DOE Loans Office Will Support Solar, Energy Storage Systems in Puerto Rico

The U.S. Department of Energy (DOE) Loan Programs Office (LPO) on July 18 announced a conditional commitment for a loan guarantee of up to $861.3 million to Clean Flexible Energy, LLC. The money will finance construction of two solar photovoltaic (PV) farms equipped with battery storage, and two standalone battery energy storage systems (BESS), in Puerto Rico. The facilities will be located in the municipalities of Guayama (Jobos) and Salinas and will help deliver power throughout Puerto Rico. Clean Flexible Energy is an indirect subsidiary of AES Corp. and TotalEnergies Holdings USA, and is managed under a joint venture agreement between the two. As part of President Biden’s Investing in America agenda to create jobs in communities across the country, this project will support about 750 construction jobs and more than 50 full-time jobs once fully operational. Thursday’s announcement also reinforces the Biden-Harris administration’s deep commitment to rebuilding and modernizing Puerto Rico’s electric grid. Collectively, the project comprises 200 MW of solar PV and up to 285 MW (1,140 MWh) of standalone BESS capacity. Annually, the solar PV installations will produce about 460,000 MWh of energy, enhancing Puerto Rico’s grid reliability and energy security. The co-location of the new solar and battery resources will help maximize the project’s energy production and improve grid stability. Battery storage will allow the project to continue to provide energy to residents even during adverse weather conditions. The operation of the solar and storage systems––collectively known as Project Marahu––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 some 533,000 gasoline-powered passenger vehicles. Project Marahu will play an integral role in improving Puerto Rico’s energy resilience and affordability while helping Puerto Rico meet its ambitious clean energy and climate goals. The project will support the retirement of fossil fuel power plants reliant on imported fuel, increase renewable energy generation, and enhance grid resilience. The clean, affordable electricity generated by this project will replace the power produced by Puerto Rico’s diesel and coal plants and eliminate the pollution associated with those facilities. The project will generate power directly to Puerto Rico’s grid and provide energy storage benefits necessary for Puerto Rico’s goal of achieving 100% clean energy resources by 2050. The project also supports President Biden’s Justice40 Initiative, which established the goal that 40% of the overall benefits of certain federal investments, including LPO financing, flow to disadvantaged communities, which includes most of Puerto Rico. As part of the Biden-Harris Administration’s efforts to build an equitable and inclusive clean energy future, LPO borrowers are also expected to develop and ultimately implement a comprehensive Community Benefits Plan that ensures meaningful community and labor engagement, improves the well-being of residents and workers, and incorporates strong labor standards during construction, operations, and throughout the life of the loan guarantee. The financing for this project would be through the Energy Infrastructure Reinvestment (EIR) program under Title 17 Clean Energy Financing Section 1706. Created by President Biden’s Inflation Reduction Act, EIR can finance projects that retool, repower, repurpose, or replace energy infrastructure that has ceased operations or enable operating energy infrastructure to avoid, reduce, utilize, or sequester air pollutants or greenhouse gas emissions. In support of President Biden’s efforts to support economic revitalization in energy communities, Project Marahu will assist in retiring and replacing coal energy infrastructure with clean energy facilities, creating new job opportunities while lowering harmful emissions. 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. Today’s announcement is one of many actions DOE has taken to help strengthen Puerto Rico’s grid modernization and energy resiliency. 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. For more information on how Puerto Rico can attain a resilient, 100% renewable grid by 2050, read DOE’s Puerto Rico Grid Resilience and Transitions to 100% Renewable Energy Study (PR100). —POWER edited this content, which was provided by the DOE’s Loan Programs Office.