This blog post was originally published at Worldwatch Institute.
Last week Worldwatch’s Low-Carbon Roadmap program reached a significant milestone by hosting a workshop for relevant project stakeholders in the Dominican Republic. It was an opportunity to share interim results and gather feedback, input and answers from members of the country’s electricity sector. It was a successful event and the team now returns to Washington, D.C. to incorporate feedback and new findings into the next draft of the roadmap. Although the day’s discussion covered many areas, the three main takeaways involved the need for the government to follow through on regulations intended to foster renewable energy projects, strong long-term signals from the government regarding such projects and the urgent need for a financial sector that knows how to finance them.
As has been reported in a previous post, this project intends to help decision makers in target countries make informed decisions in the path to transitioning to a low-carbon economy. An important piece of achieving that goal is capacity building in the partner country. Worldwatch consults with in-country stakeholders before, during and after the project to ensure that priorities are understood, quality information is being put into the report and that the end users are able to effectively engage decision makers.
Coming into the workshop, project team members had many questions about the Dominican Republic’s electricity sector, particularly regarding the national electricity grid and its operations as well as the ability of the country’s financial sector to support and promote renewable energy projects. Participant feedback was largely helpful. The team received key information including the process by which electricity producers sell to local distributors, technical limitations of the country’s electricity grid and the types of challenges renewable energy projects, both large and small scale, stand to face as they move forward. In addition, the team gathered new material for the roadmap regarding what many people in the industry see as one of the most important challenges to fostering renewable energy projects in the country – adequate financing. The general consensus is that the financial sector has little-to-no experience securing some form of collateral against which a project can be financed. As many participants shared with us in a more simple way, “The banks know how to create a loan for a car. You miss your payment, they take the car and re-sell it. If you miss a payment on a renewable energy project, what are they going to do? Take the panels off your roof?”
During the course of the workshop, the role of government and laws regarding renewable energy provided lively dialogue among participants. There are strong feelings that if the government does not improve its ability to enforce the laws it creates regarding renewable energy, meaningful progress will not be made. Many questions remain unanswered regarding important instruments such as a fund levied by a fossil fuel tax. Many people agree that such an instrument is needed and that one has in fact been established. Exactly where that fund is, how much is in it and who controls it remains a mystery – as well as a point of contention. However, there was general agreement that a lack of implementation and follow through will, in the long run, hinder renewable energy growth as investors will not have the confidence needed to make the type of long-term investment necessary to build a thriving renewable energy market.
While this workshop represents a sizeable milestone for the project, there is still much work to be done. The team will immediately start working on revising the roadmap for its next draft. That will include revising certain sections related to the feedback and input received, filing in gaps for which the team previously had little information and strengthening the recommendations Wolrdwatch plans to make in light of its research.