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Prepa clarifies compliance procedures for private renewable-energy projects

The Puerto Rico Electric Power Authority (Prepa) is clarifying how it will measure compliance with a series of requirements it is establishing for about $5.4 billion in renewable-energy projects to connect to its grid before the projects can move forward.

Prepa completed its evaluation of the so-called minimum technical requirements (MTRs) for private renewable-energy producers and sent them out to the companies.

The MTRs are aimed at protecting Prepa’s fragile power grid from potential damage that can stem from the power fluctuations inherent in intermittent sources of energy, such as wind and solar power. MTRs generally require developers to include a battery storage system along with other potential technological advancements that can add significant cost to a project. These MTRs generally require a solar developer to include a battery storage system along with other potential technological advancements that can add significant cost to a project. Such compliance standards generally require a solar developer to include a battery storage system along with other potential technological advancements that can add significant cost to a project.

Prepa Executive Director Juan Alicea Flores said the MTRs set a storage floor of 30 percent of contracted capacity. Developers will need to keep a minimum of 45 percent of capacity in reserve to cover at least a minute of ramp-downs or ramp-ups.

“This flexibility represents a substantial reduction in the investment that developers have to undertake,” Alicea said. “We expect this initiative will spark a positive attitude among developers amid renegotiations of renewable energy contracts with Prepa aimed at ensuring fair prices for the people of Puerto Rico and developers.”

Prepa moved recently to renegotiate the pricing of signed power-purchase agreements (PPAs) with private renewable-energy producers. The government utility Prepa had signed some 63 PPAs with private solar and wind producers, which proponents say add up to a $5.4 billion investment that will create 18,000 jobs and a brand-new industry.

However, calling the pricing negotiated under the previous administration “onerous,” Alicea contacted 18 developers whose projects have received permits from the local government calling on them to renegotiate new terms.

“We have been meeting with and presenting our proposal to the companies that already have permits or are close to getting them,” Alicea said Thursday. “Talks are ongoing. We want to set prices that are fair all parties. We hope to have them settled soon.”

The Prepa chief reiterated the goal of connecting up to 600 megawatts of private renewable energy projects to the public corporation’s grid the end of 2014.

“That would spur renewable energy use by Prepa from 1 percent to 6 percent next year,” Alicea said. “Puerto Rico would become the first in the Caribbean and Central America to reach that level of solar and wind power production.”

Developers acknowledge the need for the MTRs, but have been pushing for clarity from Prepa on how compliance will be measured to successfully design the projects.

The lack of clear MTRs and plus Prepa’s move to renegotiate the pricing of signed PPAs has shaking investor confidence in Puerto Rico, according and industry trade group.

The Renewable Energy Producers Association (APER by its Spanish acronym) said the rate issue will likely spark a nasty legal battle and prompt an exodus of investors from Puerto Rico.

Source: http://caribbeanbusinesspr.com/news/prepa-clarifies-compliance-procedures-for-private-renewable-energy-projects-91942.html



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