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Energy Plan for Market Transformation in PREPA

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Daniel Hernandez's picture
Generation Director, PREPA

Over 31 years of experience working for the Puerto Rico Electric Power Authority. Currently, responsible for the operation and maintenance of the entire base and reserve generation fleet that...

  • Member since 2021
  • 2 items added with 2,793 views
  • Mar 23, 2021

This item is part of the Power Generation - March 2021 SPECIAL ISSUE, click here for more


In order for Puerto Rico Electric Power Authority (PREPA) reach 40% on renewables, by mandate of the Energy Public Policy Law for 2025, enough conventional generation capacity based on new highly efficient technology as well as energy storage systems must be in operation to support renewable variations and a forecast peak demand of 2,800-3,000 MW during the high demand season.  Furthermore, a new automatic generation dispatch system must be in operation to effectively and automatically handle the new mix in the generation fleet.

PREPA must pursue a real and executable goal period of 10 years for a transition from current fuel mix to renewables and Liquefied Natural Gas (LNG) as a primary source of generation.  On the other hand, during this period the development of energy storage projects should have priority, otherwise excess production in renewable systems would be lost.

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To understand where PREPA is in relation to that 40% on renewables and why is necessary to establish a real goal to manage that level of new generation, lets first describe the relationship between the current fuel mix and the generation capacity for the entire system.

Currently LNG represents 45% and renewables only 2% of the total production (see graph 1 below). During this proposed 10 year transition the goal must be eliminating completely the use of bunker C (currently 29%), coal (currently 18%) and reduce as much as we can the use of diesel (currently 12%).

         Graph 1. PREPA’s current energy production by fuel type (October 2020)

The table 1 shows the breakdown of the current fleet in terms of fuel type, technology and available generation capacity. The fleet that uses bunker C fuel include
Palo Seco, San Juan and Aguirre. On the other hand, the units that use diesel include Mayaguez, Cambalache, Aguirre Combined Cycle and the peaking units.

Table 1. Breakdown of current production in MW

(some units are currently under repair or maintenance)

Power Plants

Fuel Type


Current Capacity



Renewable (PPOA’s)

Solar, Wind and Landfill Gas

Renewable with or without MTR

250 MW

1.84 %




454 MW

18 %




530 MW

18 %




25 MW

0.43 %


San Juan 5&6

Costa Sur 5&6


LNG / Diesel

LNG /Bunker C






400 MW

820 MW

1220 MW




24 %

PREPA’s Diesel



Aguirre CC

18 Peaker Units

Aero-derivative Gas Turbines

Gas Turbines

Combined Cycle Gas Turbines

Gas Turbines


220 MW

154 MW

311 MW

150 MW

835 MW





12 %


Palo Seco 1

Palo Seco 2

Palo seco 3

Palo Seco 4

San Juan 7

San Juan 8

San Juan 9

San Juan 10

Aguirre 1

Aguirre 2

Thermoelectric-limited Use EPA

Thermoelectric-limited Use EPA



Thermoelectric-limited Use EPA

Thermoelectric-limited Use EPA






0 MW

0 MW

160 MW

160 MW

0 MW

0 MW

90 MW

0 MW

450 MW

450 MW

1310 MW











24 %

Total available capacity with renewables

4624 MW



According to the currently available capacities, eliminating 100% of the bunker C fuel requires retire the thermoelectric plants of Palo Seco, San Juan and Aguirre from the system, which represents a generation of 1,310 MW or 24% of production. Additionally, these units are the main fleet offering the frequency, inertia and short circuit control capabilities necessary to maintain system stability, reliability and continuity. Inertia of a power system assists in reducing the rate of change of frequency of a grid during fault events (loss of generation, plant trips, or transmissions systems failures), which provides grid operators sufficient time to manage power imbalances by dispatching spinning and non-spinning reserves. To maintain the basic parameters of the electrical signal and an acceptable level of power quality, it is imperative to keep the capacities described above, which are mainly offered by rotational electrical generating machines.

The Energy Public Policy Law in Puerto Rico also establishes 2027 as the date for the retirement of the use of coal as generation fuel. This represents the retirement of AES with another 454 MW of capacity (18%) in generation, short circuit and inertia. Thus, the elimination of bunker C and coal represent 1,764 MW or 42% of the total electricity production of the current system.

Based on the projects approved or agreed under different FEMA programs and considering the possibility to have access to LNG in different new and existing units, we reasonably can forecast that we would have available about 2,850 MW in LNG rotational generation capacity in a period of 10 years. The breakdown of this generation is described in Figure 1.


