Worldwatch created a roadmap for a clean energy future in the Dominican Republic. One year later, we look at how far the country has come—and where work remains.
Just over one year ago, the Worldwatch Institute launched its Sustainable Energy Roadmap for the Dominican Republic, the third and final such report in a multi-year project sponsored by the German Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB)
The report showcases practical reforms that the Dominican Republic can implement to harness renewable energy sources, reduce greenhouse gas emissions, and significantly draw down its reliance on imported fossil fuels. Given the country’s abundant natural resources, promising regulatory framework, and robust economy, Worldwatch projected that the Dominican Republic could achieve a target of 85 percent of its electricity coming from renewable sources by 2030.
Steps Forward for the Dominican Republic
When Worldwatch presented and launched the Roadmap at the new Ministry of Energy and Mines in July 2015, the Dominican Republic was taking big steps to change its energy profile. President Danilo Medina had just fulfilled a campaign promise to create the new energy ministry that consolidated the government’s various energy-related offices and initiatives.
In December 2015, the government made strong commitments to developing its Intended Nationally Determined Contribution (INDC) ahead of the Conference of the Parties in Paris (COP 21) to reduce long-term carbon emissions by almost 50 percent by 2030. These are exactly the strong policy signals that the Worldwatch Roadmap advocated for because of their ability to pave the way for would-be renewable energy developers and carbon emission initiatives.
The Los Cocos wind farm, owned and operated by EGE Haina, has also expanded from its initial 25 megawatts (MW) to 77 MW. In early 2016, the country launched the new 49 MW Larimar wind farm. After years of technical and financial difficulty, the long-awaited 30 MW Monte Plata solar farm finally came online in March with plans to expand to nearly twice the current capacity.
The country’s net metering law continues to be in full force, having added another 10 MW since the Roadmap was launched. It remains one of the most effective regulatory mechanisms in the region for promoting small- to mid-scale rooftop solar PV in the Caribbean.
Where Progress is Lagging
Some aspects of the Dominican Republic’s electricity landscape remain little changed. Fossil fuel imports are still around 85 percent, large hydropower production is still around 13 percent, and renewables still comprise only around 2 percent of the electricity mix. These values have remained largely unchanged for the last five years.
The country’s Law 57-07, meant to stimulate renewable energy investment, remains the subject of much debate. Brought fully into effect in 2008, the law established aggressive financial incentives to spur renewable energy growth, which the government began paring back in 2012. Since then, there has been vigorous deliberation about fully restoring the original incentives and allowing them to run their original course through 2020.
Electricity pricing could become more competitive due to the expiration of long-term electricity supply contracts between generators and the government. These contracts established a set amount of electricity that a generator would supply to government-owned distribution companies at a fixed price. Any shortfall that the generator needed to procure could be done on a spot market. The fuel type used to satisfy the contract did not matter, only the end commodity. This was beneficial to generators investing in large-scale renewable energy because they procured their commodity without a costly fuel input, thereby increasing profit margins. Thus, renewable energy was given “priority dispatch” status ahead of electricity generated from fossil fuels.
However, the Dominican Republic still relies on a pricing formula that fails to adequately connect the price of electricity to the price of the fuel source used to generate it. This mechanism can be beneficial when fossil fuel prices soar, but in markets where fossil fuels such as natural gas are at historic lows (or, in the case of renewables, where there is no costly fossil fuel), the full benefits of more affordable electricity are not fully realized by the consumer.
Further, the state-owned electricity company, CDEEE, remains outside the Ministry of Energy and Mines, which, as the Roadmap points out, makes coordination difficult and can lead to conflicting agendas.
Where the Dominican Republic Stands
In some ways, it appears that the Dominican Republic is actually taking a step backward and ignoring the Roadmap’s key findings and recommendations altogether. Construction continues on two 300 MW coal-fired power plants, which have been center stage for some time due to alleged mismanagement, non-transparency, and the devastating environmental and health impacts that they could bring to Dominican citizens. The Dominican government claims that electricity produced by these plants will result in lower electricity costs for consumers and fewer electricity outages, but it remains unclear if that will be the case.
All of this results in an uncertain market for renewable energy development in the Dominican Republic. The government seeks to ensure that baseload demand is met, which typically means relying on “dispatchable” sources such as natural gas or coal. However, these investments come with long life spans, sometimes as long as 30 years, which can crowd out renewable energy investment. Unfortunately, renewable intermittency remains too high a risk.
This is one key area where the Roadmap should continue to play a vital role in guiding the country’s energy transition. The Roadmaps shows how renewable energy, if matched with the proper technology, could help the Dominican Republic achieve very high percentages of renewable energy penetration. Natural gas forms a much better partner for renewable energy than coal or oil because of it can quickly be adjusted to compensate for intermittency.
The Dominican government only has to look to its Latin American neighbors to see the effectiveness of opening a pre-determined level of capacity in a competitive bidding process wherein developers compete to deliver that electricity at the most affordable price. The remaining capacity can be reserved for a complementary source, such as hydropower or natural gas, to ensure that baseload is adequately met.
The Roadmap offers not only the technical and socio-economic analysis of alternate energy pathways, but concrete finance and policy suggestions that can be crucial to helping the Dominican Republic continue its necessary transition away from heavy fossil fuel reliance. It also details the significant greenhouse gas emission reductions that can improve the local environment and the daily health of Dominican citizens, furthering the Dominican Republic’s position as a regional leader in addressing global climate change. All that remains is for Dominican leaders to boldly commit to such a path. So far, actions have been a mixed bag.
Last year, I participated in the annual Semana Dominicana in Washington, DC. When asked what I believe the future of renewable energy will be in the Dominican Republic, I told the group I think it could be a missed opportunity as the country struggles to truly commit to a renewable energy strategy.
The Dominican Republic’s size, location, and resources lend it to being a major installer of zero-emissions electricity generation, a distribution point for renewable energy technology in the Caribbean, and a leader in abandoning fossil fuel reliance.
Despite setbacks and questionable decisions, there is still time to make necessary corrections to achieve the goals outlined in Worldwatch’s Sustainable Energy Roadmap. Now more than ever, Dominican citizens—and indeed the world—need a strong example of leadership toward a cleaner, more affordable, and more sustainable energy future.