Last Updated: January 19, 2023

Overview

The Commonwealth of Puerto Rico consists of the easternmost islands of the Greater Antilles in the Caribbean Sea, southeast of Florida. Puerto Rico has no proved reserves or production of fossil fuels. The Commonwealth has some renewable resources in the form of solar, wind, hydropower, and biomass, but relies primarily on imported fossil fuels to meet its energy needs.^1,2,3 Puerto Rico consumes almost 70 times more energy than it produces. Petroleum accounts for 58% of the Commonwealth's total energy use, while natural gas accounts for 28%, coal for about 12%, and renewables about 2%.⁴ Puerto Rico's energy consumption per capita is about one-third of the 50 U.S. states.⁵

Puerto Rico has coastal plains, sandy beaches, and a forested and mountainous interior, where the highest peak exceeds 4,000 feet.⁶ The mountains in the interior separate the main island into two distinct climate regions. The north is relatively humid and the south semi-arid. Overall, the island's tropical marine climate has little seasonal variation, and rain occurs year round.⁷ Because of its tropical climate, 9 out of 10 Puerto Rican households have no heating system.⁸ The Caribbean hurricane season, which runs from June to November, sometimes brings destructive storms. In 2017, hurricanes Irma and Maria devastated much of the Commonwealth's electricity infrastructure and left many residents without power for months.^9,10 Puerto Rico suffered further damage to its electric grid and an island-wide power blackout when Hurricane Fiona struck in September 2022 with 100 mph winds and 30 inches of rain.^11,12

Previously unknown undersea faults on the south side of Puerto Rico triggered a sequence of earthquakes that began in December 2019.^13,14 This culminated in a 6.4 magnitude earthquake in January 2020, which significantly damaged infrastructure on the island and led to power outages.¹⁵ This earthquake was followed by numerous aftershocks, the largest of which was a 5.4 magnitude earthquake on May 2, 2020.^16,17 The earthquake and aftershocks left two-thirds of Puerto Rico's residents without power and significantly damaged the island's two largest power plants.^18,19 The U.S. Geological Survey estimates that aftershocks could continue for years.²⁰

The Commonwealth's population is concentrated on the main island of Puerto Rico, with the highest population density around the capital city of San Juan on the northern coast. There are smaller populations on the islands of Vieques and Culebra. There are also small, uninhabited islands scattered around the main island.²¹ The Commonwealth's population reached 3.8 million in 2000, but declined since then, falling nearly 12% since 2010 to slightly under 3.3 million in 2020.²² Puerto Ricans are U.S. citizens, and some have chosen to move to the U.S. mainland, in part because of the island's prolonged struggling economy and natural disasters, although Puerto Rico's economy improved in mid-2022 following a downturn during the COVID-19 pandemic.^23,24 About 133,500 people left the island in 2018 after Hurricane Maria hit.²⁵ This migration trend complicates Puerto Rico's recovery efforts.²⁶

Agriculture, mainly sugar cane, dominated Puerto Rico's economy until the 1960s.²⁷ Today, agriculture, with milk, grain, and field crops accounting for more than half the value of agricultural products sold, is a relatively small part of Puerto Rico's economy.^28,29,30 Private sector investment is concentrated in the manufacturing sector, especially in pharmaceuticals and medical devices, electronics, aviation, information technology, and renewable energy.^31,32 However, as federal tax incentives phased out in 1996, investments in the manufacturing sector decreased.^33,34 Employment in the Commonwealth government has declined since 2009, but the public sector still employs about one in five workers.³⁵ In 2016, because the Commonwealth faced more than $100 billion in debt and unfunded liabilities, Congress established a financial oversight board through the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) to restructure the island's debt and stabilize its economy.^36,37 The oversight board's bankruptcy plan to reduce Puerto Rico's debt by 80% was approved by a federal court in March 2022.^38,39

Electricity

The Puerto Rico Electric Power Authority (PREPA, also known as Autoridad de Energía Eléctrica, or AEE) supplies Puerto Rico's electricity. PREPA is a government agency that owns the electricity transmission and distribution systems for the main island, Vieques, and Culebra, as well as 75% (about 4,500 megawatts) of the installed utility-scale (1 megawatt or larger) electricity generating capacity.^40,41 Founded in the 1920s as a water resource agency, PREPA's responsibilities grew over the years to encompass island electrification.⁴² It serves more customers—about 1.5 million—than any other public electric utility in the United States. However, on a per-customer basis, PREPA provides less than half as much power as similar U.S. mainland utilities.⁴³

