Community Organizers Bank Puerto Rico Trash Will Fuel Island’s Growth by Forbes – Entrepreneurs

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A motley crew of community organizers from New York and New Jersey think Puerto Rico’s energy future and economic health is in its trash.

After helping residents in Puerto Rico for the past year recover from Hurricane Maria, which ravaged the island in September 2017, the group has a vision for economic recovery and prosperity that starts with turning the island’s waste into biogas and organic fertilizer.

The organizers will conduct feasibility studies in January in three municipalities—Aibonito, Orocovis, and Villalba–to see if they have enough waste in their landfills that can be converted to biogas for electricity.

“If you make one model and you do it right, they can duplicate it everywhere,” said David Aviles, New York-based CEO of the United Clergy Task Force. “This is a way to get out of this mess with garbage.”

Puerto Rico generates 1,420 pounds of garbage per person annually which amounts to 40,000 tons of waste to fill 32 open landfills, most of which are not in compliance with Environmental Protection Agency standards, according to Columbia University’s School of International and Public Affairs.

Municipalities spend about $500,000 a year to collect and dispose of their waste.

“We could process that waste, produce electricity and sell it to the grid. The municipalities then get money from local grid operators. They can also dispose of remaining waste as organic fertilizer,” said Deepak Gadhia, CEO of Gadhia Solar, who will conduct the feasibility studies.

landfill gas energy, how to landfill gas, landfill gas power plant generate the electricityGetty

The studies will determine: how much waste is generated, how much energy can be produced, how much biogas would be used for cooking versus electricity production, how much fertilizer could be produced, the cost to generate electricity with the biogas, the cost to reserve land for the biogas production, whether the biogas system could be combined with solar photovoltaic systems, and how much manpower the biogas system would require.

Gadhia invented and now manufacturers solar cooking systems, which he donated to recovery efforts in Puerto Rico.

“The goal is to help the country, the people and the world. We are solving the problem of waste, energy, reducing carbon in the atmosphere and creating employment,” Gadhia said.

The unlikely blend of organizers are faith-based leaders, financial gurus, scientists, and entrepreneurs; most are all of the above.

The efforts have been self-funded over the past year, but the group has just teamed up with The Energy Resource Institute, which won the Nobel Peace Prize in 2007 with Al Gore, to help raise $100,000 for the feasibility studies.

“If the numbers work out, we’d like to prepare a report for investors, for the impact investing community to make a case,” said Hemant Wadhwani, one of the group’s leaders and founder of Hanuman Capital.

“We’ve been invited by Prudential to send a grant proposal if the feasibility studies prove positive,” he said. “If Puerto Rico can build a biogas plant, then we’ll facilitate relationships with the impact investors.”

Patrick Serfass, executive director of the American Biogas Council said, “If there’s more than 10,000 tons [of waste] a year in a concentrated area within a 20-mile-diameter circle, then biogas systems commercial size are going to make a lot of sense.”

“If you have a biogas system, you’ll process that organic material and turn it into valuable products–

gas, liquid and solids. Gas is where all your energy is, and with a little processing it becomes equivalent to conventional natural gas and you can use it for electricity, vehicle fuel, heating.”

According to the Energy Department’s Energy Information Administration, petroleum supplies just under half of the island’s electricity, and natural gas nearly one-third. Coal supplies about one-sixth of electricity, while renewables supplied about 2.4%.

“When you process biogas, it’s exactly like natural gas, and we call that renewable natural gas,” Serfass said.

Presumably, biogas could be used by natural gas plants run by Puerto Rico Electric Power Authority.

The Vision Is Clear. So Are The Hurdles

Serfass says, “The trick is, can this bring in enough revenue to justify the cost of the system?”

A team could collect waste from restaurants, grocery stores, stadiums and other businesses currently paying to have someone to haul that waste to landfills. But to finance the biogas plants, banks are interested in seeing long-term feedstock agreements.

The U.S. biogas industry grew about 29% in the past year.

If there is enough trash to convert to biogas long term, the project still needs investors, and organizations to build the plants.

The smallest biogas systems can cost $1 million-$2 million. It would process the equivalent of manure from 500 cows.

The largest biogas system in the U.S. is in Washington, a $450 million project, which is also one of the largest in the world. It can handle more than 400 million gallons a day of wastewater. The mainland U.S. has 2,200 biogas plants. Puerto Rico has one.

The projects also need power purchase agreements with the hobbling PREPA, and transportation infrastructure.

Currently, there is no pipeline infrastructure to transport gas to load centers.

Puerto Rico has two natural gas power plants on the southern coast of the island. Both are supplied by LNG sourced from various countries, including Trinidad and Tobago. Plants on the northern coast, which includes the San Juan municipality, run on diesel and fuel oil.

All energy sources, except for renewable sources—wind and solar—are imported.

