Renewable Electricity Technologies To Increase the Resilience
Transcript Of Renewable Electricity Technologies To Increase the Resilience
Office of the Chief Economist U.S. DEPARTMENT OF AGRICULTURE
Office of the Chief Economist
Renewable Electricity Technologies to Increase the Resilience of the Food Supply System in Puerto Rico
November 2020
How to Obtain Copies: You may electronically download this document from the U.S. Department of Agriculture’s (USDA’s) web site at: https://www.usda.gov/sites/default/files/documents/Renewable-Electricity-Technologies-for-Puerto-Rico-Food-Supply-
Resilience.pdf For Further Information, Contact: Irene Margaret Xiarchos, USDA Economist ([email protected]) Jan Lewandrowski, USDA Project Manager ([email protected]) Bill Hohenstein, Director, USDA Office of Energy and Environmental Policy ([email protected]) Diana Pape, ICF Project Manager ([email protected])
Suggested Citation: Garffer, Patricia, C. Schultz, I. M. Xiarchos, W. Rojowsky, P. D’Costa, D. Man, J. Lewandrowski, D. Pape, 2020. Renewable Electricity Technologies to Increase the Resilience of the Food Supply System in Puerto Rico. USDA,
Office of the Chief Economist. November 2020.
Any views presented in this paper are those of the authors and do not represent the views of USDA or ICF. Use of commercial and trade name does not imply approval or constitute endorsement by USDA. USDA is an equal opportunity provider, employer, and lender.
Source of Image on Report Cover: Juwi, 2014.
RENEWABLE ELECTRICITY TECHNOLOGIES TO INCREASE THE RESILIENCE OF THE FOOD SUPPLY SYSTEM IN PUERTO RICO
Table of Contents
Introduction ........................................................................................................ 1 Profile of Electricity in Puerto Rico .................................................................. 2
Resilience Challenges .............................................................................................................. 2 Present Electricity Generation Sources .................................................................................... 2 Plans for More Renewable Generation..................................................................................... 4
Critical Power Needs of Puerto Rico’s Food Supply Sectors ........................ 5
Definition of Critical Versus Non-Critical Electricity Uses......................................................... 5 Food Supply Activities with Significant Critical Power Needs .................................................. 6 Electricity Vulnerabilities ........................................................................................................... 7
Renewable Electricity Technologies to Increase Resilience .......................... 7
Modes of Operation for On-Site Electricity Generation ............................................................ 8 Two Modes of Operation ................................................................................................... 8 Microgrid Operations and Examples ................................................................................. 8
Renewable Technology Descriptions ....................................................................................... 9 Solar Energy ...................................................................................................................... 9 Wind Energy .................................................................................................................... 10 Battery Energy Storage ................................................................................................... 11 Biomass Electricity........................................................................................................... 11
Renewable Technology Economics........................................................................................ 12 Overview .......................................................................................................................... 12 System Costs................................................................................................................... 12
Matching Renewable Technologies to Food Supply Resilience Needs ................................. 14
Conclusions: Implementing Resilient Renewable Electricity....................... 16 Appendix: Interviews Conducted.................................................................... 18 References ........................................................................................................ 19
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RENEWABLE ELECTRICITY TECHNOLOGIES TO INCREASE THE RESILIENCE OF THE FOOD SUPPLY SYSTEM IN PUERTO RICO
Introduction
This paper describes the challenges and potential opportunities for using renewable electricity technologies to increase the resilience of Puerto Rico’s food supply system (including commodity production, processing, storage, and distribution) to prolonged (2 days to 6 months) utility power outages. This need is essential because the island’s grid electricity has proven to be very susceptible to long-run outages related to severe weather and geologic events (e.g., Hurricanes Irma and Maria in 2017 and earthquakes in 2019 and 2020) as well as outages related to aging and poorly maintained infrastructure. Hurricane Maria destroyed more than 80 percent of Puerto Rico’s crop value, with infrastructure damages of $1.8 billion in Puerto Rico’s agricultural sector (PR DOH, 2019, p. 83; USDA, 2018).
As background for this paper, ICF held a series of discussions with officials in Puerto Rico with expertise in the island’s food supply. These experts include U.S. Department of Agriculture (USDA) staff in Puerto Rico serving the Caribbean Climate Hub, Rural Development (RD), and Natural Resources Conservation Service (NRCS) programs and representatives from agricultural trade groups and academia (see Appendix). Across these conversations, there was general consensus on the following points. First, Puerto Rico’s future economic growth, including the success of agriculture and the food supply system, depends on improving the stability and resilience of electricity supply. Second, achieving this stability and resilience will require investing in electricity systems that are designed and built to endure major disruptions, contain impacts when disruptions do occur, recover quickly, and deliver adequate power quality throughout the year. Third, investments in Puerto Rico’s electricity supply should emphasize keeping costs predictable and manageable; maximizing use of local resources to reduce dependence on imported oil and liquified natural gas; and facilitating environmental improvements. Finally, there was a recognition that Puerto Rico’s electricity infrastructure is outdated and not well maintained. While a new electric utility governance framework is under consideration, progress has been slowed by its projected cost of up to $20 billion and long-run declining electricity demand on the island due to depopulation.
