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Puerto Rico Looking to Harness Economic Development from Seawater

By on March 7, 2019

Editor’s note: The following originally appeared in the March 7 – 13, 2019, issue of Caribbean Business.

Among the numerous projects the Puerto Rico Economic Development & Commerce Department (DDEC by its Spanish acronym) is focused on to spearhead the island’s progress, the Puerto Rico Ocean Technology Industrial Park (PROTech) is perhaps the most ambitious of all.

In an exclusive interview with Caribbean Business, DDEC’s executive director, Manuel Laboy Rivera, explained that the project involves a regional industrial park that is expected to generate revenue through manufacturers working with seawater for ocean thermal energy conversion (OTEC).

The renewable energy technology is utilized to harness power from the differences in temperature, known as thermal gradients, between deep ocean waters, which are colder, and shallower or sea surface water, which is warmer.

“This is a project that I dare bet is the most innovative and cutting-edge…of DDEC that we are promoting. With the ramifications and all the direct and indirect impacts this project is going to have, it really is something different,” Laboy said.

However, in this particular case, the idea of developing an industrial park of this nature in the island’s southeastern region—comprising the municipalities of Arroyo, Patillas, Maunabo and Yabucoa—will not be directed toward reducing the island’s dependence on fossil fuel or the generation of sustainable power, but as a real-estate project that banks on the development of related industries that will be created based on the use of the extracted ocean water.

“When this was studied in the 1970s and 1980s, the intention was to [establish] it to generate electricity. That was the plan, the generation of electric power by extracting that energy at that specific point,” the official explained. “But we are focusing more on the spin-off industries of this project. That is the real value of the park; it is not the generation of energy, but the range of activity and applications that this brings.

“At this park, numerous companies that will develop industries based on the use of that deep water, which is at a temperature of 4 degrees Celsius, will be established. Those companies will be there for the water that the park will provide. With this water, we cater to hydroponics, aquaculture and mariculture (cultivation of fish or other marine life for food), algae cultivation, drinking-water production, cooling of air conditioners, orchards, vegetables with high mineral content without pesticides. In short, the possibilities are endless,” he stressed, noting that the model followed for the construction of the park is an experimental plant in Hawaii.

Laboy also insisted that the idea is not necessarily to attract foreign investment to PROTech, but that industries of this type are created among the island’s businesspeople.

Among the development plans for the park, the executive director said the creation of a commercial area with corporate offices, retail sales, space for business development and an event hall are all in the works. An area of production and development where aquaculture crops would be grown, an area for applied technology, several areas where artisans and agricultural markets will be located, a cultural and tourism zone that would include hotels, and an educational area are also part of the plan.

Despite insisting it is not an energy project, Laboy said he does not rule out private investors establishing a pilot powerplant using OTEC technology at PROTech. The executive director argued that this would position the island as a jurisdiction in the vanguard of technology.

New old tech

OTEC technology is based on a physical principle discovered in 1881 by French scientist Arséne Arsonval, who for the first time that year revealed the concept of energy use from the construction of a powerplant to trap the ocean’s thermal energy. Later, in 1930, a student of Arsonval, engineer Georges Claude, built the first plant of this type on the coast of Matanzas, Cuba, which managed to generate 22 kilowatts with a low-pressure turbine. Since then, there have been constant and numerous studies that prove the viability of this technology.

Puerto Rico, which is one of the areas considered by the experts as suitable for the extraction of this energy, also conducted research during the 1970s and 1980s, when a team of oceanographers and engineers from the University of Puerto Rico’s (UPR) Mayagüez campus conducted a pilot project in the area of Punta Tuna in Maunabo.

Moreover, evidence revealed by DDEC shows specific plans of the Puerto Rico Electric Power Authority (Prepa) to develop an OTEC project on the island.

“These are the things people do not know, but the Mayagüez campus did a lot of research on the subject at the time. They used to have an energy and environment center, but it was eliminated. I do not know why. It existed at that time and there were many studies on oceanography, equipment design, operation, mitigation of environmental risks. All that was done in Mayagüez for a project like this, and all that stayed there,” Laboy said.

In 1980, Laboy added, U.S. Congress passed a law that established a plan to promote OTEC stateside and in Puerto Rico.

“The law passed by Congress was called the Ocean Thermal Energy Conversion Act of 1980 and established, by 1990, that the United States had to generate 1 percent of its energy needs from solar energy generated by OTEC—it is considered a form of solar energy—and 20 percent by 2000. This law was repealed in the 1990s.

“The law also indicated there had to be a production of 100 megawatts from OTEC by 1986 and 500 megawatts by 1989, because the cost of the energy developed by this technology had to be competitive, compared to traditional energy sources such as oil, diesel and coal,” the official said. “And this was for the entire United States, including its islands, territories and possessions. That was the goal.

