May 18, 2017
“I was inspired by the UREx SRN Scenario Workshop we had in San Juan this past February 3rd to ruminate about the future of energy and food in Puerto Rico. I chose to take a decidedly qualitative approach to do so and have been working on a narrative for a future scenario.
I’ve tried to paint a picture of a resilient and adaptive Puerto Rico – I tried not to rely on any science fiction to create this future, and tried to keep it as plausible as possible. Set in the year 2080, the narrative describes a series of hypothetical (but possible) events, a set of proactive governance actions and policies, and citizen responses to those events and interventions. The narrative is based on expert-opinion and extrapolation of trends in energy markets, technology, and policy development, as well as recent events in Puerto Rico. It’s not necessarily what I think will happen, on the other hand I don’t believe that is it too utopian or naïve. A great number of details were left out. To be sure, the essay reflects my ideas and does not represent any official statements or views on the issue.”
Dr. Stephen Balogh (far left) at the San Juan Scenario Workshop
Date: March 13, 2080
As we near the turn of the twenty second century, the energy system in Puerto Rico has been redesigned around a simple principle, Flexi+ or “Flexi-Plus.” The Flexi+ system uses the principal of resiliency to create systems which are safe-to-fail rather than fail-safe. Flexible production and consumption systems provide balance and stability to the electrical system (flexi) as well as take advantage of lower cost clean electricity during periods of excess production by shifting consumption temporally (the “plus”).
Because the island is geographically isolated, the electrical grid must maintain a precise balance between production and consumption. In the past, large thermal-electric plants provided a baseload, while nimbler peaking plants balanced changes in demand throughout the day. These stock-based electrical systems could ramp production up and down to account for daily, weekly, and seasonal changes in the demand profile, as well as during periods of peak energy use, e.g. in midday in heat waves. After the installation of large solar arrays and wind farms which displaced fossil-based thermal plants, the energy mix transitioned to a higher proportion of renewable electricity generation. By pursuing this path, Puerto Rico has reduced its vulnerability to volatile fossil energy markets, reduced its carbon emissions, and reduced human health impacts by improving air quality. The transition, however, was not smooth or linear. The introduction of stochastic, or flow-based, electrical production taxed the aging electrical grid by introducing larger fluctuations in energy generation. For a time, these fluctuations were dealt with by increasing the number of peaking plants and phasing out inefficient and polluting baseload thermal plants. These corrections were short-lived, however, as peaking plants were quite expensive to maintain and operate and the loss of thermal plants resulted in brownouts during sustained lulls in renewable energy production. Overproduction during the evening hours or during periods of demand-production mismatch led to frequent blackouts. When the supply- side management options appeared to be exhausted and customer frustration was at its peak, the system became ripe for reorganization. The precursors to the Redundancy and Energy Protection Act were passed in 2050, and the planning process brought together politicians, electricity producers, planners, government scientists, academics, as well as community groups and other stakeholder representatives to come up with an island-wide energy policy. Out of necessity, the system evolved from energy on demand to the current Flexi+ system.
Today’s electrical grid
Today’s energy system shares many similarities with its predecessor. For the most part, the electrical grid functions as it always did – consumers still plug their appliances and electronic devices into the wall, they still pay a monthly bill, and little in the way of complex hardware or monitoring is needed. Fossil fuel still plays an important but diminished role: Load balancing is still provided by coal-to-gas, natural gas, and smaller amounts of biomass-to-electric plants.
However, the progressive carbon tax makes fossil fuel combustion for electricity production very expensive. Because of this, the focus on load balancing has shifted to demand-side management and two tiers of service have been created: The standard, uninterrupted tier and the Flexi+.