Because renewable technologies can play an important role in enhancing the stability and resilience of electricity supply in Puerto Rico, particularly in rural areas and for industries in the food system, USDA’s Office of Energy and Environmental Policy (in the Office of the Chief Economist) and ICF collaborated to produce this paper. It is organized as follows:
• Puerto Rico Electricity Profile • Critical Power Needs of Food Supply Sectors • Renewable Electricity Technologies to Increase Resilience • Conclusion: Implementing Resilient Renewable Electricity
Though the descriptions and examples in the paper cover a range of agricultural production and food supply activities in Puerto Rico, the term food supply system is used to cover all activities collectively.
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RENEWABLE ELECTRICITY TECHNOLOGIES TO INCREASE THE RESILIENCE OF THE FOOD SUPPLY SYSTEM IN PUERTO RICO
Profile of Electricity in Puerto Rico
Agricultural sector electricity needs operate against the backdrop of the electric grid in Puerto Rico. The grid is operated by the Puerto Rico Electric Power Authority (PREPA), which is a governmentowned utility.
RESILIENCE CHALLENGES
PREPA, which had $9 billion in debt when it declared bankruptcy in 2017, has historically struggled to maintain its grid. The median age of PREPA’s power plants was 44 years, compared to a U.S. industry average of 18 years at that time (PREPA, 2017, p. 10). Even before the 2017 hurricanes, the frequency of utility power outages was “an order of magnitude higher than the U.S. average” (DOE, 2018a, p. 13). Beyond aging infrastructure, PREPA’s system has several features that reduce resilience, including (i) its status as an island system that lacks interconnection with neighboring systems for stability, (ii) reliance on overhead lines on its distribution system that are challenged to withstand strong hurricanes, (iii) the need to “traverse mountainous, densely vegetated terrain” to move power from where it is primarily generated (southern portion of the island) to San Juan in the north, and (iv) the lack of a transmission load flow model (PREPA, 2019, p. 34). In addition, almost 40 percent of PREPA’s workforce, primarily skilled generation, transmission, and distribution operations staff, have left since 2008 (PREPA, 2019, p. 30; DOE, 2018a, p. 40). In 2017, Hurricanes Irma and Maria damaged or destroyed 80 percent of the island’s transmission and distribution power lines (EIA, 2019). The largest power generation facilities were operational within weeks after Hurricane Maria, but they could not supply power until the utility’s transmission and distribution networks were repaired (Gallucci, 2018).1 Hurricane Maria caused the longest power outage in U.S. history, as parts of Puerto Rico remained without electricity for 328 days (Government of Puerto Rico et al., n.d., p. 2). A significant modernization plan for the PREPA system is being considered, but it is estimated to cost up to $20 billion and take 10 years to implement (Government of Puerto Rico, et al., n.d., p. 9).
PRESENT ELECTRICITY GENERATION SOURCES
Power supply in Puerto Rico is largely dependent on fossil fuels, with renewable sources only accounting for about 7 percent of utility-scale generating capacity as shown in Exhibit 1.2
1 “Transmission networks consist of high-voltage power lines designed to carry power efficiently over long distances. Distribution networks deliver power at lower voltages and over shorter distances to the consumer” (EPA, 2019, p. 2). Vertically-integrated utilities like PREPA operate both transmission and distribution networks. 2 These data are for net summer capacity and do not include distributed generation systems. Total net summer capacity as of February 2020 was 5,791 megawatts (MW) (EIA, 2020a).
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RENEWABLE ELECTRICITY TECHNOLOGIES TO INCREASE THE RESILIENCE OF THE FOOD SUPPLY SYSTEM IN PUERTO RICO
EXHIBIT 1: Puerto Rico Utility-Scale Electricity Generation Capacity by Source
Wind, 1.71% Hydro, 1.69% Solar, 2.68%
Coal, 7.84%
Battery, 0.54%
Landfill Gas, 0.03%
Natural Gas, 23.24%
Petroleum, 62.28%
Source: Based on U.S. Energy Information Administration: EIA, 2020a.
While Exhibit 1 shows the capacity of utility-scale generating units on the island, it is also useful to review annual electricity production in Exhibit 2. EXHIBIT 2: Puerto Rico Electricity Production by Source
Renewables, 2%
Coal, 18%
Natural Gas, 39%
Petroleum, 40%
Source: Based on U.S. Energy Information Administration: EIA, 2020b.
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RENEWABLE ELECTRICITY TECHNOLOGIES TO INCREASE THE RESILIENCE OF THE FOOD SUPPLY SYSTEM IN PUERTO RICO
Because renewable sources like wind and solar are intermittent (since the amount of available wind and sunlight varies throughout the day and year), they tend to produce at or near peak capacity less often than fossil fuel power plants. That is why renewable sources account for only 2.3 percent of electricity production, but a larger share of generating capacity (EIA, 2020b).3 In comparison, more than 17 percent of total U.S. utility-scale electricity production is from renewable sources, including 7 percent from hydropower (EIA, 2020c). The fossil fuel-dependent generation mix of Puerto Rico also results in high greenhouse gas (GHG) emissions rates on the island. Due to PREPA's heavy reliance on imported petroleum and imported liquified natural gas, Puerto Rican electricity prices fluctuate along with international fossil fuel prices and are higher than those of every State in the continental United States. Electricity in Puerto Rico costs more than twice the U.S. average, with residential and commercial customer electricity prices as of early 2020 being $0.27/kilowatt-hour (kWh) and $0.30/kWh, respectively, on the island compared to $0.13/kWh and $0.10/kWh across the U.S. (EIA, 2020b).