It Wasn’t All Biogas And Fertilizer

Wadhwani and others initially went down to Puerto Rico to help with Hurricane Maria relief efforts. He helped organize Power Light a Home, the effort to distribute thousands of solar lanterns to households that lost power for months.

When he saw citizens suffering without clean water to live and eat, he enlisted Gadhia who joined the team and donated 10 large solar cookers for community centers throughout the municipalities. Suddenly communities that had no warm food, electricity or clean water did.

Aviles joined Wadhwani, and the motley crew grew.

“I saw a 102-year-old man with his face on the floor because he didn’t have light or electricity,” Aviles said. “It’s insane to see what I saw and not do something about it.”

Aviles, a commercial banker in New York, then enlisted celebrity chef Grace Ramirez from the Food Network to the recovery effort.

“She woke up at 4 a.m. to cook 400-500 meals for people in remote areas [with Gadhia’s solar cookers],” Aviles said. “It was just that type of situation; it just grabs you.”

Pranav Gadhia is part of Gadhia Solar. His team installs and trains citizens to use the solar cooking systems.Pranav Gadhia

Each of the community organizers has helped bankroll the effort. Aviles has spent more than $100,000 of his own money. He has housed the organizers in an apartment in San Juan.

Aviles reached out to leaders in about two dozen municipalities and more than a dozen of their mayors. “I said we’re bringing water, food and solar lights,” he said. “We would go to the plaza in each town and stay there with the truck. We also walked from house to house.”

Aviles and the crew enlisted local churches in Puerto Rico to distribute nearly 7,500 solar lanterns to each person in each house.

“How much did this cost? I couldn’t even guess,” Aviles said.

Aviles’ work goes beyond his contributions of time and energy and money into Puerto Rico.

Several years ago, he conducted did financial literacy classes for churches in New York. Because of his financial background, he also helped negotiate deals for churches so they weren’t taken advantage in the cutthroat New York commercial real estate market.

“I was making money at that point in my life and basically I wanted to give back.”

The Messenger Matters

The biogas project is one of many that landed on the doorstep of Puerto Rican officials after Hurricane Maria. The idea of turning Puerto Rico’s waste into energy is not a new concept.

A 2007 report by Columbia University’s School of International and Public Affairs, Waste-to-Energy: A Possibility for Puerto Rico, said a project to convert waste to energy could be lucrative to any investor.

The annual revenue of a waste-to-energy plant is projected to be $71 million, while the annual operations and maintenance costs are projected to be $30 million, resulting in an annual net gain of $41 million, the report said.

After Hurricane Maria, Energy Answers International, Inc. proposed an $860 million, 80 MW waste-to-energy facility in Arecibo on the northern coast of Puerto Rico. After months of wrangling with authorities the regional EPA representative said the company was exploiting the losses from Hurricane Maria.

Three other projects were proposed to help Puerto Rico strengthen its dilapidated power grid—a wind farm, an energy storage project and an energy efficiency project.

A U.S. energy developer who spoke on the condition of anonymity said building a biogas plant or two could make sense but selling that power to a bankrupt PREPA could be difficult.

“Challenge is even if you can get your waste supply, it’s economics. In the eyes of Puerto Rico, the power price has to be 15 cents per kilowatt hour or below,” he said. “Right now, the cost on some of these power projects is higher than that.”

PREPA controls all grid-scale plants. Even if PREPA doesn’t allow biogas into the mix, there are industrials that could possibly buy the biogas, he said.

PREPA largely runs on imported fossil fuels, and most of its gas comes into its LNG terminal in the southern part of the island from Naturgy, Spain’s largest gas and biogas producer.

Wadhwani says there were certainly opportunistic proposals, but his is different.

“Mayors said plenty of energy companies came to their doorstep trying to sell them ideas, but they didn’t know who to trust,” Wadhwani said. “Everyone knocked down their door, but we were the only ones giving, and we’re funding the feasibility study for them.”

“We’re not asking them for any money,” Wadhwani said. “We’re not building infrastructure. We’re creating a report. Showing them the way.”

Build It And They Will Come Back

 The effort has caught the attention of celebrated economist Richard B. Freeman, a Harvard University economics professor who leads a program at the National Bureau of Economic Research on workforce, and how science can help solve economic problems.

“After the Puerto Rico disaster, it seemed to me somebody should be trying to transform the way their power system operates. This is a movement in that direction,” Freeman said.

The Swedes and the South Africans “have done a lot of things with biogas.”

“There’s a reasonable possibility that this would succeed. You have to get it up to scale,” Freeman said. “The alternative is pretty grim.”

Storms and economic struggles have sparked an exodus from the island.

DOE’s EIA says the commonwealth’s population has declined by one-tenth, or nearly 400,000 people, since 2010, which could go 200,000 higher thanks to Hurricane Maria in 2017.

Aviles says the goal is to build the new economic engine of Puerto Rico.


December 21, 2018 at 08:13PM
Forbes – Entrepreneurs