“The national goal was that by 1999, OTEC would generate 10,000 megawatts throughout the United States and its territories, including Puerto Rico. But the lobbyists for the oil industry and nuclear energy killed this law,” he added.

UPR Mayagüez Prof. Jorge Capella Hernández, a research consultant in physical oceanography and ocean modeling, who participated in these first investigations in Puerto Rico, confirmed the existence of comprehensive studies on the feasibility of creating an OTEC plant on the island.

“In Puerto Rico, that began to be investigated in the late ’70s, and several studies were conducted. We made numerous oceanographic cruises because this depends on what is called the thermal gradient—what the difference in temperature between deep water and surface water is—and at the conclusion of these studies that were made at that time, it was determined the resource exists. The difference in temperature is adequate for this type of energy extraction,” the expert said.

“At that time, I participated in those studies because I was an oceanographic technician; it was afterward that I did my doctorate. The first plant I worked with was a floating one. It was done at Punta Tuna because it is the point where deep water is closest to the coast in all of Puerto Rico, but there also are other viable sites. We did studies in Vieques because the Navy wanted an installation there, but the investment [would be] so massive that the project has never been realized,” he added.

Prepa on the OTEC bandwagon

Even more striking is the fact that Prepa already had a concrete plan to begin the construction of an OTEC plant in the island’s southeastern region as early as 1981. In December of that year, Prepa submitted a proposal to the U.S. Department of Energy to develop the first plant of this type in Puerto Rico.

At that time, the public power corporation planned the first anchored plant.

“Nobody would have thought that from such an archaic utility as Prepa, but at that time they were at the vanguard, thinking outside the box. As can be read in the proposal, which we have available, this project was considered one of economic development. They spoke about economic growth, of new industries and job creation, that was what Prepa said at that time,” Laboy said enthusiastically while explaining, for the proposal, that the public corporation used data collected by UPR Mayagüez research.

However, Laboy explained that the Prepa project depended on federal funds. Once the White House administration changed in 1980, the new president, Ronald Reagan, dismissed the development of this type of energy and favored the development of nuclear and fossil fuel energy. The program was immediately shut down.

“If Prepa had sought financing elsewhere, it could have been achieved. Can you imagine how different Puerto Rico would be if that had happened?” Laboy asked rhetorically. Prepa, he added, “bet on the federal government giving them the money, but it was not so. They had a plan that ran from 1986 to 1990. The Prepa plan was to develop this industry until 2030. When we now talk about a 50-year plan, in 1981 Prepa was already talking about that.”

Prof. Capella explained that the extraction of energy using this method is completely safe because the resource is inexhaustible. However, the problems that arise with a project of this kind, he explained, is the environmental impact it could have on the coast and its vulnerability to natural phenomena such as hurricanes and tsunamis.

Although the scientist said he fully supports the use of OTEC technology for energy production, he indicated that the problem basically lies in the government’s lack of interest in its implementation.

“Those of us who have worked on this from the beginning have an inside joke, that every 10 years this monster wakes up and shakes things up and they go back and bury it, and 10 more years go by and it never evolves,” the professor said.

“I would love to see the design implemented. The idea is good, but the implementation is what fails. If we have not been able to manage an electrical system that is known well, and we have tried solar energy to no avail as well, and the wind turbines are all stopped…. If we can’t [manage an electrical system] with what’s easy, how are we going to be able to do it with this, which is of a much more sophisticated magnitude and more vulnerable. It works; it can be done, but I have reservations about how well it could be operated in the long term,” Capella said.

DDEC’s Laboy explained that the first phase of the project, which consists of a preliminary analysis, including the design of the park, began in the summer of 2017 and concluded in December that year. The project is currently in its second phase, with work on the master plan underway and expected to be completed this summer.

“This master plan will be the basis to then issue an RFQ [request for qualification] to open this up to the world with a call for how many companies would be willing to develop this park, but as a real-estate development,” Laboy said, suggesting this would avoid interference from fossil-fuel-industry lobbyists, who would try to delay the project. “It is very premature to give details, but we hope the RFQ will be issued by October,” he said.

Through DDEC, the government is assuming the initial costs to produce the master plan, “which is the investment we are making with the Economic Development Fund of [the Puerto Rico] Industrial Development [Co.], and the law and the regulations allow the use of that money for this purpose. Up to now, about $400,000 has been invested to try to get to the master plan, and depending on how the RFQ comes about, before the end of the year, we can issue the request for proposals,” Laboy said.

He explained that one of the aspects that are being evaluated is how Community Development Block Grant-Disaster Recovery (CDBG-DR) Program funds could be used for this purpose through the allocation administered by DDEC.

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