California and Puerto Rico's Outages Lead to Energy Innovation

By: Peter Asmus

Read the full article on Guidehouse Insights

California and Puerto Rico sit on opposite sides of the US; these regions are also are vastly different. In many ways, Puerto Rico resembles an emerging economy similar to other Caribbean islands in the vicinity. California, in contrast, is often held up poster child of the new digital economy.

However, these two parts of the world share quite a bit, especially when it comes to energy challenges. Widespread power outages have plagued both regions. Puerto Rico has the dubious honor of bragging rights to the longest and largest power outages in US history. It shares the distinction with other Caribbean nations and East Coast states that these outages stem from hurricanes. California, on the other hand, is distinguished by increasing numbers of power outages linked to wildfires. In fact, many recent wildfires have been created, in part, by aging electrical infrastructure. Utilities have had to institute public safety power shut offs to limit future wildfires and extended outages, including events in August 2021.

Troubled Utilities Seek Answers

Climate change has created tremendous operating and business challenges for some our most venerable power utilities. In Puerto Rico, the government-owned Puerto Rico Electric Power Authority reached a settlement with its bondholders after teetering on the edges of bankruptcy for some time. In June 2021, it turned over ongoing operations to LUMA, a private company JV between Canadian Utilities and Quanta Services. In California, Pacific Gas and Electric declared bankruptcy and successfully emerged from Chapter 11 in 2020. Finally, both regions have committed to 100% clean energy goals: by 2045 for California and by 2050 for Puerto Rico.

Grid reliability challenges in both regions speak to the need for greater resiliency without relying upon traditional backup diesel generators. Both regions need to consider a significant expansion of microgrids (as do other parts of the US, such as Texas.) California has aggressive carbon reduction mandates, renewable energy, and energy storage goals. Nevertheless, the state’s utilities have relied on diesel generators to keep power flowing over the past few years. Many residents have turned to propane or gasoline-powered generators to keep power flowing at their homes or small businesses.

Clean Energy Microgrids Offer Alternative Solution

With crisis comes opportunity. Blue Planet Energy is active in both markets with a new kind of lithium-ion battery that is small, dense, and non-flammable. The company is the brainchild of video game entrepreneur Henk Rogers of Hawaii. In Puerto Rico, the company has partnered with many nonprofits, such as the American Red Cross, to deploy over 100 systems to support its Solar Schools initiative and water pumping systems. In another project on the remote island of Culebra, 17 miles offshore from the main island of Puerto Rico, his company’s Blue Ion batteries were installed at the only hospital.

Solar Plus Storage Water Pumping Station Microgrid in Puerto Rico

For places, like California, Blue Planet Energy has rolled out a new energy as a service offering. “California’s economy is suffering from rapidly rising energy costs combined with unreliable service,” said Chris Johnson, the company’s CEO. “We created a zero-money-down clean energy microgrid financing offer because California businesses need a way to access the cost savings of renewable energy and the resilience that microgrids provide.” said Johnson.

Guidehouse Insights will release a public report on the jobs created from current and future clean energy microgrids in these two regions—and the US as whole—for the Civil Society Institute this fall.