A. Introduction

In relation to the previously published topic "The truth about incentives to renewable energies", I have received several questions, including the following:

Is any action planned to improve the current situation, facilitate investments and attract investors? 

So that we can understand the answer to the previous question, I will show some basic aspects of the incentives to renewable energies and then I will give the answer to the question.

B. Normative aspects, incentives, renewable sources. 

In 2007 the Dominican Republic issued Law No. 57-07, about Incentives for the Development of Renewable Sources of Energy, which contains incentives for the installation and operation of projects based on renewable sources of energy and its Article 3 specifies the following objectives.

c. Stimulate private investment projects, developed from renewable sources of energy; 

• In this document, we will analyze the latest actions of the Dominican state with a view to stimulating private investment, at the end the reader will have a more complete idea of our reality and reach their own conclusions.

F. Promote community social investment in renewable energy projects; 

• The results of this objective of the Law are practically null, the same Law ordered the creation of a regulation that allows the development of community projects, "Cooperatives of Renewable Energies", however, this regulation has not been issued and its absence constitutes a barrier to the development of community social projects. 

Article 21 specifies the following: 

Article 21.- All the authorities of the electric subsector shall ensure that 25% of the service needs for the year 2025, are supplied from renewable energy sources. ... 

• As we can see, this law clearly demarcates its objectives in terms of promoting investments and clean energy production goals. 

Note. Although there are other important regulations that create the bases for the development of renewable energies, at this moment we are only going to refer to Law No. 57-07.

C. Latest actions of the Dominican Republic related to renewable energies.

1. Issuance of the Regulation that establishes the procedure for processing applications for provisional concessions. (January 2019). 

• This regulation, more than helping the development of new projects, complicates it, since it introduces in the provisional concession, requirements that only have sense to be demanded during the last definitive concession processes. 

The objective of the provisional concessions is to allowance to a certain company the rights to carry out the studies required by the project, technical, environmental and economic studies. 

At the conclusion of the studies, the promoters will be able to determine the feasibility of the project, and if it is feasible, the promoters will strengthen the company, look for the investors and present them during the final concession process, this is logical and is as it should be and it is contained in the Regulations of Law No. 57-07. 

2. Concise report on the renewable energy development plan in the SENI. (December 2018). 

• There are many things that have been said and can be said in relation to this report, possibly we will analyze them in another document, but at the end what we can see is that the report aims to limit for the period 2018-2020 the growth of renewable energies not manageable to only 250 MW in some proposed polygons and that the contracting of the projects will be the result of a bidding process. 

The above sends signals of doubts and skepticism to investors and more when the same document expresses the following. 

"It is necessary to find a mechanism for simultaneous management of the opening of concessions and renewable energy tenders." 

3. Limitation of aggregate self-production capacity in trunk circuits. 

The Distributed Generation Regulation, in its Article No. 17, establishes the following: 

"a. The Aggregate Capacity of all Renewable Generation Systems connected in the same Trunk Network, including the proposed Generation System, shall not exceed fifteen percent (15%) of the annual Peak Demand of said Trunk Network. This Peak Demand will be determined at the output of the feeder in the substation and will correspond to the maximum demand registered in the feeder during the 12 months prior to the date in which the Evaluation Request is received. The percentage of Aggregate Capacity mentioned in this literal may be modified by prior agreement between the Clients and the Distributing Companies, as long as this agreement is technically supported. " 

• While it is true that this provision has been in the Distributed Generation Regulation since it was issued, no less true is that this provision is currently being used by the Distributing Companies in an arbitrary manner and as a weapon to prevent the development of self-production projects that use net metering. 

Note. There are other state actions that are unfavorable for the development of private investments in renewable energy projects; they will be addressed in other documents. 

D. The discourse of the authorities in relation to Renewable Energies. 

In relation to renewable energies, the discourse of the state is having two directions. 

a. What they have done the latest news issued by the official bodies regarding renewable energies point to a large growth in installed capacity, and it is true, we have grown, but this truth is marred by the following reasons.

1. It is evident that the Dominican state was forced to deliver the PPAs of the projects that had long obtained their definitive concession contract and in this way; the knot that impeded the development of renewable energy projects was unleashed.
2. Lately we have grown because before we almost did not have any renewable energy, so that: any increase in capacity significantly influences the percentage of growth.
3. Although it is true that we have grown, no less true is that: this growth is lower than we should have, to achieve that by 2025, 25% of energy demand is covered with renewable energy.

b. The issue of the penetration of non-manageable renewable energies. Although it is true that unmanageable renewable energies create disturbances in electrical systems and this is a reality all over the world, it is also true that renewable energies have many positive economic and environmental aspects and, for these reasons, these projects must be supported and encouraged, this is what Law 57-07 contemplates, then the state instead of shielding itself from penetration, which must create the conditions so that renewable energy can be installed in the national grid.

E. Conclusion of latest provisions / Promotion of Renewable Energies. 

When we talk about promotion to Renewable Energies, we think of a set of informative actions, regulations, processes, etc., that result in creating facilities for the development of new projects, and definitely the latest provisions related to Renewable Energies, more that promoting and providing facilities are establishing limits and barriers. 

