As part of the Biden-Harris administration’s Investing in America agenda, the US Department of Energy (DOE), through its Loan Programmes Office (LPO), announced a US$861.3 million loan guarantee to finance the 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 clean, reliable, and affordable power to communities throughout Puerto Rico. The borrower is Clean Flexible Energy, LLC, an indirect subsidiary of The AES Corp. (AES) and TotalEnergies Holdings USA, Inc. that is managed under a joint venture agreement between the two companies. The announcement underscored the President and Vice President’s efforts to deliver clean energy solutions that benefit communities grappling with the persistent and lingering effects of climate change.
“President Biden and Vice President Harris understand that access to reliable energy is a matter of life or death — especially in the face of climate-change fuelled natural disasters that are increasing in intensity and frequency,” said US Secretary of Energy Jennifer M. Granholm. “Today’s announcement will help add up to 200 MW of solar generation and another 285 MW of reliable storage capacity to Puerto Rico’s electric grid to improve the grid’s resilience and help reduce energy costs that have remained too high for too long for too many families — all while enabling the Commonwealth to reach its ambitious climate goals.”
As part of President Biden and Vice President Harris’ Investing in America agenda to create good-paying, high-quality job opportunities, this project will support approximately 750 construction jobs and more than 50 full-time jobs once fully operational. The project also supports the Biden-Harris administration’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. Puerto Rican residents pay energy costs significantly higher than the US average. According to the Climate and Economic Justice Screening Tool, the Commonwealth of Puerto Rico, including the communities surrounding the Salinas and Jobos projects, faces some of the greatest energy burdens in the US.
Collectively, the project — known as Project Marahu — comprises 200 MW of solar PV and up to 285 MW (1140 MWh) of stand-alone BESS capacity. Annually, the solar PV installations will produce approximately 460 000 MWh of energy, enough to power approximately 43 000 homes, and enhance Puerto Rico’s grid reliability and energy security. The co-location of the new solar and battery resources will help maximise 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 is expected to eventually replace existing fossil fuel-based generation and reduce emissions by nearly 2.7 million tpy of CO2e, an amount roughly equivalent to the annual emissions of around 533 000 gasoline-powered passenger vehicles.
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 (CBP) that ensures meaningful community and labour engagement, improves the well-being of residents and workers, and incorporates strong labour standards during construction, operations, and throughout the life of the loan guarantee. For the Marahu project, the CBP is being finalised and will be released to the public soon.
The Project Marahu team includes two community relations managers who are from the Guayama community and a group of local community engagement advisors. Local labour leaders will be engaged for the construction and operations planning at both the Jobos and Salinas sites. AES, through existing facilities operating in Puerto Rico, has forged partnerships with community development non-profits and minority-serving educational institutions. AES has also worked with a variety of organisations to lead capacity-building and entrepreneurship programmes for Guayama and Salinas community members and has formalised programmes offering targeted training and career development opportunities for women.
This project is financed through the?Energy Infrastructure Reinvestment?(EIR) programme 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, utilise, or sequester air pollutants or greenhouse gas emissions. In support of President Biden’s efforts to support economic revitalisation in energy communities, Project Marahu will assist in 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.
The announcement is one of many actions DOE has taken to help strengthen Puerto Rico’s grid modernisation and energy resiliency. In December 2022, President Biden authorised US$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).
Across all LPO’s programmes, DOE has attracted 211 applications for projects across the country totalling over US$305.3 billion in requested loans and loan guarantees, as of September 2024.
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