Watts Up?

Recent reforms have taken the form of multifarious investment projects—renewable energy, better engineering and industrial infrastructure, and reforming and modernizing the national grid, enabling more people to access a bigger and better power supply. This is now beginning to have a real impact, reducing costs to the consumer and ensuring enough power is available to fuel a sparky economy.

In many ways, 2014 was the year that such reforms began in earnest, and in three significant ways. First, reliance on fossil energy has declined, from 86% of the sector’s total in 2006 to 74% in 2014. Aside from efforts to open up new fronts in renewable energies (see below), the sector’s reforms have also led to greater efficiency, smaller scale generator facilities and upgrades to stations. Eight micro-hydroelectric plants and three substations were completed in the year to June 2014. Several other substations were renovated. These new facilities give the government better capabilities in terms of monitoring—and therefore anticipating—changes in demand day-to-day.

The National Energy Plan sets out the Government’s goals for the coming 10 years. The Minister of Energy and Mining, Pelegrí­n Horacio Castillo Semán, told TBY: “In 2015, we will have an energy efficiency and government savings law that will give access to this policy to the entire society. We aim to substantially increase the country’s fuel storage capacity, which is crucial in some categories. With a consumption of 140,000 barrels a day, it makes sense to increase the country’s refining capacity and take advantage of our geographical location and become a center of storage, processing, mixing, and regional and international distribution.”

Second, and in tandem with this, renewable energy now accounts for some 15% of the country’s power supply, up from just 5% 10 years ago. This is partly thanks to a law passed in May 2008 that committed the country to embracing renewable energies, and setting out this commitment on the statute book. The law was reflective of the country’s commitment to green energy, and to an open policy of following in the US’ footsteps, as well as being reflective of a change in the way the Dominican people saw the issue. In short, in 2008 the environment became a priority for the government, and 2014 saw major advances on the back of the past five or six years’ investment and policies.

Solar and wind are the mainstay of the Dominican Republic’s renewables bringing the country’s renewable capacity to some 500 MW by the end of 2013—representing an investment of $900 million. The Dominican Republic is committed to obtaining 25% of its energy from renewable power sources by 2025, as part of a wider goal to reduce greenhouse gas emissions by 25% by 2030. Plans will be announced in 2015 for a massive wind turbine farm off the country’s northern coast. This area, and the border region with Haiti, is described by Mr. Semán as having “the best solar radiation, great wind resources, and significant potential for marine energy.”

The Haina Electricity Generating Company (EGE Haina) invested $100 million in the Los Cocos Wind Farm in 2013, which came on-stream last year. The farm already generates enough wind-power to save some 200,000 barrels of oil a year.

The Dominican Corporation of State-Owned Electricity Enterprises (CDEEE) is currently overseeing, among other renewable-energy projects, a number of big hydroelectric initiatives. Several of these have involved re-building existing dams that had fallen into disrepair. These dams are being rehabilitated and form an important part of the renewable energy project overall.

Third—and arguably most important, at least in the short- to medium-term—is the development of three hydropower plants to cope with the country’s massive increase in demand. These are coming on-stream in 2014-2015, generating an extra 762MW of electricity in the coming year. These plants, in addition to two new coal-fire plants, will go some way to correcting the current shortfall in the system.

This is part of a longer-term policy to utilize natural gas and coal over the traditional oil, alleviating the country’s reliance on an expensive commodity, and better positioning the sector to cope with the expected increase in demand.

Thus a long-time net importer is slowly but surely becoming better placed to redress the balance, and ensure that the country is able to meet its growing demand for energy. For the government, the prime concern is to ensure the growing manufacturing and industrial base is not hindered by lack of access to affordable electricity. As a result, spending on infrastructure is of paramount importance.

One way to help ensure this is possible is greater implementation of renewable technologies. Renewable energy has the potential to alleviate all the problems besetting the sector. Most obviously, it can make up for the age-old shortfall in supply. It is also homegrown, and comparatively cheap—both to install and to supply. Thirdly, it neatly nudges the country off sole dependence upon oil, and the expense and unpredictability that goes with reliance on oil derivatives.

According to the CDEEE the new projects launched since 2013 have a total capacity of 1,955 MW. This is still not enough to supply the country’s ever-increasing needs. But the trend is headed in the right direction, and the reforms are being implemented at the right time. The Dominican Republic’s appetite for energy is forecast to grow 20% YoY and it will be challenging to maintain the level of expansion needed. Signs are, though, that the government has put in place the framework for a national grid that is modern, efficient, and reliable—and on a par with the country’s economic prospects. The two, after all, go hand in hand.