PLANS FOR MORE RENEWABLE GENERATION
Regulation 9021 of the Puerto Rico Energy Transformation and RELIEF Act was adopted in 2018 and requires that PREPA develop an Integrated Resource Plan (IRP). The IRP aims to provide transparency into electricity planning, optimize resource cost-effectiveness, and meet environmental regulations (Siemens, 2019, p. 2-3). One IRP scenario included in PREPA’s 2019 fiscal plan forecasts that in the next 4 years, Puerto Rico’s annual electricity production would be generated with a mix of 35 percent renewables, 35 percent natural gas, 21 percent coal, and 9 percent petroleum (PREPA, 2019, p. 21). For the longer term, Puerto Rico’s new energy public policy includes a minimum of 40 percent renewable electricity on or before 2025; 60 percent on or before 2040; and 100 percent on or before 2050 (SB 1121, 2019). This transition to 100 percent renewable electricity is envisioned to leverage both centrally located, utility-scale units to serve island-wide needs and smaller scale distributed generation, particularly solar photovoltaic (PV) and battery storage, at individual households and businesses (SB 1121, 2019; RPRAC, 2018, p. A28).4 In pursuing more renewable power on the island, the greatest commercially available potential is from solar and wind resources as shown in Exhibit 3.5
3 Renewable energy sources are grouped together in Exhibit 2, as opposed to the break-out by renewable energy technology in Exhibit 1. 4 As of mid-2017, there were 88 MW of distributed generation on the island (RPRAC, 2018, p. A25). 5 Ocean energy production, which involves a nascent technology, is not included in this table. The National Renewable Energy Laboratory (NREL) notes high potential for it (NREL, 2015, p. 3).
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RENEWABLE ELECTRICITY TECHNOLOGIES TO INCREASE THE RESILIENCE OF THE FOOD SUPPLY SYSTEM IN PUERTO RICO
EXHIBIT 3: Puerto Rico’s Renewable Energy Potential
Resource
Potential Generating Capacity (MW)
Solar
1,100
Wind
840
Biomass
290 to 6,8006
Hydropower
103
Geothermal
Unknown, likely very low
Source: National Renewable Energy Laboratory: NREL, 2015, p. 3.
Critical Power Needs of Puerto Rico’s Food Supply Sectors
In Puerto Rico as of 2018, there were approximately 8,200 agricultural farms generating $485 million in annual agricultural product sales, with additional economic activity occurring across the island’s food supply chain (USDA, 2020a, p. 16).7
Prior to the 2017 hurricanes, on-island production accounted for 15 percent of Puerto Rico’s food supply (USDA, 2015). In the aftermath of the hurricanes, that figure declined to 5 percent (FAO, 2018). From the hurricanes, “crops were decimated by wind and flooding, mudslides in the mountainous interior took out many of the roads critical to agricultural production,” and substantial livestock was lost (PR DOH, 2019, p. 83). The significant impact of the storms can also be seen in differences between 2012 and 2018 in key capital and labor inputs to agriculture in Puerto Rico: the aggregate market value of land and buildings decreased by more than $1 billion, while the aggregate value of machinery and equipment increased by approximately $70 million and per-farm labor costs increased as farms sought to rebuild and recover (USDA, 2020a, pp. 13-14).
Before considering electricity resilience options, it is important to carefully define the problems. For Puerto Rico’s food supply activities -- growing food as well as processing, storing, and distributing food on the island – the problems of unreliable power do not equally affect all parts of the industry or all electricity uses.
In this section, critical vs. non-critical power needs are distinguished, types of food supply businesses with especially high dependence on electricity resilience are highlighted, and future electricity vulnerabilities for food supply firms are summarized.
DEFINITION OF CRITICAL VERSUS NON-CRITICAL ELECTRICITY USES
Critical electricity uses are those for which interruptions result in lost business or production capacity, idled workforce, loss of product, damaged equipment, and compromised health and safety (Schneider Electric, 2015). It is important that critical uses continue to have uninterrupted power, even during grid outages.
In the context of food supply, refrigeration for perishable foods, water pumping for livestock operations, and power uses that ensure the safety of humans, animals, and valuable assets can be considered critical electricity uses. Non-critical electricity uses are those that enhance or
6 “The lower limit is traditional agricultural biomass, and the upper limit assumes that microalgae is commercially viable and in widespread use at maximum capacity” (NREL, 2015, p. 3). 7 The number of farms in Puerto Rico in 2012 Census of Agriculture data was much higher, at more than 13,000. The value of agricultural products sold by Puerto Rico farms was also higher in 2012, at almost $550 million (USDA, 2020a, p. 16).
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RENEWABLE ELECTRICITY TECHNOLOGIES TO INCREASE THE RESILIENCE OF THE FOOD SUPPLY SYSTEM IN PUERTO RICO
facilitate operations, but whose constant availability is not necessary to maintain the ongoing functions of the business. Examples of non-critical electricity uses in agriculture could be air conditioning, lighting for offices, and maintenance equipment.
FOOD SUPPLY ACTIVITIES WITH SIGNIFICANT CRITICAL POWER NEEDS
Our background discussions with USDA officials, trade association representatives, and agricultural experts in academia highlighted several critical power requirements in Puerto Rico’s food system. Much of Puerto Rico’s food production for local consumption is perishable, thus heightened electricity resilience is needed in many parts of the food system. Across all agricultural commodities in Puerto Rico, milk and other dairy have the highest annual sales at $172 million, followed by grains or field crops; plantains; cattle; nursery and greenhouse crops; vegetables and melons including hydroponic crops; and poultry (USDA, 2020a, p. 16).
