’s largest solar power plant, a 50-megawatt facility in Aguadilla, officials said.
Company representatives have been negotiating with top Fortuño administration officials and the Puerto Rico Electric Power Authority (Prepa by its Spanish acronym) for the past six months over site location and the terms of a power-purchase agreement. Officials are discussing the possible use of government-owned land for the project.
Lyon Roth, Yarotek’s principal officer, said the recent passage of an energy reform bill was “critical” for outside investors to develop projects on the island. The Energy Diversification & Sustainable Renewable Energy Law sets mandatory benchmarks obligating the government to reduce conventional energy production and increase renewable energy to 12% by 2015, 15% by 2020 and 20% by 2035.
To incentivize the development of large-scale renewable-energy projects, the law also creates renewable-energy certificates (RECs), which will be granted to projects for each megawatt hour of renewable energy they produce. Each certificate will have a real monetary value, and producers can trade them both locally and in the U.S. market that is developing around such green credits.
“It’s a tremendous credit to the Legislature and the governor for enabling entrepreneurs and developers to look at Puerto Rico,” Roth said. “The legislation has renewable-energy certificates that can be traded across the United States. That is a really big deal. We don’t know what values to put on those credits yet. It’s a testament that Puerto Rico has really integrated with the rest of the country.”
Roth said that in order to comply with future renewable power goals, the island could aim to develop more than a gigawatt of solar power capacity.
Roth explained that Yarotek uses Israeli technology called solar thermal technology that has been deployed with success in Israel and across the world. The solar thermal technology was developed by Solel, an Israeli company that last year was acquired by Siemens.
“Generally speaking, Prepa, to its credit, understands there have been renewable-energy standards signed,” he said. “Our reception from the government has been extraordinary.”
Roth traveled to Puerto Rico last week along with an Israeli delegation looking to drum up business opportunities on the island. The trip was headed by Ofer Bavly, the Israeli Consul General for Florida and Puerto Rico.
Other renewable-energy projects under development include:
- A 75-megawatt wind farm along the island’s south coast in Santa Isabel being developed by a subsidiary of Pattern Energy Group is expected to come online in late 2011. A 20-year power-purchase agreement between Prepa and Pattern calls for the public utility to buy power at 12.5 cents per kilowatt-hour (kWh), with the cost increasing 1.5% annually throughout the contract’s life. The Pattern Santa Isabel Wind Project will generate power for the needs of up to 25,000 Puerto Rican homes, officials said.
- AES Illumina is developing a $70 million, a 20-megawatt solar project in Guayama that will use polycrystalline photovoltaic panels, which are among the most cost-effective being produced today. Prepa pledged in a 20-year contract to buy the power at the rate of 13 cents per kWh. The project will take advantage of ARRA (American Recovery & Reinvestment Act) incentives, as well as Puerto Rico government incentives under Law 73 (the Economic Incentives for the Development of Puerto Rico Act).
- WindMar is developing a 30-megawatt wind farm in Guayanilla that finally won Planning Board clearance in March. The project could increase to 45 megawatts and could add a solar component as well. The project is slated to break ground this year and should be operational by 2011. Some $7 million has already been invested and total project costs are $80 million.
The company is also developing a 4.5-megawatt solar project in Ponce.