Figure 1. Generation Mix Forecast 5-10-year period


The generation projects considered to be developed with FEMA funds include the replacement of the Palo Seco thermoelectric units (units 1, 2, 3 and 4) with a new 400 MW combined cycle capacity. This project is necessary to strengthen generation in the area of higher demand, which is the north-metropolitan area. In addition, both Palo Seco and San Juan power plants are connected through the 115 kV underground circuit that, in the event of an emergency such as intense hurricanes, allows generation to be transmitted to the most important substations in the metro area. In this way, the service of critical loads such as the Puerto Rico Medical Center Complex, the airport and many others, should not be interrupted.

Another project under FEMA’s mitigation program is the replacement and modernization of the existing fleet of rapid response units or peaking units (PU). PREPA’s current diesel units consists of 18 frame 5 GE in commercial operation since 1971-72.  These fleet must be replaced with new highly efficient technology using LNG as primary fuel.  The importance, need and justification to replace the entire fleet of peaking units in the current and future system is based on the following criteria:

  1. Peaker Reserve - Peaker fleet will provide generation during high demand or generation deficiencies scenarios. New gas turbine technology is capable of starting from cold iron, to full load within 5 minutes.

  2. Black Start Units - These units provide the required generation to start up the system aftermath complete black out scenarios due to hurricanes, earthquake or other major system failures. Large capacity units such as Costa Sur, Aguirre, AES, EcoEléctrica, Palo Seco and San Juan require black start units to start up.

  3. Mini-grids - These units can operate in island mode. This capacity makes it possible to offer the generation necessary to maintain service to critical loads such as hospitals, water pumps, among others, as was carried out aftermath of hurricanes like María.

  4. Frequency control - With the latest technology, new units can respond fast enough to mitigate natural variations of renewable systems, in particular the heugh amount of non-controlled roof top systems allow to be connected by the energy law.

  5. Short Circuit Capacities - These units can offer part of the required short circuit capacity to keep the stability of the system under failures scenarios.

  6. Synch Condensers Capabilities - These units will add inertia to the system to maintain the stability of the basic parameters of frequency and voltage in the generation system.

  7. Resilience - This type of technology is less susceptible to damage due to hurricanes and earthquakes. This is one of the lessons learned after Hurricane María in 2017 and the earthquakes of 2019.


Based on the Integrated Resources Plan (IRP) and an execution plan that may be achievable, we must draw up the 10-year generation transition plan that will allow us to safely reach 40% renewable energy in our system.  Considering the goal of eliminating the use of bunker C and coal, as well as reducing the use of diesel in our system, let's see the current state of units that use these fuels.

  1. AES - Coal - Will shut down operation on 2027. This represents that 18% of production (454 MW) must be replaced by new renewable generation.

  2. Palo Seco 3 and 4 - Current capacity 160 MW each (320 MW) will be replaced by new CC of 400 MW using LNG financed by FEMA funds. Expected date to complete: 2024-2025

  3. Palo Seco 1 and 2 - Both units are currently not in service, are limited use by the EPA and must be retired and seized.

  4. San Juan 7 and 8 - Current capacity 90 MW each. Both units are limited used by EPA and must be retired.

  5. San Juan 9 - Unit in service with current capacity 90 MW.  Must be retired and replaced by new renewable generation. This unit must be converted as Synch Condenser to offer system inertia and short circuit capabilities.

  6. San Juan 10 - Unit not in service (90 MW) due to a failure in the turbo-generator. Must be repaired to keep in operation until new generation be in placed to support metropolitan area demand. This unit must be converted as Synch Condenser to offer system inertia and short circuit capabilities.

  7. Aguirre 1 and 2 - Both units in service at full capacity of 450 MW each. Both units serve to frequency control in the system and must be in service until new generation can replaced this level of capacity. At short term (5-7 years) can be converted to Synch Condensers.

  8. Mayaguez Power Plant - These generators are already converted to LNG. PREPA must pursue to bring LNG and use this power plant as base generation. Mayagüez Power Plant is the only generation source in the western area that, under emergency scenarios, has maintained essential service in the municipalities of the entire west coast of Puerto Rico. LNG in Mayagüez will provide the following benefits:

    • Reduced by 90% CO2 emission

    • Reduce unit’s maintenance requirements

    • Provide savings in fuel purchase

    • Cambalache Power Plant - This plant should be maintained as an emergency generation given the importance it represents for critical loads in the area of the municipalities near Arecibo and for the sustainable development of the economy of the area. Another factor to consider is that many of the renewable utility capacity projects will be located in the north-west area where Cambalache is the only generation plant that currently exists that would support this type of generation


The approved IRP establishes that a capacity of 3,500 MW in renewable systems and 1,200 MW in energy storage must be connected to the system in 2025.