The most commonly cited critical power need is in the dairy sector, which is Puerto Rico’s largest livestock sector. On a gross income basis, the dairy sector comprises 62 percent of the island’s livestock industries (Ortiz-Colón, 2018, p. 3). The dairy sector lost 55 percent of its production at the farm after the 2017 hurricanes, and incurred significant losses throughout the entire supply chain due to damaged business assets and transportation infrastructure, electricity outages, and purchase program closures (Ortiz-Colón, 2018, pp. 16-17).8 Four months after the hurricanes ended, 60 percent of dairy farmers still did not have utility power (Ortiz-Colón, 2018, p. 21). Without power, many had to use emergency diesel generators, which tripled their energy costs (Ortiz-Colón, 2018, p. 21). The dairy sector’s incidence of critical electricity use is high due to regular milking demands and the need for refrigeration. Even short lapses in power supply can lead to spoiled milk or endanger cow health when cows cannot be milked on a regular schedule.
Another critical power use in Puerto Rico’s livestock sector is in poultry operations. They require cooling fans due to the high-density, confined nature of their facilities and the island’s high yearround temperatures. Because poultry farms can be exposed to high animal mortality during multiday outages, cooling is a critical use. On a relative basis, poultry and egg farms are more likely to implement solar energy technologies than other types of farms in Puerto Rico (USDA, 2020a, pp. 117-118).
In the coffee industry, processing plants have a critical power use because coffee beans must be dried within a short time of being picked to avoid degradation. Coffee processing facilities tend to be in the mountains, near coffee farms, where they are exposed to more frequent electricity outages than facilities in coastal parts of the island. Other agricultural activities in mountain areas face similar power shortfalls, as the high concentration of the island’s population and power plants in coastal areas often leads to faster power restoration on the coasts than inland areas.
Food intermediaries must keep produce and animal products refrigerated during packing and distribution processes to maintain freshness and avoid spoilage. For these firms, refrigeration is a critical electricity use, as prolonged outages result in considerable losses.
Due to the frequency of PREPA power outages affecting agricultural activities, there has already been a trend, starting long before the 2017 hurricanes, toward the installation of on-site, back-up diesel generators to provide emergency power at farms and food processing facilities. As the cost of renewable power has decreased in recent years, deployment of renewable back-up
8 4,200 cows were lost due to the 2017 hurricanes (PR DOH, 2019, p. 83).
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RENEWABLE ELECTRICITY TECHNOLOGIES TO INCREASE THE RESILIENCE OF THE FOOD SUPPLY SYSTEM IN PUERTO RICO
power systems and hybrid renewable-diesel systems has increased, though diesel-only systems remain the most common solution.
ELECTRICITY VULNERABILITIES
Puerto Rico is especially vulnerable to disruptions in its food system, due to several factors:
• Heavy reliance on food imports (85 percent of the food it consumes is imported9, with that figure rising to 95 percent after the 2017 hurricanes) (FAO, 2018)
• Use of a single seaport in San Juan for most food imports • Exposure of many critical domestic food system components to outages in grid-supplied
electricity (Port Authority, 2017, p. 4)
Going forward, the island is likely to face continued major risks to its electricity grid due to hurricanes, earthquakes, cybersecurity issues, and the condition of its grid infrastructure. According to the most recent National Climate Assessment, intense tropical cyclones -- such as Category 4 and 5 hurricanes – are likely to affect Puerto Rico with increased frequency over the course of the 21st century (U.S. Global Change Research Program, 2017, Chapter 9). Puerto Rico is also at longterm risk of damaging earthquakes, given the island’s location at the boundary between the Caribbean and North American tectonic plates. The island’s ongoing earthquake hazard is approximately on par with much of the U.S. West Coast (Pagani, et al., 2018; Mueller, et al., 2010). As demonstrated by earthquakes in southwest Puerto Rico in late 2019 and early 2020, future earthquakes have the potential to result in long-term power outages.
Lastly, PREPA’s aging infrastructure magnifies its susceptibility to (i) major outages related to natural hazard events, and (ii) additional outages related to failures of degraded system components. In a regulatory proceeding, PREPA described an “ailing grid,” “degraded infrastructure,” and a “deteriorated” transmission system (DOE, 2018a, p. 12). While additional investments have been proposed for the PREPA electric grid, these plans have yet to be approved. After approval, implementation would take 10 years (Government of Puerto Rico, et al., n.d., p. 9).10 Furthermore, the utility’s long-term plan foresees agricultural electricity consumption from the grid continuing to decrease for the next 18 years, due largely to depopulation and its effects on island economic growth (Siemens, 2019, p. 3-10).
Given the vulnerabilities described above, it is worth considering the ways in which renewable electricity technologies might increase the resilience of Puerto Rico’s electricity supply.
Renewable Electricity Technologies to Increase Resilience
This section summarizes the operation and cost of wind, solar, and biomass renewable electricity systems that may be available to farms, firms in other parts of the food system, and rural communities in Puerto Rico.
9 Puerto Rico’s food imports come from 52 countries, with about 80 percent of the food import shipping originating from the port in Jacksonville, Florida (USDA, 2015). 10 Puerto Rico’s electricity grid also faces risks of long-term power outages from cyber attacks, like other U.S. power grids. These risks increase the importance of resilience for critical power needs nationally. The deployment of more advanced technologies on grids may provide more avenues for power outages. Specifically, “interoperable technologies created for a shift toward a smart grid will continue to expand the cyber attack landscape” (INL, 2016, p. ii).