Standard tier
The uninterrupted, or “Standard,” tier is occupied mainly by the moderately wealthy and select businesses. Consumers choosing this tier pay premium service fees and per kWh rates. In return they receive unrestricted access to electricity and 99.5%+ reliability of service. Once seen as a status symbol, the proliferation of technology and energy storage has led to a decline in the number of customers paying premium prices for electricity each year. The high cost of standard/uninterrupted service opened up space for energy storage systems and small generator sets for backup. The very wealthy now tend to have hybrid off-grid or microgrid systems which protect them from fluctuations. Continuous electricity in these systems is provided through a combination of solar PV panels, battery arrays with the capacity to sustain 2-4 hours’ worth of normal operation, and generator sets run on CNG or gasoline for longer periods of interruption. Some communities and several resorts have created “oases” by installing similar microgrids. In times of critical electricity need (which requires a governor’s decree) the small gen-set operators are provided with carbon tax credits for running grid-tied systems with excess production capacity. The end result for customers in oases and in the standard tier is uninterrupted (less than 0.5% downtime) and uncapped electricity service. The island benefits as a whole, as payments from these customers support the operations and maintenance of peaking plants and backup systems. Supply interruptions where the utility is determined to be at fault, or when exceeding contractual downtime allowances, lead to swift reimbursements to the customer and substantial fines for the utility.
Note: A small select number of subsidies are available for disabled/constant care medical customers, those, for example, which require oxygen or a ventilator
Flexi+
Flexi+ customers, on the other hand, pay lower service charges and lower per kWh rates than standard service. However, at peak demand or during demand/RE production imbalances, electric service to these homes is interrupted. Typically, these interruptions are short-lived – less than two hours – and for most, the effects are minimal. The “plus” part of the name refers to late night hours of discounted electricity which can be used to refill battery and “A-C” banks. These customers also have access to discounted (occasionally even “free”) electricity when wind and solar production exceeds cumulative demand.
When the system first rolled out, being a Flexi+ customer meant enduring a hardship. Pundits argued whether unfettered and uninterrupted access to energy was a human “right” or whether the two tiered system represented an environmental justice or social equity issue. Free market economists argued that Flexi+ would open up new markets and spur technological advances which could eventually be exported to the mainland in areas with high penetration of renewable energy. In the end, both social justice advocates and free-market economists were partially proven right and adjustments to the system were made. Subsidies were provided for low-income customers which enabled them to purchase “first adopter” technologies to decrease the impact of interruptions (for example, Flexi-bulbs, and small A-C bank systems). The free-market did embrace the new technologies, and the island became an in-situ laboratory for the development of flexible technologies. Exports of flexible tech products increased GDP growth and employment.
Flexible production systems
PREPA and the legislature developed and passed large tax breaks to attract companies that employ flexible production systems. These are manufacturers (and some service producers) that can ramp production up and down to match renewable energy output and manage peak load demands. “Kilo-” and “megafactories” in San Juan and Ponce, for example, produce standardized modular batteries for home and vehicular use. Local suppliers to the kilofactories synthesize chemicals and refine or recycle metals and other materials needed for battery production. All of the vertically integrated systems on the island fall into the same energy “rhythm” which allows them to avoid supply shortfalls or material gluts. Other demand production systems include cement manufacture (ideal because of batch processing) and remote automated concrete removal and recycling systems. Some financial service providers created flexible transaction processing systems to take advantage of the tax credits and also to provide redundancy for data storage and processing. Financial service companies shift transaction processing to these systems during periods of low energy cost.
Energy storage
Battery storage and supercapacitor capacity has become cheap and ubiquitous in the latter part of the twenty-first century. Almost all appliances sold on Puerto Rico come standard with built- in battery backup. Even lighting systems have increased redundancy and built-in backup. LED Flexi-bulbs contain individual energy storage that cuts lumen output but maintains operation for at least two hours.
Laptop computers and cell phones were the first step in the social evolution of power management. Soon after the Redundancy and Energy Protection Act was passed, internet routers, TVs, and other small electronic devices evolved to the “cell-phone model” of energy use, and for the most part bypassed the need for large battery systems which were unaffordable to 90% of the population. The US congress passed the Battery and Storage Standardization Act in 2060 to reduce waste production and pollution related to battery production, and to increase production efficiencies. The BSSA did not specify any particular technology or materials, but required easy disassembly and polymer separation to recover valuable materials. Industry and government agreed to standard cell sizes and to responsibility to take back batteries at end-of- life. As electric vehicles and electric hybrid vehicles proliferated, so too did the availability of “Still-Useful for non-transportation” batteries. After coming off the road, these battery cells were safety tested and then entered the Secondary Use market. “SU2” batteries can be found in refrigerators, freezers, TVs, and even dishwashers and microwaves. Most households easily handle electrical grid interruptions.
