Devastation in Puerto Rico Could Produce a Revolutionary Power Grid

Authors: Lewis Milford, Clean Energy Group, and Mark Muro, Brookings | Projects: Resilient Power Project, Clean Energy Innovation

Disasters often lead to unexpected and swift technology innovation. The calamitous collapse of Puerto Rico’s electricity system might be the next example of that phenomenon.

As we know, Hurricane Maria devastated the island. Now, just a few weeks out, only about 15 percent of the island has electricity. Restoring its existing power grid of big diesel burning plants and long transmission lines to customers could take many months, if not years.

The horrific situation reminds us of the critical role of electricity in our lives, and the fragile nature of the centralized electric system there and elsewhere. With severe power outages, as in previous storms from Katrina to Sandy, and those most recently in Florida and Texas, tragedies mount.

In Puerto Rico, hospitals have been evacuated. Major pharmaceutical companies that make the country’s life-saving drugs are themselves on life support with diminishing supplies of diesel fuel. The island’s economy is at a standstill. Lives remain at risk.

A man without power for his medical equipment died last week because he could not get oxygen. His daughter said, “Because of the electricity situation, a lot of people died, and are still dying. You can’t get sick now.”

We know that many diesel generators—the current technology of choice for backup power in many critical facilities—failed in Puerto Rico, as they have in all modern disasters, from the New York City blackout, to Katrina, Sandy, Harvey, Irma, and now Maria. They flood, or simply stop, when the fuel is gone.

Into this dangerous power breach comes Elon Musk, the peripatetic disruptor of multiple industries, from autos to space travel, and now the electric power sector. He has already started sending Tesla batteries to Puerto Rico, to be installed with solar as an emergency measure to provide power to critical facilities. He’s not the only one.

Sonnen, a German company with manufacturing facilities in the United States, is installing solar and storage systems in Puerto Rico at emergency shelters. Their systems can provide critical power for cell phones, lights and refrigeration.

Beyond these short-term, emergency measures, Musk says he can repower Puerto Rico’s grid with solar and battery storage, an alternative that will not rebuild the grid in the old way. Instead, it would make the island’s electric system more resilient, more local, more independent, and less costly.

He says he can do it quickly, following his example in American Samoa and in other islands now turning to distributed, onsite solar and storage to power homes, buildings and commercial buildings. There, solar and batteries can be located nearer the customers and displace or reduce reliance on big, central power plants to send them electricity.

It’s not as crazy as it might sound.

On the U.S. mainland, the “Holy Grail” of renewable technology—battery storage—is taking off like never before. Batteries combined with onsite solar can provide energy resiliency, reduce electric bills, and deliver the flexibility to allow for increased deployment of intermittent renewable power. There are now probably over a thousand solar and storage systems either installed or in project pipelines in states across the country.

Solar+storage technologies have become proven and accepted. This is beyond an experimental stage.

Businesses see these technologies as a reliable way to save money, while communities install them to keep the lights on when utility power goes out. Utilities are also turning to energy storage on a large scale, to reduce their own costs and integrate more wind and solar onto the grid.

A key driver behind this resilient power trend is steadily declining prices, with lithium-ion battery costs falling dramatically in the last few years.

But solar and storage is still a small market today.

It often takes a dramatic moment to shift such a niche technology to mainstream success. This happened before in another disaster—the San Francisco earthquake of 1906—with the automobile.

As told in the bestselling book Seabiscuit, Charles Howard, the champion racehorse’s eventual owner, opened a Buick dealership in the city in 1905. At the time, there were far more horses in the city than cars. Cars were considered a novelty, decidedly not better than horses for basic transportation.

When the earthquake hit a year later, he used his showroom autos as emergency vehicles and ambulances. They went down streets on fire where horses refused to go.

The San Francisco disaster put the automobile on the map. In that carnage, the few “horseless carriages” in town proved to a skeptical public that the car was reliable and more than a fancy toy for the wealthy. A niche technology went mainstream. The automobile era began.

The same technology transition could happen with solar and energy storage in Puerto Rico. That is a hope but there’s no certainty.

It would take a dedicated group of companies, a local government willing to be creative and strong federal support for rebuilding the power system in a more resilient way. Merely redoing the same diesel-dependent, centralized electric system, the status quo, should not be an option.

Having said that, the Puerto Rico situation remains an enormously challenging and humbling human tragedy. There shouldn’t be any high fives or self-congratulation in the discussion about solutions to the many desperate problems the people of the island face. Untold obstacles stand in the way of all these options, including replacing the power system.

When it comes to electricity, there might be a small silver lining for the island’s future. It is possible to rebuild the power system with solar and storage to help the people better withstand the next storm.

If it works, we might see the model for a new electricity system come about in our time, in the same way that the automotive industry emerged from the catastrophe in California a century ago.

***

This blog post was originally published by Brookings Institution in The Avenue.

