Puerto Rico - Renewable Energy Portfolio Standard

Summary

Note: Act No. 57-2014 requires PREPA to create a RELIEF plan regarding its obligation to efficiently generate electric power, various operational issues, and the integration of renewable energy.

Puerto Rico's Renewable Energy Portfolio Standard requires the Autoridad de Energía Eléctrica de Puerto Rico (Puerto Rico Electric Power Authority or PREPA)* to supply 100% of retail electricity sales from eligible renewable energy resources by 2050.

Eligible Technologies

Renewable energy resources fall into three categories. The first category is "Sustainable Renewable Energy," which includes solar, wind, geothermal, renewable biomass combustion, renewable biomass gas combustion, combustion of biofuel derived solely from renewable biomass, hydropower, marine and hydrokinetic, and ocean thermal. The second category is "Alternative Renewable Energy," which includes energy derived from landfill gas combustion, anaerobic digestion, and fuel cells. The third category is "Distributed Renewable Energy," which includes sustainable or alternative renewable energy supplying electric power to an electric power service company or generated for self-consumption or for sale to third-parties; community solar and net metering are explicitly included as eligible systems.

Renewable biomass, qualified hydroelectric, and municipal solid waste are further defined in the law. The different categories were created with a potential federal renewable energy standard in mind; the "sustainable renewable energy resources" would qualify under Puerto Rico's standard and also a potential, future federal standard; whereas the "alternative renewable energy" resources would only qualify for Puerto Rico's standard.

Requirements

In July 2010, Puerto Rico enacted the island's first Renewable Energy Portfolio Standard in an effort to spur renewable energy development as well as reduce Puerto Rico's dependence on imported foreign oil. The original targets ended at 20% by 2035. The Standard was later updated in 2019 to 20% by 2022, 40% by 2025, 60% by 2040, and 100% by 2050. The 2019 changes also requires coal to be completely phased out by January 1, 2028, and for all public lighting to be replaced with either light-emitting diodes (LEDs) or renewable energy by 2030.

Renewable Energy Credits

PREPA must show compliance with the RPS through procurement of renewable energy credits (RECs).** One REC is equivalent to one megawatt-hour (MWh) of electricity derived from a renewable energy source. RECs may be banked starting in 2013 for the 2015 compliance year. RECs may be banked for two years in addition to vintage year, although the REC loses half its value if it is banked for use in year 2. Puerto Rico uses the North American Renewables Registry (TM) for REC tracking.

The Energy Public Policy Program under the Department of Economic Development and Commerce and the Puerto Rico Energy Bureau are responsible for overseeing RPS implementation.

* The law applies to all retail electric providers of 50,000 MWh or more per year. However, PREPA is the only retail electric provider in Puerto Rico that currently meets that definition.
**PREPA may also report on the amount of renewable energy purchased through net metering or power purchase agreements to demonstrate partial compliance.