REPA at the household scale
One of the more controversial sections of the Redundancy and Energy Production Act (REPA) requires all houses to produce 10% of their own energy use. Production targets are based on square feet of living space, and most homeowners opt to meet this requirement through solar hot water production, but many condominium and homeowner associations are beginning to invest in community-based solar PV installations. The “diezmo” or “tithe” as it has become known colloquially was implemented using a carrot and stick approach. REPA dictated that energy production must be in place at the time of sale, or the seller must make concessions and the buyer must install within two years. Realtors and mortgage brokers lobbied against the changes and ultimately the transition period was subsidized. Carrots took the form of income tax breaks equal to one third of the investment cost and government-subsidized low-interest second mortgages. The tax breaks were phased out over a ten-year period to incentivize early adoption. PREPA and private renewable energy producers provide consolidated investment opportunities for households which do not have the roof-space or land needed to comply with the “diezmo” but these are disincentivized to maintain the benefits of a decentralized energy production systems.
Carbon tax and tourism
Tourism-based economies cringed at the thought of carbon taxes, and joined up with thermal electric plant owners and the automotive industry to lobby heavily against them. In the beginning Puerto Rico lead the anti-tax charge. However, the governor’s office and legislators soon realized that by getting ahead of the curve and voluntarily adopting a carbon tax system, that Puerto Rico could be proactive rather than reactive, and help shape policy in a way that was fiscally responsible and advantageous to the domestic tourism industry.
To reduce the cost of travel to the island, both the government and private industry subsidize a portion of the carbon tax for flights. Hotels and resorts subsidize the carbon taxes to attract customers and encourage exclusive use of their amenities. Tourism-related businesses such as bars, restaurants and recreation services pool credits and create packages with hotels. Unsubsidized tourist travel is somewhat of a rarity these days – even independent hoteliers and home-share operators participate in carbon tax sharing schemes. Larger hotels and corporations have the capital to generate excess clean power to generate carbon tax credits and pass these credits to vacationers. The government employs numerous credit generation programs, one of the most lucrative of which was the revived “cash for clunkers” program that invested tax revenue to generate carbon credits by removing internal combustion and inefficient vehicles from the road. Carbon tax credits from the diezmo accrue 60% to the homeowner and 40% to the government. However, the diezmo has been providing a decreasing stream of credits for both, as credits are based on the island’s energy mix, which is more than three-quarters renewable as of this year. Seasonal purchases of carbon credits by the government stabilize the carbon credit market. Hotels and tourist service providers also purchase credits on the open market and pass them through to tourists.
Transportation
Transportation remains the leading source of atmospheric pollution and carbon emissions in Puerto Rico. Population losses during the second and third “diasporas” of the early twenty first century eventually stabilized the population at about 40% below its peak in 2000. Some areas were more resilient to population loss, and some areas even saw unexpected growth – e.g. Ponce’s population increased by 25% after battery companies and their suppliers chose to locate there rather than San Juan. Decreased population density reduced public transportation options to a handful of car sharing programs and meager bus lines in urbanized areas. Despite the high price and high taxes on gasoline, many families have no choice but to run their aging conventional vehicles. The diasporas left thousands of abandoned vehicles on the island. Auto finance companies cut their losses and tried to sever claims to the titles as not to be responsible for the cost of their disposal. Municipalities and airports amassed vast parking lots of unclaimed vehicles. Eventually the cars and trucks were sold off or had their titles laundered and made their way back into operation. Car prices remained low for decades and auto imports to the island were cut in half. Thus, despite the “cash for clunkers” schemes and other attempts to incentivize electrification, many older conventional cars and early hybrids remain on the roads today. Only entropy seems to be on the side of environmentalists. Eventually the cars become too expensive to fix. In one sense, the slow march to electrification has been a blessing. The island’s transition to clean power was less complicated than if it faced a more drastic increase from rapid electrification of the transportation system.
