Call to modernise Puerto Rico infrastructure following hurricanes

Puerto Rico was reeling from the worst hurricane to hit the US in almost 90 years at the end of September, but experts say it could lead to massive foreign investment in a clean power grid in the long term.

Ricardo Rossello, the governor of the US dependent territory, estimates the hurricanes – Irma on September 6 and Maria three weeks later – caused $90bn in damage. Puerto Rico saw its 5840 megawatt (MW) of power generation – linked by 2478 miles of transmission lines – first hit by Puerto Rico’s grid feeds power to around 900,000 homes through 31,485 miles of distribution wire.

Maria destroyed thousands of homes on the island, which has a population of 3.4 million, and left roads and entire towns flooded. It is estimated that 80% of the country’s electrical grid was wiped out. At the start of October, 1.57 million people were still without electricity.

A major dam is also at risk of bursting, while damage to the air traffic control system has severely limited flights to and from the island.

“Puerto Rico needs major investment in its essential infrastructure to bring it at least to the level of the 50 US states,” said Simon Johnson, a senior fellow at the Peterson Institute for International Economics. “After the humanitarian situation is stabilised, policymakers should focus on providing Puerto Rico with a stable, reliable, and cost-effective electric power, generated primarily by renewables and distributed over a smart, resilient grid.”

Mr Johnson said the island requires a series of smaller, more agile power-generation units linked to a sophisticated monitoring and control system. This would ensure immediate startup and generation following any outages.

Moreover, at least 50% of all energy could come from renewables – solar, wind, and tidal – including through the use of advanced storage technologies. This investment would need co-ordinating by the federal government but could create huge opportunities for foreign investors.

“The federal government’s role should be to make Puerto Rico a hub for investing in clean, renewable energy that is resilient to weather shocks,” Mr Johnson added.

The hurricanes have made a poor economic situation on the island a lot worse. By the end of 2017, the Puerto Rican economy is expected to have shrunk back to the size it was in the year 2000, while the US economy will have grown 35%. The economy has been suffering since the removal of Section 936 of the IRS tax code that gave tax incentives to US companies operating in Puerto Rico.