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Office of the Chief Economist
Renewable Electricity Technologies to Increase the Resilience of the Food Supply System in Puerto Rico
November 2020
How to Obtain Copies: You may electronically download this document from the U.S. Department of Agriculture’s (USDA’s) web site at: https://www.usda.gov/sites/default/files/documents/Renewable-Electricity-Technologies-for-Puerto-Rico-Food-Supply-
Resilience.pdf For Further Information, Contact: Irene Margaret Xiarchos, USDA Economist ([email protected]) Jan Lewandrowski, USDA Project Manager ([email protected]) Bill Hohenstein, Director, USDA Office of Energy and Environmental Policy ([email protected]) Diana Pape, ICF Project Manager ([email protected])
Suggested Citation: Garffer, Patricia, C. Schultz, I. M. Xiarchos, W. Rojowsky, P. D’Costa, D. Man, J. Lewandrowski, D. Pape, 2020. Renewable Electricity Technologies to Increase the Resilience of the Food Supply System in Puerto Rico. USDA,
Office of the Chief Economist. November 2020.
Any views presented in this paper are those of the authors and do not represent the views of USDA or ICF. Use of commercial and trade name does not imply approval or constitute endorsement by USDA. USDA is an equal opportunity provider, employer, and lender.
Source of Image on Report Cover: Juwi, 2014.
RENEWABLE ELECTRICITY TECHNOLOGIES TO INCREASE THE RESILIENCE OF THE FOOD SUPPLY SYSTEM IN PUERTO RICO
Table of Contents
Introduction ........................................................................................................ 1 Profile of Electricity in Puerto Rico .................................................................. 2
Resilience Challenges .............................................................................................................. 2 Present Electricity Generation Sources .................................................................................... 2 Plans for More Renewable Generation..................................................................................... 4
Critical Power Needs of Puerto Rico’s Food Supply Sectors ........................ 5
Definition of Critical Versus Non-Critical Electricity Uses......................................................... 5 Food Supply Activities with Significant Critical Power Needs .................................................. 6 Electricity Vulnerabilities ........................................................................................................... 7
Renewable Electricity Technologies to Increase Resilience .......................... 7
Modes of Operation for On-Site Electricity Generation ............................................................ 8 Two Modes of Operation ................................................................................................... 8 Microgrid Operations and Examples ................................................................................. 8
Renewable Technology Descriptions ....................................................................................... 9 Solar Energy ...................................................................................................................... 9 Wind Energy .................................................................................................................... 10 Battery Energy Storage ................................................................................................... 11 Biomass Electricity........................................................................................................... 11
Renewable Technology Economics........................................................................................ 12 Overview .......................................................................................................................... 12 System Costs................................................................................................................... 12
Matching Renewable Technologies to Food Supply Resilience Needs ................................. 14
Conclusions: Implementing Resilient Renewable Electricity....................... 16 Appendix: Interviews Conducted.................................................................... 18 References ........................................................................................................ 19
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RENEWABLE ELECTRICITY TECHNOLOGIES TO INCREASE THE RESILIENCE OF THE FOOD SUPPLY SYSTEM IN PUERTO RICO
Introduction
This paper describes the challenges and potential opportunities for using renewable electricity technologies to increase the resilience of Puerto Rico’s food supply system (including commodity production, processing, storage, and distribution) to prolonged (2 days to 6 months) utility power outages. This need is essential because the island’s grid electricity has proven to be very susceptible to long-run outages related to severe weather and geologic events (e.g., Hurricanes Irma and Maria in 2017 and earthquakes in 2019 and 2020) as well as outages related to aging and poorly maintained infrastructure. Hurricane Maria destroyed more than 80 percent of Puerto Rico’s crop value, with infrastructure damages of $1.8 billion in Puerto Rico’s agricultural sector (PR DOH, 2019, p. 83; USDA, 2018).
As background for this paper, ICF held a series of discussions with officials in Puerto Rico with expertise in the island’s food supply. These experts include U.S. Department of Agriculture (USDA) staff in Puerto Rico serving the Caribbean Climate Hub, Rural Development (RD), and Natural Resources Conservation Service (NRCS) programs and representatives from agricultural trade groups and academia (see Appendix). Across these conversations, there was general consensus on the following points. First, Puerto Rico’s future economic growth, including the success of agriculture and the food supply system, depends on improving the stability and resilience of electricity supply. Second, achieving this stability and resilience will require investing in electricity systems that are designed and built to endure major disruptions, contain impacts when disruptions do occur, recover quickly, and deliver adequate power quality throughout the year. Third, investments in Puerto Rico’s electricity supply should emphasize keeping costs predictable and manageable; maximizing use of local resources to reduce dependence on imported oil and liquified natural gas; and facilitating environmental improvements. Finally, there was a recognition that Puerto Rico’s electricity infrastructure is outdated and not well maintained. While a new electric utility governance framework is under consideration, progress has been slowed by its projected cost of up to $20 billion and long-run declining electricity demand on the island due to depopulation.
Because renewable technologies can play an important role in enhancing the stability and resilience of electricity supply in Puerto Rico, particularly in rural areas and for industries in the food system, USDA’s Office of Energy and Environmental Policy (in the Office of the Chief Economist) and ICF collaborated to produce this paper. It is organized as follows:
• Puerto Rico Electricity Profile • Critical Power Needs of Food Supply Sectors • Renewable Electricity Technologies to Increase Resilience • Conclusion: Implementing Resilient Renewable Electricity
Though the descriptions and examples in the paper cover a range of agricultural production and food supply activities in Puerto Rico, the term food supply system is used to cover all activities collectively.
