Puerto Rico’s perpetually problematic power grid has an appointment for a major facelift, thanks to receiving a critical permit that greenlights billions of dollars in private investment.
Caribbean Transmission Development Company (CTDC) has received a Presidential Permit from the U.S. Department of Energy (DOE) for Project Hostos, a transformative 500-megawatt (MW) high-voltage direct current (HVDC) submarine interconnection cable that will deliver firm, dispatchable power from the Dominican Republic to Puerto Rico beginning in 2031.
The Presidential Permit, required for all cross-border energy transmission facilities under Executive Order 10485, represents critical federal validation and opens the path for significant private capital deployment for Caribbean energy infrastructure. The permit authorizes CTDC to construct, operate, and maintain transmission facilities crossing the international maritime boundary in the Mona Passage, ing a comprehensive interagency review process coordinated by the DOE.
The Hostos with the Most-os?
Project Hostos is structured as a 100% privately financed initiative. The total project cost of $2.5 billion is allocated across key components:
- A 500 MW combined-cycle power plant
- 90 km of overhead 345kv AC transmission line
- 150 km of subsea 320kv HVDC transmission line
- 6 km cable stretching from the port of Mayagüez in western Puerto Rico, underground, rising to interconnect with the electric grid at the Mayagüez Substation
- AC-to-DC converter stations
The project centers on a state-of-the-art 500 MW combined-cycle power plant to be constructed in San Pedro de Macorís, Dominican Republic, utilizing the latest gas and steam turbine technology. The facility will transmit power through three cable segments.
“This is the first major milestone that we have achieved. Meanwhile, we continue to advance on other milestones for the rapid execution of the Project,” reflected Tirso Selman, project director. “Our development timeline and cost structure benefit significantly from building in the Dominican Republic, where permitting processes are more streamlined, and construction costs are 25-30% lower than comparable Puerto Rico-based projects.”
The advanced combined-cycle technology provides approximately double the efficiency of Puerto Rico’s aging steam units. This translates to annual operational savings of up to $300 million and a reduction of 3.8 million tons of CO2 annually compared to current generation sources. The plant’s fast-ramping capability provides the flexibility to balance renewable intermittency while mitigating curtailment of clean energy.
The project will create more than 1,500 construction jobs and generate over $150 million in economic impact during the build phase. Once operational, Project Hostos will provide reliable power to the equivalent of more than 600,000 Puerto Rican homes while establishing the foundation for expanded Caribbean energy cooperation.
“Atabey Capital’s early commitment to Project Hostos reflects our conviction that private capital must lead Puerto Rico’s energy transformation,” said Rafael Vélez, founder and president of Atabey Capital, the Puerto Rico-based investment firm that serves as CTDC’s founding investor and principal partner.
“As a Puerto Rican company, we understood that our island’s energy crisis requires bold, market-driven solutions that don’t depend on scarce federal funding or the constraints of public-sector development. Our initial investment enabled the feasibility study and conceptual design, among other studies that were performed. We acknowledge the compelling fundamentals for the project: essential infrastructure, proven technology, and a regulatory framework that supports private development. This Presidential Permit validates the work performed to date and allows us to work on the next phases that will bring this project to commercial operation.”
A Reliable Energy Future?
Puerto Rico’s grid has attracted the wrong sort of headlines for a long time. Hurricane Maria wiped out 80% of the island’s transmission and distribution lines in 2017, leading to months-long power outages. Just five years later, Hurricane Fiona took down poles and wires to a similar effect, and since then, widespread blackouts have become part of life in Puerto Rico. Last month, international pop star Bad Bunny made the island’s unreliable electric system a focal point of his Super Bowl LIX halftime show.
Despite an apparent need for investment, the Trump administration appointees at the Department of Energy have canceled at least $815 million of a $1-billion fund meant to bolster the island’s grid against storms and outages. In January, DOE canceled three programs, including one worth $400 million, that would have added solar and battery storage systems in low-income homes and those with medical needs. The department said it would reallocate up to $350 million from private distributed solar systems to improve power generation in Puerto Rico. One of those programs would have financed solar projects for 150 low-income households on the tiny Puerto Rican island of Culebra.
For Puerto Rico, the Hostos project addresses the critical vulnerabilities exposed by recent hurricanes while positioning the island to retire inefficient legacy energy generation. The geographic diversification inherent in the cross-border design provides unprecedented resilience. For example, when storms threaten Puerto Rico, power continues flowing from the Dominican facility. If the Dominican Republic faces challenges, the interconnection cable is bi-directional, capable of providing power back to the Dominican Republic. In addition, the continuous liquefied natural gas (LNG) supply to the Dominican plant eliminates the vessel swap interruptions that periodically disrupt Puerto Rico’s current floating storage units, another critical resilience consideration.
“Project Hostos will provide the firm, flexible, and dispatchable baseload capacity Puerto Rico desperately needs to replace aging thermal plants, reduce blackouts, and enable the integration of more renewable energy,” Vélez predicted. “By connecting the two islands through proven subsea cable technology used successfully across North America, Europe, and Asia, we’re not just building energy infrastructure; we’re building resilience, reliability, and a bridge to Puerto Rico’s clean energy future.”
Key Partnerships
CTDC is currently engaged in a strategic partnership with Siemens Energy, which will supply the 500 MW combined cycle power plant and both AC-to-DC converter stations in the Dominican Republic and Puerto Rico.
Working with international engineering firm Jacobs, CTDC has kept environmental stewardship central to the project’s design, optimizing the cable routing through various comprehensive marine and environmental surveys and horizontal directional drilling for nearshore installation, key matters for the U.S. Presidential Permit.
“The Hostos name itself—honoring the 19th-century philosopher Eugenio María de Hostos, who championed Caribbean confederation and d prosperity—reflects our vision for this project,” said Antonio Almonte, Minister of Energy and Mines of the Dominican Republic. “This Presidential Permit allows an interconnection that will transform the Caribbean energy landscape by demonstrating that our islands are stronger together. As we advance toward regional integration, Project Hostos establishes the technical and commercial framework for a true Caribbean energy market, where resources, expertise, and infrastructure serve the prosperity of all our peoples.”
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Renewableenergyworld.com
