Puerto Rico fuel optimization plan advancing

Puerto Rico’s energy regulator PREB has closed consultation for company Genera’s fuel optimization plan.

New Fortress Energy (NFE) controls Genera which manages power authority PREPA’s 4,693MW thermal park.

The plan aims to reduce the price of fuels through logistics-related market negotiations, market-price risk management, improved plant efficiency, and switching to LNG from diesel.

Genera has said that it “recognizes that the ultimate objective is to eliminate the use of fossil fuels, but the current system is not ready to retire the entire fossil-fueled fleet in the short-term.”

The first major project calls for switching the primary fuel of the Palo Seco mobile packs (81MW) and Mayagüez combustion turbines (220MW) to natural gas from ultra-low sulfur diesel.

Also read New Fortress Energy Announces Transformative Transactions in Puerto Rico and NFE eyeing US$200mn spend for Puerto Rico fuel switch work

COMMENTS

“Taking into consideration that technology and energy market conditions are constantly changing, the FOP [fuel optimization plan] must have the flexibility to adapt to new opportunities for optimization and savings,” the island’s independent consumer protection office OIPC told the watchdog.

“For this reason, it is necessary to establish performance reviews and periodic adjustments, which allow for the incorporation of these new technologies and operating practices that result in additional savings for the consumers,” OIPC said.

For Antonio Medina, president of local consultancy Convergent Strat, the plan “seems to focus on finding quick wins and immediate savings for the O&M [operations and maintenance] company, instead of attaining a real optimization that benefits the generation system in the long term.”

“It is understandable that LNG fuels will be the transitional means to save the island’s power grid until other sources like Aeolic, hydrogen and solar technologies become available. However, focusing on the short-term change from fossil fuels to LNG without a concrete wide-ranging long-term plan that integrates other technologies lacks any real optimization of resources,” he added.

Solar promotion coalition Queremos Sol was the most critical of the plan, claiming that “Genera’s and New Fortress’ main motivation and objective in the privatization contracts is to increase use and dependency of natural gas in Puerto Rico, in order to financially benefit the parent company, NFE.”

The coalition argues that “the fuel swaps proposed were not evaluated in the 2020 Integrated Resource Plan (2020 IRP) and, if they were to be considered now, they need to be included in the new 2024 IRP process to account for public participation, public input and a robust evaluation of alternatives that advance Puerto Rico's renewable energy goals.”