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RENEWABLE ELECTRICITY TECHNOLOGIES TO INCREASE THE RESILIENCE OF THE FOOD SUPPLY SYSTEM IN PUERTO RICO
Profile of Electricity in Puerto Rico
Agricultural sector electricity needs operate against the backdrop of the electric grid in Puerto Rico. The grid is operated by the Puerto Rico Electric Power Authority (PREPA), which is a governmentowned utility.
RESILIENCE CHALLENGES
PREPA, which had $9 billion in debt when it declared bankruptcy in 2017, has historically struggled to maintain its grid. The median age of PREPA’s power plants was 44 years, compared to a U.S. industry average of 18 years at that time (PREPA, 2017, p. 10). Even before the 2017 hurricanes, the frequency of utility power outages was “an order of magnitude higher than the U.S. average” (DOE, 2018a, p. 13). Beyond aging infrastructure, PREPA’s system has several features that reduce resilience, including (i) its status as an island system that lacks interconnection with neighboring systems for stability, (ii) reliance on overhead lines on its distribution system that are challenged to withstand strong hurricanes, (iii) the need to “traverse mountainous, densely vegetated terrain” to move power from where it is primarily generated (southern portion of the island) to San Juan in the north, and (iv) the lack of a transmission load flow model (PREPA, 2019, p. 34). In addition, almost 40 percent of PREPA’s workforce, primarily skilled generation, transmission, and distribution operations staff, have left since 2008 (PREPA, 2019, p. 30; DOE, 2018a, p. 40). In 2017, Hurricanes Irma and Maria damaged or destroyed 80 percent of the island’s transmission and distribution power lines (EIA, 2019). The largest power generation facilities were operational within weeks after Hurricane Maria, but they could not supply power until the utility’s transmission and distribution networks were repaired (Gallucci, 2018).1 Hurricane Maria caused the longest power outage in U.S. history, as parts of Puerto Rico remained without electricity for 328 days (Government of Puerto Rico et al., n.d., p. 2). A significant modernization plan for the PREPA system is being considered, but it is estimated to cost up to $20 billion and take 10 years to implement (Government of Puerto Rico, et al., n.d., p. 9).
PRESENT ELECTRICITY GENERATION SOURCES
Power supply in Puerto Rico is largely dependent on fossil fuels, with renewable sources only accounting for about 7 percent of utility-scale generating capacity as shown in Exhibit 1.2
1 “Transmission networks consist of high-voltage power lines designed to carry power efficiently over long distances. Distribution networks deliver power at lower voltages and over shorter distances to the consumer” (EPA, 2019, p. 2). Vertically-integrated utilities like PREPA operate both transmission and distribution networks. 2 These data are for net summer capacity and do not include distributed generation systems. Total net summer capacity as of February 2020 was 5,791 megawatts (MW) (EIA, 2020a).
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RENEWABLE ELECTRICITY TECHNOLOGIES TO INCREASE THE RESILIENCE OF THE FOOD SUPPLY SYSTEM IN PUERTO RICO
EXHIBIT 1: Puerto Rico Utility-Scale Electricity Generation Capacity by Source
Wind, 1.71% Hydro, 1.69% Solar, 2.68%
Coal, 7.84%
Battery, 0.54%
Landfill Gas, 0.03%
Natural Gas, 23.24%
Petroleum, 62.28%
Source: Based on U.S. Energy Information Administration: EIA, 2020a.
While Exhibit 1 shows the capacity of utility-scale generating units on the island, it is also useful to review annual electricity production in Exhibit 2. EXHIBIT 2: Puerto Rico Electricity Production by Source
Renewables, 2%
Coal, 18%
Natural Gas, 39%
Petroleum, 40%
Source: Based on U.S. Energy Information Administration: EIA, 2020b.
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RENEWABLE ELECTRICITY TECHNOLOGIES TO INCREASE THE RESILIENCE OF THE FOOD SUPPLY SYSTEM IN PUERTO RICO
Because renewable sources like wind and solar are intermittent (since the amount of available wind and sunlight varies throughout the day and year), they tend to produce at or near peak capacity less often than fossil fuel power plants. That is why renewable sources account for only 2.3 percent of electricity production, but a larger share of generating capacity (EIA, 2020b).3 In comparison, more than 17 percent of total U.S. utility-scale electricity production is from renewable sources, including 7 percent from hydropower (EIA, 2020c). The fossil fuel-dependent generation mix of Puerto Rico also results in high greenhouse gas (GHG) emissions rates on the island. Due to PREPA's heavy reliance on imported petroleum and imported liquified natural gas, Puerto Rican electricity prices fluctuate along with international fossil fuel prices and are higher than those of every State in the continental United States. Electricity in Puerto Rico costs more than twice the U.S. average, with residential and commercial customer electricity prices as of early 2020 being $0.27/kilowatt-hour (kWh) and $0.30/kWh, respectively, on the island compared to $0.13/kWh and $0.10/kWh across the U.S. (EIA, 2020b).