Renewable energy integration has two main components: utility scale systems and roof top systems. Utility scale systems must have minimum technical requirements (MTR) that, among other aspects, seek to manage the drastic changes in generation of these systems, allowing conventional generators and energy storage systems to respond to avoid changes that affect the basic parameters and consequently, the quality of the power of the customer service is affected. In order to understand the operation of renewable systems and the capacity factor this technology provide, we present the following graphs below.

Graph 2 shows the typical behavior of four of the private providers (PPOA) of renewable generation currently in service. The graph shows three PPOA from solar generation and one from wind. An important fact is that the constant maximum capacity in solar projects is achieved during a period of no more than 6 hours between 9am to 4pm. Graph 3 shows four renewable PPOA facilities currently in operation where the capacity factor and energy produced (kWh) by these projects monthly is shown. The capacity factor is the ratio of the actual or net electrical energy production during a given period of time to the maximum possible electrical energy production during that period. In solar systems the values fluctuate between 20 and 25% of their maximum possible production, which is typical in the industry indices for this type of generation.

Graph 2. Utility scale in renewable system’s generation characteristics (2019)

Graph 3. Utility scale renewable system in operation capacity factor 2019




The natural variations that renewable systems present are a challenge for the operation of the electrical system.  A sudden decrease in generation causes the system frequency to drop until the rest of the fleet in service can make up for the lost capacity. If the loss in generation represents a considerable MW capacity, the frequency can drop to the level where the automatic low frequency load shedding is activated, leaving thousands of customers without service until the generation capacity is normalized.  Graph 4 shows a real example of how the generation of a utility scale solar system currently in operation varies.  The light blue line represents the output of the solar panels, the black line is the generation of the PPOA at the point of connection with the system, the green line the compensation of the battery system that is required to maintain variations in the output generation of the PPOA not greater than 10% in a period of 2 seconds and the area in orange represents when the 10% established in the minimum technical requirements (MTR) is violated.

Graph 4. Effects of existing solar renewable generation projects over system frequency with its own energy storage system (BESS)

The event shows an example where the output of solar panels dramatically decreases their capacity from 9 MW to 2 MW. Despite having the compensation of the battery system, the rate of change in the PPOA output to the system exceeds the 10% allowed, reducing the output generation at the point of interconnection of the system from 9MW to 6.5 MW. Similarly, the frequency of the PPOA ranges from 60.26 Hz to 60.14 Hz.

Graph 5 shows an event in another PPOA in operation, in this case a wind power farm. The same happened on August 20, 2019 at 3:35 pm. As can be seen in the graph, a total of 35.8 MW is lost in an interval of 5.35 minutes for 6.69 MW / minute. The system frequency dropped from 60.05 Hz to 59.82 Hz. This is the type of event or variation that requires rapid responsiveness to maintain frequency control. This can be achieved with a combination of centralized systems with high energy storage capacity and conventional generation such as combined cycles and rapid response units, among others.

Graph 5. Effects of existing wind renewable generation projects over system frequency without energy storage system (BESS)


The net metering program enables customers to install solar systems on top of their roofs. This type of installation is also known in the industry as distributed generation. These systems do not require the minimum technical requirements that keep the variations below 10% at the point of interconnection. In other words, PREPA does not have control over the production capacity of these facilities, so it requires flexible generation to mitigate their intermittencies. For example, graph 6 shows the generation produced by a residential rooftop solar system.  As can be seen, the system shows a marked variability even in the hours of greatest solar irradiation.

Currently, PREPA has a capacity that exceeds 200 MW connected in its net metering system. Graph 7 shows the rapid penetration of distributed generation in the system. To put this in perspective, the distributed generation current capacity (235 MW @ Oct, 2020) of this type of generation is greater than the capacity of unit 5 or 6 of San Juan Power Plant (220 MW each).

Graph 6. Roof solar system energy production example


Graph 7.  Distributed Generation Integration

If we move again to graph 5 where a sudden loss of 35 MW caused a decrease of 0.24 Hz in the frequency of the system, the more potential for variation of parameters have the over 200 MW in solar systems installed on roofs above the system frequency without MTR. The integration of this type of systems is expected to double in the coming years, so it is urgent to give priority to generation and operation projects that will allow the variation of renewable systems to be managed safely.  