Autonomous vehicles (AV) never took off in Puerto Rico, although the major cities and towns were LIDAR-mapped and prepped for their introduction. Small caravans of driverless cars provide shuttle service in Old San Juan and along Condado, but these are mainly novelties for tourists. The big names still dominate the ridesharing business, but open-source rideshares and the common jitney are also popular. Interestingly, a not-so-insignificant portion of the tourists to the island come just to drive, precisely because they can still drive conventional gasoline vehicles on highways that lack the safety-chain caravans of autonomous vehicles. The former teenagers of the 2020s remember life before AV, and pay handsomely for the opportunity to tour the island, to “change lanes” when they want, and listen to the hum of a well-tuned engine.
The biggest change on the road is the addition of fleets of electric-assist bikes. Cheap SU2 batteries and small electric motors allow Puerto Ricans of all levels of physical fitness to enjoy biking. After a tipping point was reached some 10 to 15 years ago, bikes outnumbered vehicles on the road enough that safety increased and dedicated bike lanes and bike-only streets formed organically. Utility- and cargo-bikes allow users to carry groceries home from the store or the kids home from school. Tourists love the opportunity to leave their cars behind and tour regions of the island by bike.
Agriculture and food
With few levers available to the state to stimulate agricultural production, most former farmland remained unproductive throughout most of the twenty-first century. A return to farming movement arose at the height of the third diaspora, after the dissolution of the university system. Small grants, agricultural tax breaks, and a loan forgiveness program spurred the expansion of small truck farms and cash crop farming. Truck farms survive mainly through programs which direct a quarter of federal and state supplemental nutrition assistance funds to domestic producers. SNAP participants can obtain 10% more food by choosing an on-island source of food, and farmer’s markets are prevalent in most towns and throughout neighborhoods in the cities.
The legalization of marijuana created a farming boom and cleared land for cannabis cultivation, but Puerto Rico was a late entrant to the market, and oversaturation and a limited export demand doomed most of those ventures. Small-scale sugar cane and tobacco farms have found some success in the export market, as mainlanders and Europeans chase “authentic” experiences from afar. A few larger state-supported farms produce staple foods such as rice, beans, and some root crops. These farms have a steady following of customers but are largely reliant on state support, which is funneled through agricultural resilience and education programs designed to maintain human capital and knowledge of local growing techniques.
For the most part, it was social, rather than agricultural, changes which increased the resiliency of the Puerto Rican food system. For years, the public was unaware of the precariousness of the import-dependent and just-in-time food distribution system. Two events brought these vulnerabilities to light. The first was the dock workers strike, born of austerity measures during the “Gran encogimiento” of the 2020s. The second event was the massive storm surge and coastal flooding damage to the port after Hurricane Hamilton in 2032. Both events led to food shortages at local supermarkets, and an increasingly hungry and agitated population. The troubles during the aftermath of Hurricane Hamilton were compounded by food spoilage which resulted from frequent power outages. When the shelves of the supermarkets were finally filled again, Puerto Ricans filled their bellies, and then stocked their pantries, vowing never to go hungry again. To this day, the typical family has at least 2-3 weeks of food stored in the home: dry and canned goods, some frozen meat, and usually a few potted vegetable plants or fruit trees in the yard to add nutrients and flavor. The government also maintains some emergency food stocks and funds food resiliency programs through community centers, schools, and churches.
Puerto Rico still relies on energy and food imports, and is far from self-sufficient. However, the island and its inhabitants have developed an infrastructure and a society which is far more resilient to external and internal disturbances. Some of these changes were born out of necessity, while some changes were the result of novel thinking and experimentation. The experiments continue today – continuously adapting and planning for a bright and resilient future that is shared by all.
The views expressed in this blog are those of the author and do not necessarily represent the views or policies of the U.S. Environmental Protection Agency.