PLANS FOR MORE RENEWABLE GENERATION
Regulation 9021 of the Puerto Rico Energy Transformation and RELIEF Act was adopted in 2018 and requires that PREPA develop an Integrated Resource Plan (IRP). The IRP aims to provide transparency into electricity planning, optimize resource cost-effectiveness, and meet environmental regulations (Siemens, 2019, p. 2-3). One IRP scenario included in PREPA’s 2019 fiscal plan forecasts that in the next 4 years, Puerto Rico’s annual electricity production would be generated with a mix of 35 percent renewables, 35 percent natural gas, 21 percent coal, and 9 percent petroleum (PREPA, 2019, p. 21). For the longer term, Puerto Rico’s new energy public policy includes a minimum of 40 percent renewable electricity on or before 2025; 60 percent on or before 2040; and 100 percent on or before 2050 (SB 1121, 2019). This transition to 100 percent renewable electricity is envisioned to leverage both centrally located, utility-scale units to serve island-wide needs and smaller scale distributed generation, particularly solar photovoltaic (PV) and battery storage, at individual households and businesses (SB 1121, 2019; RPRAC, 2018, p. A28).4 In pursuing more renewable power on the island, the greatest commercially available potential is from solar and wind resources as shown in Exhibit 3.5
3 Renewable energy sources are grouped together in Exhibit 2, as opposed to the break-out by renewable energy technology in Exhibit 1. 4 As of mid-2017, there were 88 MW of distributed generation on the island (RPRAC, 2018, p. A25). 5 Ocean energy production, which involves a nascent technology, is not included in this table. The National Renewable Energy Laboratory (NREL) notes high potential for it (NREL, 2015, p. 3).
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RENEWABLE ELECTRICITY TECHNOLOGIES TO INCREASE THE RESILIENCE OF THE FOOD SUPPLY SYSTEM IN PUERTO RICO
EXHIBIT 3: Puerto Rico’s Renewable Energy Potential
Resource
Potential Generating Capacity (MW)
Solar
1,100
Wind
840
Biomass
290 to 6,8006
Hydropower
103
Geothermal
Unknown, likely very low
Source: National Renewable Energy Laboratory: NREL, 2015, p. 3.
Critical Power Needs of Puerto Rico’s Food Supply Sectors
In Puerto Rico as of 2018, there were approximately 8,200 agricultural farms generating $485 million in annual agricultural product sales, with additional economic activity occurring across the island’s food supply chain (USDA, 2020a, p. 16).7
Prior to the 2017 hurricanes, on-island production accounted for 15 percent of Puerto Rico’s food supply (USDA, 2015). In the aftermath of the hurricanes, that figure declined to 5 percent (FAO, 2018). From the hurricanes, “crops were decimated by wind and flooding, mudslides in the mountainous interior took out many of the roads critical to agricultural production,” and substantial livestock was lost (PR DOH, 2019, p. 83). The significant impact of the storms can also be seen in differences between 2012 and 2018 in key capital and labor inputs to agriculture in Puerto Rico: the aggregate market value of land and buildings decreased by more than $1 billion, while the aggregate value of machinery and equipment increased by approximately $70 million and per-farm labor costs increased as farms sought to rebuild and recover (USDA, 2020a, pp. 13-14).
Before considering electricity resilience options, it is important to carefully define the problems. For Puerto Rico’s food supply activities -- growing food as well as processing, storing, and distributing food on the island – the problems of unreliable power do not equally affect all parts of the industry or all electricity uses.
In this section, critical vs. non-critical power needs are distinguished, types of food supply businesses with especially high dependence on electricity resilience are highlighted, and future electricity vulnerabilities for food supply firms are summarized.
DEFINITION OF CRITICAL VERSUS NON-CRITICAL ELECTRICITY USES
Critical electricity uses are those for which interruptions result in lost business or production capacity, idled workforce, loss of product, damaged equipment, and compromised health and safety (Schneider Electric, 2015). It is important that critical uses continue to have uninterrupted power, even during grid outages.
In the context of food supply, refrigeration for perishable foods, water pumping for livestock operations, and power uses that ensure the safety of humans, animals, and valuable assets can be considered critical electricity uses. Non-critical electricity uses are those that enhance or
6 “The lower limit is traditional agricultural biomass, and the upper limit assumes that microalgae is commercially viable and in widespread use at maximum capacity” (NREL, 2015, p. 3). 7 The number of farms in Puerto Rico in 2012 Census of Agriculture data was much higher, at more than 13,000. The value of agricultural products sold by Puerto Rico farms was also higher in 2012, at almost $550 million (USDA, 2020a, p. 16).
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RENEWABLE ELECTRICITY TECHNOLOGIES TO INCREASE THE RESILIENCE OF THE FOOD SUPPLY SYSTEM IN PUERTO RICO
facilitate operations, but whose constant availability is not necessary to maintain the ongoing functions of the business. Examples of non-critical electricity uses in agriculture could be air conditioning, lighting for offices, and maintenance equipment.
FOOD SUPPLY ACTIVITIES WITH SIGNIFICANT CRITICAL POWER NEEDS
Our background discussions with USDA officials, trade association representatives, and agricultural experts in academia highlighted several critical power requirements in Puerto Rico’s food system. Much of Puerto Rico’s food production for local consumption is perishable, thus heightened electricity resilience is needed in many parts of the food system. Across all agricultural commodities in Puerto Rico, milk and other dairy have the highest annual sales at $172 million, followed by grains or field crops; plantains; cattle; nursery and greenhouse crops; vegetables and melons including hydroponic crops; and poultry (USDA, 2020a, p. 16).
