The U.S. Department of Energy (DOE) Loan Programs Office announced a conditional commitment for a loan guarantee of up to $559.4 million to subsidiaries of Convergent Energy and Power Inc., an energy storage provider. The loan guarantee is intended to finance a solar system with an integrated battery energy storage system (BESS) and three stand-alone BESS projects across Puerto Rico.
The loan guarantee is for up to $584.5 million of which $559.4 million is principal and $25.1 million in capitalized interest.
The island of Puerto Rico has been ravaged by hurricanes, most recently by Hurricane Ernesto in August, which reportedly left half the island without electricity. The Convergent energy storage systems are expected to enhance Puerto Rico’s grid resilience, reduce the need for fossil fuel generation and lower energy costs.
“Enhancing grid reliability and sustainability in Puerto Rico is critical. We applaud the Department of Energy for recognizing Convergent Energy and Power’s track record of expertise in the energy storage and solar sectors through this conditional commitment from the U.S. Department of Energy Loan Programs Office,” said Frank Genova, CFO and co-founder of Convergent. “We look forward to contributing to the modernization of Puerto Rico’s electric grid and advancing its clean energy goals.”
The project will include the installation of a solar-plus-storage system in Coamo. The 100 MW solar system will be paired with a 55 MW, 55 MWh battery storage system. Three more utility-scale stand-alone battery storage systems are planned for the municipalities of Caguas, Peñuelas and Ponce. These systems are expected to generate power directly to Puerto Rico’s grid .
In addition, the projects will move Puerto Rico further toward meeting its clean energy and climate policy goals. The Puerto Rico Energy Public Policy Act (Act 17) requires Puerto Rico Electric Power Authority (PREPA) to stop coal-fired energy generation by 2028 and shift to a 100% renewable energy mix by 2050.
In addition to building resilience and helping to meet clean energy goals, these systems are expected to contribute to the avoidance of nearly 2.5 million tons of carbon dioxide equivalent emissions on an annual basis by reducing the need to operate fossil fuel powered generation.
As with all conditional loans from the Loan Programs Office, Convergent must develop a comprehensive Community Benefits Plan that ensures engagement with community and local labor, upholds strong labor standards and more. Convergent reports that it is evaluating potential workforce agreements in support of the project expects to establish apprenticeship programs to train local workers to carry out at least 15% of total work hours.
This conditional loan follows several actions taken by the DOE help strengthen Puerto Rico’s grid. In December 2022, President Biden authorized $1 billion for the establishment of the Puerto Rico Energy Resilience Fund (PR-ERF), which is administered by the DOE’s Grid Deployment Office. The $1 billion funding package is supporting residential solar and storage projects in Puerto Rico, with the first installation announced that include subsidized residential solar and battery storage systems through the PR-ERF’s Programa Acceso Solar.
Puerto Rico’s distributed solar capacity reached 842 MW by April this year, while residential storage has reached 1.6 GWh. Consultancy Wood Mackenzie has projected that over the next ten years more than 90% of Puerto Rico’s solar additions will be distributed solar.
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