Graph 8 shows the peak demand that occurred on August 19, 2020 in Puerto Rico.  This curve shows the typical customers load behavior (MW) during a 24-hour period where the maximum demand is registered between 7 and 10 at night and the minimum at 5am. For the current year 2020, the maximum demand registered
was 2,945 MW (August), an amount that exceeded the peak demand of 2019. This implies that the generation system must have sufficient capacity to provide the system's peak demand forecast, among other factors such as the controlled reserve, spinning reserve, off-line reserve, the fleet maintenance program and the forced outage of the units due to technical failures.

Graph 8. Maximum demand load of 2020

According to the new Energy Public Policy Law, 40% of the generation production necessary to meet the demand in Puerto Rico must come from renewable sources. Forty percent of the energy production produced in 2019 is equivalent to approximately 7,554,520 MWh. This represents a capacity of 3,600 MW in renewable systems, assuming a capacity factor of 24%.

Graph 9 shows an illustration of what 40% of renewables would represent during the same peak day recorded in 2020. The intention is that it can be understood how much this 40% of renewable contribution represents (mainly in solar energy) in one day high demand of the system. The green curve shows the typical contribution of renewable systems, assuming a maximum generation of 3,600 MW installed in the system. The green area under the curve, represents the contribution of renewables during production hours while the portion over the load curve is the excess production that would be lost if there are not enough storage systems with batteries.

The blue part of the graph represents the demand that must be supplied by conventional generation and energy storage. Above the typical demand curve, there must be a minimum spinning generation capacity equivalent to the generator with maximum operating capacity in the system (currently 450 MW), represented by the orange line on the graph.

     Graph 9 Maximum demand load of 2020 with expected 40% on renewables

This means that to have safely operation, the system needs enough generating capacity to cover both the demand and spinning reserve that mitigate any deficiency that may arise in the system up to a capacity equivalent to the generator with the highest capacity. In addition, the operating criteria requires having at least 250 MW off-line reserve to cover additional scenarios of generation deficiencies.  On the other hand, it is necessary to have enough installed generation to carry out the scheduled maintenance and forced outages of the generation fleet. If we assume a peak demand between 2,800 and 3,000 MW, it implies that the mix of conventional generation and energy storage must have a minimum available capacity of between
3,450 and 3,650 MW.


The integration of renewable energy sources presents an unprecedented challenge for the existing electrical system in Puerto Rico. The variability of these systems makes it necessary to put into operation fast response systems that can maintain stable the basic parameters and the quality of the electrical signal that is served to customers. Systems such as energy storage with batteries and high efficiency conventional generation shall be part of the new mix that should provide enough spinning reserve, frequency and voltage control, inertia and short circuit capabilities to maintain a stable and reliable electrical system. The most suitable battery energy storage solution would be in ultra-fast response (milli sec) applications, where they discharge energy for short durations that controls voltage and frequency fluctuations giving time (minutes) in what conventional generation technologies are dispatched.

Solar rooftop generation is an additional challenge since they do not include technical requirements that provide control over the generation. This makes it necessary for the transformation of the electrical system to include smart grid approach to provide visibility for the operation and the corresponding dispatch of the generation fleet.

It must be taken into consideration that in Puerto Rico the peak of maximum demand is experienced during the nights, when the contribution of renewables is minimal. In order to meet the expected peak demand (2800-3000 MW) and operating requirements, the system would require an available minimum capacity of approximately 3,650 MW from dispatchable sources.

The 10-year transformation plan for the modernization and reconstruction of the electrical system should take into consideration, as a priority, the projects that allow safe operation with the integration of renewable generation systems. Hence the importance of projects such as the new combined cycle of Palo Seco, replacement of the existing fleet of peaking units, the construction of several energy storage systems, the rehabilitation of hydroelectric generation, and a new control system that allows an effective automated dispatch of the integrated generation fleet.  

Matt Chester's picture
Matt Chester on Mar 24, 2021

Thanks for the thorough overview of this important topic, Daniel. From a policy standpoint, is there a disadvantage you think PREPA has in its plans based on it not being located in a state but rather a territory in the United States? Do those politics and government structures come into play at all? 

Larry Eisenberg's picture
Larry Eisenberg on Apr 2, 2021

Hi Daniel: Your review of the current challenges faced by PREPA is very well done. One topic that you have not addressed is the need for resiliency in the power distribution system across Puerto Rico.  The next Cat 5 hurricane could easily blow down the power lines again, and create havoc with the power supply.  I was disappointed to see the approach taken with the recent rebuild of the transmission system to just replace what existed rather than to look at a system that could withstand whatever natural challenges might appear. I would have hoped to see a rebuild that put the entire distribution system underground and modernized all system components. I recognize the expense and technical challenges in such an endeavor but the expense would be repaid many times against the need to rebuild many times as climate change creates worst weather than we have ever seen.