The Connecticut Green Bank: Innovation in Finance Sparks New Model for Public/Private Investment in Clean Energy

Author: Clean Energy States Alliance | Projects: Clean Energy States Alliance, Clean Energy Finance

The Harvard Kennedy School’s Ash Center for Democratic Governance and Innovation announced in July that the Connecticut Green Bank had won this year’s Innovations in American Government Award. The Ash Center award recognizes excellence and creativity across a wide range of government initiatives, from technology and public health programs to conservation and education. That Connecticut’s pioneering clean energy financing model won this prestigious award, selected from among thousands of entries, speaks to the important role of states in accelerating the renewable energy transition.

Connecticut first established the Green Bank in 2011 through Public Act 11-80 as a key part of the state’s strategy for achieving its energy and climate goals. The main objective was to have cleaner, cheaper, more reliable sources of energy while also creating jobs and spurring local economic development. Leveraging private investment dollars with limited public funds is at the heart of the green bank’s operation.

Since its inception, the Connecticut Green Bank has attracted over $6 of private capital for every $1 of public funds committed. Overall, the Connecticut Green Bank has achieved nearly $1.1 billion in clean energy investment across the state. This investment has supported almost 25,000 projects and more than 230 megawatts of clean energy, resulting in greenhouse gas emissions reduction of 3.7 million tons. Over 13,000 jobs have been created, translating to an estimated 7.5 to 20 percent of total job creation in Connecticut, and clean energy prices have declined by about 20 to 30 percent.

Among the Green Bank’s most successful programs is Commercial Property Assessed Clean Energy (C-PACE), which allows commercial and industrial property owners to make clean energy or efficiency upgrades at no upfront cost. The payment is made over time through property tax bills. In July 2017, Connecticut’s C-PACE program reached a milestone of providing $100 million total in closed project financing. The Green Bank’s residential financing programs—including the Energize CT Smart-E Loan, other homeowner products, and the multifamily programs—also surpassed the $100 million mark in total dollars deployed this year.

Another residential sector highlight is that deployment of residential solar PV in low- to moderate-income census tracts is now nearly on par with the distribution of owner-occupied homes in those tracts, driven by the widespread availability of no-money-down, third-party-owned financing models, including the Green Bank’s partnership with PosiGen, which combines a solar lease with an energy efficiency package.

“The success of Connecticut’s Green Bank is spurring the adoption of similar efforts by states and cities across the country, and illustrates how Hartford’s innovative approach to green energy financing can create jobs, reduce harmful greenhouse gas emissions, and lower energy bills,” said Stephen Goldsmith, Daniel Paul Professor of the Practice of Government and the Director of the Innovations in American Government Program at Harvard’s Kennedy School of Government.

The Connecticut Green Bank’s pioneering work has since been replicated in several other states and one county, and its impact underscores the important role of states as laboratories of experimentation. When it comes to building a 21st century clean energy economy, states are leading the way.

“It is an important time to be working on clean energy at the state level,” noted Warren Leon, executive director of the Clean Energy States Alliance (CESA), a national nonprofit organization that serves as a consortium to support states with renewable energy programs. “The Connecticut Green Bank represents the kind of ingenuity and innovation that is necessary to advance clean energy. While there is no magic bullet or easy solution, innovative financing is a critical piece of the puzzle.” The Green Bank’s C-PACE program was also awarded a State Leadership in Clean Energy Award by CESA in 2014.

The State of New York created its own green bank in 2013. The NY Green Bank, which operates as a division of NYSERDA, invested $291.6 million in clean energy during fiscal year 2016-2017. California followed suit in 2014, establishing the California Lending for Energy and Environmental Needs (CLEEN) Center as a part of the state’s infrastructure bank. CLEEN supports energy efficiency upgrades and LED lighting installations for public institutions. The Hawaii legislature created its version of a green bank, the Hawaii Green Infrastructure Authority, in 2013. In 2015, Rhode Island expanded the mandate of the Rhode Island Infrastructure Bank to include green energy initiatives, and the Bank adopted Connecticut Green Bank’s successful C-PACE program. Also in 2015 Montgomery County, Maryland established the first county-level green bank.

Harvard’s Ash Center award included a $100,000 prize to support replication and dissemination of the winning innovation. The Connecticut Green Bank has committed the prize money to the further development of a green bank academy with its partner in the effort, the Coalition for Green Capital. The academy will provide educational resources for policy makers and students as well as, current and future green bankers, with the goal of “accelerating the successful creation and efficient operation of green banks through education.”

“The Connecticut Green Bank has sparked a green bank movement. Our simple promise of increasing affordability and accessibility to green energy has evolved into a greater commitment to our stakeholders,” states Bryan Garcia, President and CEO of the Connecticut Green Bank. “We believe that everything we do, we do to help families thrive and businesses grow. We do it in the interest of achieving inclusive prosperity not only within Connecticut and across the country, but around the world.”