This is a best prospect industry sector for this country. Includes a market overview and trade data.
The electric power sector continues to be one of the largest problems affecting the Dominican economy. Although the DR Continues to experience electrical outages that can last from several minutes to several hours, there are signs that the DR is poised for an energy transformation. The electric sector reform, known as the Electricity Pact (Pacto Eléctrico), was finally signed and approved in February 2021. This initiative is intended to increase the nation’s competitiveness and improve the standard of living across the DR.
The signing of the Electricity Pact highlights the government’s commitment to reducing losses in the distribution network and promoting the financial reliability of energy distributors. President Luis Abinader has also encouraged investments in natural gas and renewable energy, consolidating an existing trend towards diversification of the energy matrix.
The DR’s installed generation capacity connected to the National Interconnected Electric System (Sistema Eléctrico Nacional Interconectado - SENI) is over 4,800 MW and the average peak demand is around 2,700 MW. The supply shortfalls and occasional blackouts thus appear to be due to systemic problems rather than a lack of generation capacity. Technical and non-technical losses average 28 to 30 percent, although some companies, especially in the eastern provinces, experience losses that surpass 50 percent.
The historically high costs of fossil fuel imports have made the development of renewable energy projects a priority for the government and the DR has committed to reducing its greenhouse gas emissions by one-third by 2030 compared with existing levels in 2010.
The Dominican Republic passed legislation on renewable energy in 2007 as part of its endeavors to achieve these targets. The main objective of this law is to increase the contribution of renewable energy sources in electricity generation to 25 percent by 2025. The DR government’s efforts to encourage clean and renewable energy generation include generous tax incentives for investors.
Legal Framework for Renewable Energy
Several laws comprise the legal framework for renewable energy projects in the Dominican Republic. These include the following:
- General Electricity Law 125-01
- Renewable Energy Incentives Law 57-07
- General Law on Environment and Resources Law 64-00
- Net Metering legislation
In July 2011, net metering legislation was developed for residential wind or solar installations smaller than 25 kW and commercial facilities under 1 MW, making them eligible to receive credits for excess power exported to the grid. Under this program, a significant number of customers have connected renewable sources to the grid.
The Renewable Energy Incentives Law (57-07) grants several incentives to businesses developing renewable energy technologies. This law was passed in 2007 as part of the Dominican government’s efforts to invigorate local energy generation from renewable sources, as well as to promote the production of high-value renewable energy products. The incentives included a 100 percent tariff exemption on imported inputs (equipment and materials) and a 10-year exemption from all taxation on profits up to, but not beyond, the year 2020, but in fact, those exemptions are still in effect. In 2012, the law was modified as part of President Medina’s fiscal reform measures, reducing the tax incentive for small-scale, self-producers of renewable energy and eliminating the 10-year tax exemption on profits derived from the sale of electricity generated from renewable sources.
President Luis Abinader, who took office in August 2020, advocates for the implementation of a gradual shift to diversify the energy matrix with cleaner technologies and has set a target for renewables to account for at least 25% of power generation by 2030. To help reach this target, the administration has said it plans to restore the level of fiscal credit for investments in renewable energy systems to 75% as established in renewable energy incentives law 57-07 since a modification during the previous administration reduced the amount to 40%. President Abinader also stated that the government energy authorities plan to launch a tender to incorporate more renewables into the energy system to increase the availability of clean energy in the SENI.
There has already been significant investment in the renewable energy space locally due to recent efforts by the Dominican government, and it is expected that there will be increased investment in renewable energy as many of the governments clean energy initiatives begin to take further effect.
Principal Renewable Energy Projects in the Dominican Republic
- Eolic Park Los Cocos – Quilvio Cabrera: installed capacity of 77 MW
- Larimar Eolic Park: installed capacity of 49.5 MW.
- Guanillo Eolic Park (PECASA): installed capacity of 50 MW
- Agua Clara Eolic Park (under construction): installed capacity of 50 MW
- Matafongo Eolic Park: installed capacity of 50 MW
- Guzmancito Eolic Park: installed capacity of 50 MW
- Monte Plata Solar (First phase): installed capacity of 30 MW
- Montecristi Solar Farm: installed capacity of 57.96 MW
- Canoa Solar park (under construction): will have a capacity of 25 megawatts in its first phase
- Washington Capital Solar Park (WCG ): installed capacity of 50 MW
- AES Bayasol: Installed capacity: 50 MW
- Santanasol Solar Park: Installed capacity: 50 MW (concession approved)
- Girasol Solar Park: Installed capacity: 120 MW
- San Pedro Bio-Energy Power plant: installed capacity of 30 MW
- Yira Roa, Commercial Specialist: email@example.com
- Comision Nacional de Energía: (CNE)
- Ministry of Energy and Mines: (MEM)
- Superintendence of Electricity (SIE)