At the end what we can see is that the Dominican state maintains a double focus towards the development of renewable energy projects, on the one hand, it says to encourage, and on the other hand it establishes barriers that hinder the development of smaller and large-scale projects. 

F. What should the Dominican Republic do to ensure that, by the year 2025, 25% of the energy demand is covered by clean energy? 

The Dominican Republic must make a concrete plan that covers all the capacity that will be necessary to install to meet the required goal, said plan must have the technologies, capabilities, installation start times and entry times into operation, under this premise, the developers will be responsible for preparing the projects and at their risk they should be competitive.

The state must once and for all, choose the mechanism under which it hires renewable energies, whether through PPA or through competitive bidding processes, both methods are good if they are applied in an appropriate way, which cannot be possible due to pre-investment risk issues: obtain a long and expensive concession, then go to tender. 

To learn about energy policies and regulatory issues related to renewable energy in the Dominican Republic please visit our website: http://www.iec.com.do/, or send us an email to the following address: Esta dirección de correo electrónico está siendo protegida contra los robots de spam. Necesita tener JavaScript habilitado para poder verlo.

Francisco Ortega,
Manager IEC, May 2019

Francisco Ortega / May 2019 

A. Introduction. 

Next, we are going to present the evolution of the different technologies that in the Dominican Republic compose renewable energies and with this information, we will try to sense where we are, where we should be and what we should do. 

A.Introducción.

A continuación, vamos a presentar la evolución de las diferentes tecnologías que en la República Dominicana componen las energías renovables y con estas informaciones trataremos de intuir donde estamos, a donde debemos llegar y que debemos hacer.

En relación al tema publicado previamente “La verdad sobre los incentivos a las energías renovables”, he recibido varias interrogantes, entre ella la siguiente interrogante: 

¿Se prevé alguna acción para mejorar la situación actual, facilitar las inversiones y atraer inversores?

Para que podamos comprender la respuesta a la anterior pregunta, mostraré algunos aspectos básicos de los incentivos a las energías renovables y luego daré la respuesta a la pregunta.  

In the following article, we intend to answer the question: Are there incentives to attract investments in the area of ​​renewable energies in the Dominican Republic?

The Law on Incentives to the Development of Renewable Sources of Energies No. 57-07, contains important incentives for the installation and operation of renewable energy projects, we could say that very good incentives, so much so that, when investors and regulators from other countries know about our regulation of incentives to the renewable energies they say that they are very good and very advanced.

However, Law No. 57-07 was published twelve years ago and only in recent years, we have seen projects developed through this law, but in order to not get out of our topic, we will give details about this later.

When we talk about incentives of any kind we must think about a transversal system that allows us to fulfill the objectives for which this incentives are granted, the transversality must encompass all the involved institutions with access to the incentives, the productive processes and in each of the stages of the project, from the moment it is conceived, all its useful life, until its dismantling, all this under the mantle of a legal security that guarantees the transparency of the processes over time.

Regarding this, what can we say about the Dominican Republic?, the truth is we still have a lot to do, on paper we have good incentives but access to them is difficult, the institutions in charge fail to agree in anything, and both the time and the procedures become barriers to these incentives.

On the other hand, we must think about the supreme incentive, the incentive that gives or makes sense to the feasibility of an energy project, we are talking about the purchase price of energy, which is obtained using a PPA, and in the Dominican Republic obtaining a PPA is  not an easy task. (We’ll talk about this later).

So, the answer to the question, In the Dominican Republic do we have any incentives to attract investments in the area of renewable energies? The answer is: On paper, Law No. 57-07, we have incentives for the development of renewable energies, but the system for accessing them is difficult,, we need transparency, legal guarantees and less discretion.

Francisco Ortega, IEC Manager

May 2019

If we think about the energy future of the Dominican Republic, what can we think? What questions can we ask?

What will be future of the energy matrix of the Dominican Republic?

Which of the generation technologies that today participate in the Dominican electricity market, due to their high costs, will come out of the market?

Will the Dominican Republic have an energy matrix adapted to the new times?

Will renewable energy participate in the energy generation cake as required by the regulations in force in our country?

Will the generation of electricity with biomass be able to open its space in the Dominican energy matrix?

Will the Dominican Republic adapt to the environmental and sustainability requirements that everyday are becoming more and more demanding worldwide?

The answers to each of the previous questions are related to a topical question;

Are the energy authorities of the Dominican Republic planning and implementing an action plan that encourages the entry and operation of clean, non-polluting, environmentally friendly energies?

Is the Dominican Republic promoting the consumption of efficient energy, so that consumers are motivated to reduce their carbon footprint?

If the answers to the previous questions are not positive, that is to say, that the Dominican Republic is not adequately planning its energy future, then we have to ask ourselves the following questions.

What are we doing to demand or build the energy future we want for our children?

To find the answers to these important questions or to know other related topics, please visit our website:
http://www.iec.com.do/

Francisco Ortega
IEC Manager