In fiscal year 2022 (July 2021 to June 2022), fossil fuel-fired power plants generated about 97% of Puerto Rico's electricity. Natural gas fueled about 43%, petroleum about 37%, and the island's one coal-fired power plant about 17%. Renewables accounted for about 3% of the island's electricity generation. By comparison, less than 1% of the electricity generated in the 50 U.S. states is provided by petroleum.⁴⁴

The commercial sector consumes about 45% of Puerto Rico's electricity, the residential sector accounts for 43%, and the industrial sector makes up about 11%. Puerto Rico's per capita electricity consumption is about half that of the 50 U.S. states.^45,46 PREPA's heavy reliance on petroleum means that Puerto Rican power prices fluctuate with international petroleum prices and vary monthly with fuel and purchased power costs.⁴⁷ In 2021, Puerto Rico's average electricity price was higher than in all but one U.S. state, Hawaii.⁴⁸

Puerto Rico's electric power sector has suffered from decades of mismanagement and underinvestment and, most recently, natural disasters.⁴⁹ In September 2017, Hurricanes Irma and Maria made landfall two weeks apart and destroyed much of Puerto Rico's electricity transmission and distribution infrastructure.⁵⁰ Generating facilities were not as badly damaged as the electric grid. Still, PREPA's largest generating plants are in the south, while the largest population concentrations are in the north, making the system dependent on its 2,600 miles of transmission and about 32,000 miles of distribution lines.^51,52

In January 2020, the 6.4 magnitude earthquake that hit Puerto Rico significantly damaged the island's two largest power plants, Costa Sur and EcoEléctric.⁵³ The earthquake caused widespread power outages and shifted Puerto Rico's electricity generation energy mix to a higher reliance on petroleum, as the two damaged power plants primarily used natural gas for electricity generation. The 766-megawatt Costa Sur is the largest power plant in Puerto Rico, and represents 56% of the island's natural gas-fired electricity generating capacity.^54,55

After the hurricanes and earthquakes, PREPA had to both re-build its electricity infrastructure and restructure its business, after operating in bankruptcy protection since 2017. In 2018, as part of the restructuring plan, the Puerto Rico legislature approved privatizing parts of PREPA. Under the plan, a private entity will manage, operate, and maintain PREPA's generation assets and electricity transmission and distribution system. In June 2020, the private entity LUMA Energy, made up of a group of U.S. and Canadian companies, was selected to operate Puerto Rico's electricity transmission and distribution system. In June 2021, LUMA Energy began its role to reduce power interruptions, provide reliable electricity service to the island's residents and businesses, and upgrade the power grid.^56,57,58 To assist in that effort, the Federal Emergency Management Agency (FEMA) provided more than $9.4 billion in funding to transform Puerto Rico's electrical system.⁵⁹

Petroleum

Puerto Rico has no crude oil production, refining capacity, or proved reserves. However, a 2013 U.S. Geological Survey assessment identified potential undiscovered crude oil resources in a subsea formation south of the island.⁶⁰ Petroleum accounts for about three-fifths of the energy consumed in Puerto Rico. The island imports all of its petroleum products, mostly through the port of San Juan, with minor shipments also arriving at the ports of Ponce, Guayanilla, and Yabucoa.^61,62 The last of Puerto Rico's five petroleum refineries, located at Yabucoa, shut down in 2009, joining four other island refineries that closed between 1992 and 2005.⁶³ However, 4.6 million barrels of tank storage and shipping facilities at the Yabucoa site, near the southeast corner of Puerto Rico, continue to be used as a crude oil and refined products terminal.⁶⁴

Motor gasoline, residual fuel oil, and jet fuel account for about 8 out of 10 barrels of petroleum products imported by Puerto Rico and most of it is used by the Commonwealth's transportation and electric power sectors.⁶⁵ Petroleum-fired power plants generate about two-fifths of Puerto Rico's electricity and fuel more than 82% of the island's utility-scale generating capacity.^66,67 Puerto Rico allows use of conventional motor gasoline without ethanol.⁶⁸ Puerto Rico's per capita consumption of petroleum is about 10 barrels per year, compared to 20 barrels annually for the 50 U.S. states.^69,70,71

Natural gas

Puerto Rico does not produce natural gas and has no proved reserves. However, the 2013 U.S. Geological Survey assessment also identified possible undiscovered natural gas resources in a subsea formation south of the island.⁷² Natural gas arrives in Puerto Rico at two liquefied natural gas (LNG) import terminals, one located near Ponce at Guayanilla Bay in the southwest and one at the Port of San Juan in the north.^73,74,75,76 The regasified LNG is used to fuel electricity generation at the 766-megawatt Costa Sur power plant and the 580-megawatt EcoEléctrica power plant. There are also several small natural gas-fired generating units at industrial sites.⁷⁷ The imported LNG mostly comes from Trinidad and Tobago, with smaller shipments from Nigeria, Oman, and Spain.⁷⁸ Minor amounts of LNG from the U.S. mainland are also shipped to Puerto Rico to supply fuel to industrial customers and container ships.^79,80,81

