LNG-fueled operations expected to begin by 2028
By The Star Staff
Gov. Pedro Pierluisi Urrutia, along with Puerto Rico Public-Private Partnerships Authority (P3A) Interim Executive Director Gerardo Lorán Butrón, announced on Sunday the selection of the company Energiza for the design, development, financing, construction, installation, operation and maintenance of a new power plant in San Juan that will provide 478 megawatts of energy.
The new plant will initially operate with liquefied natural gas, and will also have the capacity to operate with hydrogen in the future.
“This generating unit is an innovative and novel project, as it will be the first power plant capable of operating with hydrogen in Puerto Rico and one of the few in the world,” the governor said in a written statement. “The plant will use cutting-edge technology, which will allow it to operate with greater efficiency and reliability compared to the plants currently in service on the island. This transaction represents a historic step to stabilize Puerto Rico’s electrical system, since a large-scale private generating plant has not been built for more than 20 years.”
Pierluisi added that the project between the Puerto Rico Electric Power Authority (PREPA), as owner of the island’s generation, transmission and distribution assets, and Energiza “reaffirms my commitment to transforming the island’s electrical system to achieve the stability in energy service that our people deserve.”
“This new plant will be much more efficient and clean than the units currently in service, some of which are more than 50 years old and face challenges in complying with federal environmental regulations,” the governor continued. “Once the new plant is operational, we will be in a position to decommission several of those outdated PREPA plants. At the same time, we continue to work steadily to integrate more than 2,000 megawatts of renewable energy into the system, through contracts already signed with various private operators that will install solar panels and industrial-scale batteries. In this way, we are on track to transform our energy system into a modern one that promotes the socioeconomic development of Puerto Rico.”
The start-up date of the new plant is expected to be June 30, 2028. Energiza is made up of the Puerto Rican companies Tropigas de Puerto Rico Inc. and Cratos Project Services PR LLC, and also has Mitsubishi Américas Power Inc. and NAES Corp. as part of its team. The consortium was selected through a competitive and transparent process under Law 120-2018 (Law to Transform the Puerto Rico Electric System) and Law 29-2009 (Public-Private Partnerships Law) and in accordance with the orders of the Puerto Rico Energy Bureau (PREB), which in turn were in accordance with the Integrated Resource Plan and Puerto Rico’s energy public policy.
During the bidding process, which lasted about 21 months, six companies were considered as qualified. The agreement, which is in the form of an energy purchase and operation contract signed between Energiza and PREPA, is valid for 30 years, with the possibility of two 10-year extensions each. The contract was approved by the boards of directors of the P3A, PREPA, the PREB and the Financial Oversight and Energy Board. The initial cost of the energy that the plant will inject into the electrical system is estimated at 11.6 cents per megawatt.
Lorán Butrón, the P3A interim executive director, said: “Once again, we were able to demonstrate that our processes are effective and suitable for transforming and modernizing Puerto Rico’s critical infrastructure.”
“Today we formalized a transaction that represents a key piece for the generation of energy in Puerto Rico, because it adds additional and advanced resources to address the generation insufficiency,” he added. “The selection of Energiza involved a rigorous study process to ensure that the project objectives are achieved and to continue to direct the island’s energy reliability.”
PREPA Executive Director Josué A. Colón Ortiz noted that the signing of the contract between the public corporation and Energiza contributes to the transformation of the energy system.
“This agreement reaffirms our commitment to maintaining the continuity of energy production in an efficient, economic and environmentally friendly manner …” he said.