My sense is that what is needed is bold leadership that looks not at a ten year time frame but rather at as-soon-as-possible conversion to 100% renewable energy combined with a large enough energy storage system to create a 100% dispatchable and 100% reliable electricity system for Puerto Rico.  Such technology exists and would be straightforward to install.

From my perspective, the issue that stands in the way of this solution is funding.  I would estimate the cost of the needed system at this scale to be under $10 billion.  Certainly, PREPA and Puerto Rico do not have access to $10 billion to accomplish the needed conversion.  Although the present proposal for a $2 trillion infrastructure program might have the ability to provide this type of funding, an alternate approach would be to engage the private sector to build the system that I have described under the terms of a large private sector power purchase agreement secured with a US government guarantee.

The resulting cost of energy under such a power purchasing agreement to the typical energy consumer in Puerto Rico would be far below the present price per kWh that they are paying.  A great side benefit would be the ability to mothball the current power plant fleet and redirect PREPA staff to work on a cleaner and greener energy future.

Hope this helps your thinking.

Larry Eisenberg


Daniel Hernandez's picture
Daniel Hernandez on Apr 15, 2021

Hi Larry and Matt;

Thanks for your comments and thoughts. Certainly, PR has in its hands a unique opportunity to transform its electrical system with approved federal funds. The design of the new system, in my opinion, must consider the experiences of past hurricanes such as María (2017) and the January 16, 2020 6.4 earthquake. In addition, it must consider the particular characteristics of the PR's electrical system. Beginning with the lessons learned from Hurricane Maria, the extent of damage included destruction of utility grade solar power systems in operation as well as a wind generation farm. The hurricane devastated most of the transmission and distribution lines, and flooded many substations, among other damages.

The reconstruction of the new system must have an intelligent mix of projects that include underground distribution and transmission lines, maintain a fleet of conventional distributed emergency generation that serves to maintain critical loads in emergency scenarios or generation deficiencies, relocation of substations outside floodplain areas, the automation of electrical protection systems that make it possible to adapt different topologies of the electrical system that arise from the disconnection of transmission lines as a consequence of a major atmospheric event, such as hurricanes.

The transition to renewable energy sources is a legal mandate in PR. By 2025 we must reach 40% and by 2050 100%. To achieve this goal, it is essential that important technical operational aspects are taken into consideration to maintain the basic parameters of the electrical signal, frequency and voltage. In addition to energy storage systems, it is necessary to integrate synchronous condensers, combined cycles and peaking units, all of them part of the grid firming, which will offer the necessary levels of inertia and short-circuit currents capacity.

PR is not only a geographic island but also an electrical island, so the electrical system must be self-sufficient in terms of its generation and its strength to withstand the events of electrical failures, which occur in any electrical utility. The reality of the hurricane season in PR, every 6 months, makes it necessary to think about the vulnerability of renewable systems and large thermoelectric plants, which, due to the experience with Hurricane María, suffered considerable damage. However, small units such as peaking units and combined cycles served as the source of immediate generation aftermath of the hurricane. Something similar happened after the January 2020 earthquake.

Another equally important facts are that renewable systems in PR have an average CF of 21% and during the nights we do not have dispatchable availability of energy from the sun, wind or water. On the other hand, the maximum demand peak occurs at nights where historically its maximum is between the months of August and September, currently around 3000 MW. Therefore, it is extremely important to have dispatchable sources of generation to meet the forecast demand.

The experiences with the proximity of major natural events and the characteristics of the PR electrical system will require that the new system be designed considering the integration of renewable sources with the support of energy storage systems in combination with flexible and efficient conventional generation that will allow a stable, continuous, environmentally acceptable and resilient service.




Matt Chester's picture
Matt Chester on Apr 16, 2021

The experiences with the proximity of major natural events and the characteristics of the PR electrical system will require that the new system be designed considering the integration of renewable sources with the support of energy storage systems in combination with flexible and efficient conventional generation that will allow a stable, continuous, environmentally acceptable and resilient service.

Thanks for sharing, Daniel. What I'm hearing here echoes what many countries/states/regions must deal with, but you share how PR is almost operating without the safety net of imported power and resources should the grid fail-- which is doubly perilous given the frequency of hurricanes. What that says to me is as PR works towards solutions to create that hardened but also clean but also reliable power grid, it will prove as a leader for other areas that can learn from the lessons they put forth in a truly valuable way. Other island communities will definitely be watching, and even those on the mainland can see how PR accomplishes these goals with more a more challenging set of circumstances. Eager to see that develop!

Daniel Hernandez's picture
Thank Daniel for the Post!
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