Beginning in 2012, LNG imports increased to support PREPA's conversion of the petroleum-fired Costa Sur generating station to dual-fuel capability with natural gas and more recently, the conversion of the San Juan petroleum-fired generating station to natural gas.^82,83,84 PREPA has long planned to add more natural gas-fired electric generating capacity. However, PREPA's Integrated Resource Plan approved by the Puerto Rico Energy Board in August 2020 supports more new renewable energy generation rather than new natural gas projects.^85,86,87 Puerto Rico's typical per capita natural gas consumption is about one-fourth of the average for the 50 U.S. states.^88,89

Coal

Puerto Rico has no coal reserves and produces no coal.⁹⁰ The Commonwealth has one coal-fired electricity generating plant, located at Guayama. The 454-megawatt plant began operations in 2001.⁹¹ Puerto Rico consumed 1.4 million tons of coal in 2021, the lowest amount since 2018. Almost all of it was bituminous coal to fuel the power plant.⁹² Puerto Rico plans to phase out coal-fired electricity generation by 2028.^93,94

Renewable energy

Puerto Rico's renewable resources include solar energy, wind energy, hydropower, and biomass. Under the Puerto Rico Energy Public Policy Act, PREPA must obtain 40% of its electricity supply from renewable resources by 2025, 60% by 2040, and 100% by 2050.⁹⁵ For fiscal year 2022 (July 2021—June 2022) about 3% of PREPA's electricity came from renewable energy, with solar photovoltaics (PV) accounting for about three-fifths and wind power accounting for about two-fifths of total renewable generation. The remainder came from hydroelectric and landfill gas-fueled facilities.^96,97 Puerto Rico is home to both the largest wind power farm and one of the largest solar power generating facilities in the Caribbean.^{98,99,100,101}

Most renewable generating facilities survived Hurricane Maria with modest amounts of damage, but the 20-megawatt Humacao solar farm and the 23-megawatt Punta Lima wind farm—both on Puerto Rico's east coast where the eye of the storm came ashore—were badly damaged.^102,103 The solar PV farm was rebuilt, but the Punta Lima wind farm remains non-operational.^104,105 The earthquakes in early 2020 did not damage any renewable generating facilities. The solar microgrids using rooftop solar panels, which were installed primarily by private, federal, and non-profit organizations after the hurricanes in 2017, were able to maintain power supply in some communities following the earthquakes.¹⁰⁶

Solar is Puerto Rico's fastest growing source of renewable generation, increasing from 0.5% of total generation in 2015 to 1.7% in 2021.¹⁰⁷ The largest solar farm, the 45-megawatt Oriana facility, came online in late 2016 and accounts for about three-tenths of the Commonwealth's solar generating capacity. About 25 megawatts in new utility-scale solar power and related storage battery capacity is scheduled to come online in 2023.^108,109 PREPA plans to procure 3,750 megawatts of renewable electricity generating capacity and 1,500 megawatts of battery storage by 2025.^110,111 Additionally, the U.S. Congress passed legislation in December 2022 that provides $1 billion to install solar panels and related storage batteries at the homes of low-income and disabled residents in Puerto Rico.¹¹²

Puerto Rico currently has one operating utility-scale wind farm, the 75-megawatt Santa Isabel facility on the southern coast, which started generation in 2012. There is a smaller 0.6-megawatt wind turbine that is out of service at the Fort Buchanan U.S. Army Garrison in San Juan, but is expected to come back online in 2023.¹¹³ Other wind projects have been proposed, but Puerto Rico's onshore wind resources are limited. The island has more offshore wind potential.¹¹⁴

Puerto Rico's 20 hydroelectric generating units, most of which are more than 70 years old, are sited on reservoirs that often supply drinking and irrigation water as well as electricity.^115,116 Hydropower generation varies significantly, affected by rainfall, competing water uses, and lack of funds for maintenance. However, under the new Integrated Resource Plan, PREPA is exploring options to update these facilities as part of its requirement to increase the use of renewable energy.^117,118

In the past, PREPA encouraged development of municipal solid waste, landfill gas, and other waste-to-energy facilities, but proposed facilities have faced local opposition and were canceled.¹¹⁹ Two landfill gas generating facilities, located at Fajardo and Toa Baja, have a combined capacity of 6.4 megawatts and began producing electricity in 2016 and 2020, respectively.¹²⁰ However, many of the island's landfills cannot be used for electricity generation because they violate federal standards and the U.S. Environmental Protection Agency has ordered some of them to close.^121,122,123

Endnotes

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