Cogeneration Gains Momentum as Businesses Seek Energy Reliability and Lower Costs

As Puerto Rico’s industrial sector continues to grapple with high electricity costs and grid instability, businesses are increasingly exploring alternative energy solutions to strengthen operational resilience and remain competitive.

That shift took center stage during AB’s Cogeneration Day Puerto Rico, where industry leaders examined the role of combined heat and power (CHP) systems in addressing the island’s energy challenges, from fuel availability and financing to operational efficiency and long-term maintenance.

Cogeneration technology allows facilities to generate electricity while capturing heat that would otherwise be wasted and repurposing it for industrial processes. By producing electricity and useful thermal energy from a single fuel source, CHP systems can improve overall energy efficiency and potentially reduce operating expenses.

Giuseppe Fiorella, sales director at AB, emphasized that reliable electricity has become essential to business continuity, particularly for manufacturers whose operations depend on uninterrupted power.

The Italian energy technology company, which established operations in Puerto Rico in 2020, highlighted its growing presence on the island and throughout the Caribbean, where demand for on-site energy generation continues to increase.

LNG widens fuel options

The first panel, “Delivering Integrated Energy Solutions: From Fuel Supply to Financing,” featured José Maeso of Crowley, Jimmy Woodford of Puerto Rico Island Power (PRIP), Jesús Solano of AB Energy and engineer Roberto Acosta of Accurate Solutions.

Maeso discussed Crowley’s efforts to expand liquefied natural gas (LNG) infrastructure across Puerto Rico and the Caribbean, including plans for a second LNG vessel, additional ISO container loading capacity and a potential floating storage unit.

These developments could improve fuel accessibility for businesses considering on-site generation, particularly facilities without access to conventional natural gas pipelines.

However, Maeso emphasized that LNG’s economic benefits depend on more than fuel prices, with transportation, equipment conversion, maintenance and generation efficiency influencing the overall investment.

Woodford addressed one of the principal barriers to adopting cogeneration: the upfront capital required to develop an energy project.

Through power purchase agreements (PPAs), companies can obtain on-site generation without necessarily financing the initial installation themselves. Under these arrangements, a third-party developer typically assumes responsibility for the investment while the customer purchases electricity under a long-term contract.

The model allows manufacturers to preserve capital for expanding production, acquiring equipment or developing new business opportunities.

Local support and true resilience

Solano highlighted AB’s growing project portfolio in Puerto Rico, noting that the company has established a local technical team and spare-parts warehouse in Ponce to support its installations.

He identified aging generation infrastructure, grid reliability concerns and fuel-price volatility as key factors accelerating demand for cogeneration and hybrid energy systems across the Caribbean.

Meanwhile, Acosta emphasized the importance of distinguishing conventional on-site generation from microgrids, which require coordinated electrical systems capable of disconnecting from the main grid and operating independently.

He stressed that resilience involves not only restoring power after an outage but also maintaining the continuous operation of critical facilities, including hospitals and pharmaceutical manufacturers.

The Pan Pepín decision

The second panel, “Why Companies Choose Cogeneration: Drivers, Benefits and AB as Partner Selection,” presented practical applications of the technology through projects involving Pan Pepín, Dorado Beach and Island Renewable Energy.

Jonathan Ramírez, engineering director at Pan Pepín, explained that the bakery company began evaluating alternative energy solutions after facing rising electricity expenses, recurring outages and the challenge of utilizing heat generated during production.

The company considered solar photovoltaic systems, battery storage and hybrid microgrids before selecting a gas-powered CHP solution designed to generate electricity while recovering heat for industrial processes.

Ramírez emphasized that cogeneration should be approached as a long-term business decision rather than simply an equipment purchase, with expected benefits including fewer production interruptions, greater efficiency and lower operating costs.

An energy project at Dorado Beach

The panel also examined an energy infrastructure project under development at Dorado Beach.

Engineers Eduardo Cortés and Dámaso Bermúdez of Puerto Rico Energy Partners discussed the installation, which is intended to improve electricity quality and reliability across resort facilities.

The project, financed through private and institutional capital, including FirstBank, is designed to use LNG as its primary fuel, with propane available as an alternative.

Beyond conventional natural gas, Dave Moniot of Island Renewable Energy discussed the potential of renewable natural gas (RNG), also known as biomethane, as a locally produced alternative.

The company is developing projects that capture methane from landfills and process it into fuel suitable for energy generation.

Moniot identified projects in Humacao and Ponce with stated annual production capacities of 450,000 and 380,000 MMBtu (million British thermal units), respectively.

Unlike imported fossil fuels, landfill-derived RNG can be produced locally, potentially strengthening energy security while capturing methane generated by decomposing waste.

Moniot also explained how cogeneration can support the RNG production process by supplying electricity and recovering heat for plant operations.

Protecting the investment

The final panel, “Service Excellence and Energy Resilience: Protecting the CHP Investment,” focused on the importance of maintenance, technical expertise and after-sales support in sustaining the performance of cogeneration systems.

Richard Sánchez of Petro-Canada Lubricants, part of HF Sinclair, discussed the role of specialized lubricants, oil analysis and preventive maintenance in protecting industrial engines from wear and unexpected failures.

For businesses relying on continuous on-site generation, equipment performance directly affects operating costs and production reliability.

Fiorella highlighted AB’s investment in technical support, including approximately $64 million in spare-parts inventory, around-the-clock monitoring capabilities and plans to expand technician training through its Houston operations.

He emphasized that reliable service requires local personnel capable of responding quickly to operational issues, particularly in markets such as Puerto Rico, where electricity interruptions can have significant economic consequences.

Across the three panels, participants underscored that cogeneration’s potential extends beyond reducing electricity bills.

For energy-intensive businesses, the technology represents an opportunity to improve operational continuity, strengthen competitiveness and reduce dependence on the traditional electrical grid.

However, its successful implementation depends on coordinated investments in fuel supply, financing, infrastructure and long-term maintenance, reinforcing the growing importance of comprehensive energy strategies for Puerto Rico’s industrial development.