The most commonly cited critical power need is in the dairy sector, which is Puerto Rico’s largest livestock sector. On a gross income basis, the dairy sector comprises 62 percent of the island’s livestock industries (Ortiz-Colón, 2018, p. 3). The dairy sector lost 55 percent of its production at the farm after the 2017 hurricanes, and incurred significant losses throughout the entire supply chain due to damaged business assets and transportation infrastructure, electricity outages, and purchase program closures (Ortiz-Colón, 2018, pp. 16-17).8 Four months after the hurricanes ended, 60 percent of dairy farmers still did not have utility power (Ortiz-Colón, 2018, p. 21). Without power, many had to use emergency diesel generators, which tripled their energy costs (Ortiz-Colón, 2018, p. 21). The dairy sector’s incidence of critical electricity use is high due to regular milking demands and the need for refrigeration. Even short lapses in power supply can lead to spoiled milk or endanger cow health when cows cannot be milked on a regular schedule.
Another critical power use in Puerto Rico’s livestock sector is in poultry operations. They require cooling fans due to the high-density, confined nature of their facilities and the island’s high yearround temperatures. Because poultry farms can be exposed to high animal mortality during multiday outages, cooling is a critical use. On a relative basis, poultry and egg farms are more likely to implement solar energy technologies than other types of farms in Puerto Rico (USDA, 2020a, pp. 117-118).
In the coffee industry, processing plants have a critical power use because coffee beans must be dried within a short time of being picked to avoid degradation. Coffee processing facilities tend to be in the mountains, near coffee farms, where they are exposed to more frequent electricity outages than facilities in coastal parts of the island. Other agricultural activities in mountain areas face similar power shortfalls, as the high concentration of the island’s population and power plants in coastal areas often leads to faster power restoration on the coasts than inland areas.
Food intermediaries must keep produce and animal products refrigerated during packing and distribution processes to maintain freshness and avoid spoilage. For these firms, refrigeration is a critical electricity use, as prolonged outages result in considerable losses.
Due to the frequency of PREPA power outages affecting agricultural activities, there has already been a trend, starting long before the 2017 hurricanes, toward the installation of on-site, back-up diesel generators to provide emergency power at farms and food processing facilities. As the cost of renewable power has decreased in recent years, deployment of renewable back-up
8 4,200 cows were lost due to the 2017 hurricanes (PR DOH, 2019, p. 83).
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RENEWABLE ELECTRICITY TECHNOLOGIES TO INCREASE THE RESILIENCE OF THE FOOD SUPPLY SYSTEM IN PUERTO RICO
power systems and hybrid renewable-diesel systems has increased, though diesel-only systems remain the most common solution.
ELECTRICITY VULNERABILITIES
Puerto Rico is especially vulnerable to disruptions in its food system, due to several factors:
• Heavy reliance on food imports (85 percent of the food it consumes is imported9, with that figure rising to 95 percent after the 2017 hurricanes) (FAO, 2018)
• Use of a single seaport in San Juan for most food imports • Exposure of many critical domestic food system components to outages in grid-supplied
electricity (Port Authority, 2017, p. 4)
Going forward, the island is likely to face continued major risks to its electricity grid due to hurricanes, earthquakes, cybersecurity issues, and the condition of its grid infrastructure. According to the most recent National Climate Assessment, intense tropical cyclones -- such as Category 4 and 5 hurricanes – are likely to affect Puerto Rico with increased frequency over the course of the 21st century (U.S. Global Change Research Program, 2017, Chapter 9). Puerto Rico is also at longterm risk of damaging earthquakes, given the island’s location at the boundary between the Caribbean and North American tectonic plates. The island’s ongoing earthquake hazard is approximately on par with much of the U.S. West Coast (Pagani, et al., 2018; Mueller, et al., 2010). As demonstrated by earthquakes in southwest Puerto Rico in late 2019 and early 2020, future earthquakes have the potential to result in long-term power outages.
Lastly, PREPA’s aging infrastructure magnifies its susceptibility to (i) major outages related to natural hazard events, and (ii) additional outages related to failures of degraded system components. In a regulatory proceeding, PREPA described an “ailing grid,” “degraded infrastructure,” and a “deteriorated” transmission system (DOE, 2018a, p. 12). While additional investments have been proposed for the PREPA electric grid, these plans have yet to be approved. After approval, implementation would take 10 years (Government of Puerto Rico, et al., n.d., p. 9).10 Furthermore, the utility’s long-term plan foresees agricultural electricity consumption from the grid continuing to decrease for the next 18 years, due largely to depopulation and its effects on island economic growth (Siemens, 2019, p. 3-10).
Given the vulnerabilities described above, it is worth considering the ways in which renewable electricity technologies might increase the resilience of Puerto Rico’s electricity supply.
Renewable Electricity Technologies to Increase Resilience
This section summarizes the operation and cost of wind, solar, and biomass renewable electricity systems that may be available to farms, firms in other parts of the food system, and rural communities in Puerto Rico.
9 Puerto Rico’s food imports come from 52 countries, with about 80 percent of the food import shipping originating from the port in Jacksonville, Florida (USDA, 2015). 10 Puerto Rico’s electricity grid also faces risks of long-term power outages from cyber attacks, like other U.S. power grids. These risks increase the importance of resilience for critical power needs nationally. The deployment of more advanced technologies on grids may provide more avenues for power outages. Specifically, “interoperable technologies created for a shift toward a smart grid will continue to expand the cyber attack landscape” (INL, 2016, p. ii).
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