Puerto Rico renewable energy procurement process hits snag

The third tranche of the Puerto Rican government’s renewable energy and storage procurement process has fallen through.

“Based on the prices for renewable energy and energy storage resources received in the early stages of the tranche 3 RFP, it is clear that the final costs - particularly when accounting for interconnection expenses - will be too high to provide ratepayers with fair and affordable electricity,” according to information from the island’s energy regulator PREB.

The tranche was launched last year and sought capacity and storage capacity of 1,000MW and 500MW, respectively, with proposals due and received on September 1, 2023. Participants and their offers have not been released due to confidentiality requirements.

PREB said that the selection committee determined that the initial tranche 3 pricing for solar projects, excluding interconnection costs, exceeded reasonable base price levels.

The watchdog added that several contracts under tranche 1 have been amended to address the impact of market conditions, particularly those resulting from COVID-19, highlighting that prices increased an average of 34% over original contract prices.

For tranche 2, a limited number of contracts were approved, with details also subject to confidential treatment.

In a resolution and order, available in the Documents box in the top right corner, the regulator recommended that all tranche 3 proposals be rejected, and the tranche terminated, and that a fourth tranche be launched.