This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 11/19/2018
This is a best prospect industry sector for this country. Includes a market overview and trade data.

Overview

The electric power generation and distribution sector is perhaps the most challenged part of the Dominican Republic’s economy. The country continues experiencing frequent electrical outages that can last from several minutes to several hours nevertheless, the DR is poised for an energy transformation.  Proposed electric sector reform known as the Electric Pact (Pacto Eléctrico) is intended to increase the nation’s competitiveness and improve Dominicans’ standard of living.  The Electric Pact that should have been approved at in December 2017 by the DR President, so far has not been approved yet.
The DR’s installed generation capacity is over 3,000 MW and the average daily peak demand is around 1,900 MW, thus the supply shortfalls and blackouts appear to be due to systemic problems rather than a lack of generation capacity. Technical and non-technical losses average 30 to 35 percent. The historically high costs of fossil fuel imports have made the development of renewable energy projects a priority for the government.

The DR government’s efforts to encourage clean and renewable energy generation includes generous tax incentives for investors in the sector but, stop short of commitments to purchase the electricity produced. While the new fiscal reforms plan to reduce these incentives somewhat, the medium- to long-term prospects for renewable energy products and services are promising.
 
Legal Framework for Renewable Energy
There are several laws that comprise the legal framework for the renewable energy projects in the Dominican Republic. These include the following: 
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.  Besides using Net Metering system customers can reduce their monthly bills.
 

Opportunities

The Renewable Energy Incentives Law (57-07) provides a number of incentives to businesses developing renewable energy technologies. This law was passed as part of the Dominican government’s efforts to invigorate local energy generation from renewable sources, as well as to promote production of high-value renewable energy products. The incentives include 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. 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. 

The Dominican Corporation of State Electric Companies (CDEEE) announced the start of eight energy generation projects from renewable sources.  These projects will provide 361.2 MW of new generation capacity to the national grid. The eight projects are supported by private investments for a total of US$780 million.
The current Executive Vice President of CDEEE, Rubén Jiménez Bichara advises that these projects, in the short term will increase the availability of clean energy in the Interconnected National Electricity System (SENI) to 556.21 megawatts.  He also assures that the DR Government is committed to supporting projects for energy generation based on non-petroleum-based fuels, such as wind, sun, water and other renewable sources.

In a recent meeting, the Minister of Energy and Mines, the Executive Director of the National Energy Commission and the Executive Vice President of the Dominican Corporation of States Electric Companies made the decision of granting the concessions for renewable energy generation projects through tenders, leaving behind the “sole source” method of energy purchase contracts (PPAs).

Principal Renewable Energy Projects in the Dominican Republic:
  • Eolic Park Los Cocos – Quivio Cabrera: installed capacity of 77 MW
  • Larimar Eolic Park: installed capacity of 49.5 MW.
  • Monte Plata Solar (First phase): installed capacity of 30 MW 
  • Montecristi Solar Farm:  installed capacity of 58 MW
  • Canoa Solar park (under construction): will have a capacity of 25 megawatts in its first phase
  • San Pedro Bio Energy Power plant: installed capacity of 30 MW

Web Resources

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Dominican Republic Energy Trade Development and Promotion