Power policy

The Dominican Republic has set a target to get 25% of the total energy generation from renewable sources by 2030. As of December 2020, clean generation accounted for some 16% of the 17,664 gigawatt-hours the country had consumed during the year. The Dominican Republic also has in place a net metering program, which allows retail electricity customers with rooftop solar to be compensated through credits on their bills for sending surplus generation back to the grid. As of January 2020, the total users of the Net Metering Program were 5,047, and the total capacity installed was of 135.49 megawatts compared to 93.02 megawatts and 3,554 users in 2018. By July 2021, there were 8,166 users and 200 megawatts installed.

Power prices and costs

The annual average Dominican Republic residential power price dropped by a massive 35% in 2019 from the year prior, to $86.42 per megawatt-hour. Commercial prices also were down, from $176.60/MWh in 2018 to $167.78/MWh. Average industrial prices decreased only slightly, to $143.45/MWh, while wholesale prices ticked slightly up to $142.71. All three prices remained flat from 2019 to 2020. Substantial subsidies targeting the retail segment of the market have kept those prices particularly low. With the commissioning of the Punta Catalina coal-fired power plant in 2019, the government foresees the possibility of cutting back on subsidies without prices having to spike. Several delays due to corruption and Covid-19 pandemic, however, are postponing this.

Power market

The Dominican Republic had 8.32 gigawatts of installed capacity in 2020, compared to 8.27 gigawatts in 2019. Oil, diesel and coal are the main sources of electricity, accounting for 6.13 gigawatts, or approximately 73% of total capacity. Small hydro, wind, solar and biomass together account for 11%.

The generation market is composed of several players, including private and state-owned companies. None of these companies are solely responsible for electricity generation. There is a spot market where generators, distributors and large end-users can buy or sell the short-term energy deficit or surplus.

The Dominican Republic’s clean energy sector attracted $1.6 billion of investment over 2010-2020. Wind captured the bulk of this total, at $764 million, followed by solar, with $523 million. Over half the investment was recorded from 2017-18. In 2019, investment dropped to $138 million from $405 million the year prior and kept falling to $101 million in 2020.

In August 2020, Decree 342-20 established the liquidation of Corporacion Dominicana de Empresas Electricas Estatales (CDEEE), the administrator of state-owned or controlled companies in the country’s power sector. Its functions were transferred to the Ministry of Energy and Mines (MEM). In addition, the decree initiated the restructuring of the Unidad de Electrificacion Rural y Suburbana (UERS) – which oversees the electrification of regions outside of urban areas – and the merger of the three boards of directors of the electricity distribution companies (EDEs) into a single one.

Doing business and barriers

The Dominican Republic plans to provide universal access to electricity with programs such as the 'Unidad de Electrificacion Rural y Sub-Urbana' (UERS). However, it has not established a specific target. In 2020, the Dominican Republic’s electrification rate was 97.8% and demand for power in the country has grown briskly over a decade. Specifically, peak power demand jumped 42%, from 1,810 megawatts in 2010 to 2,576 megawatts in 2020, while average annual generation grew 20% over the same period. In May 2019, CNE authorized 12 provisional concessions for potentially 874 megawatts of capacity.

A General Electricity Law states that if a generation company decides to settle in a geographical area where there are no interconnection facilities with the electric power system, a special concession to install the interconnection line can be obtained, provided that the transmission company does not assume the corresponding investments. In this case, the form in which the transmission company will reimburse the costs incurred by the generation company will be agreed upon.

Formal barriers to developing renewables in the Dominican Republic are relatively low. An incentive regime for the development of clean energy has been in place since May 2007, consistent with the national energy plan (the Plan Energetico Nacional, or PEN). It includes an investment tax credit, external financing, tax reductions, and exemptions from taxes and import duties for industrialized goods and services. Renewable energy generators have dispatch priority and open access to transmission and distribution.

EV market

EV sales in Dominican Republic gradually increased from only 34 cars in 2017 to 438 in 2020 including hybrids. The government is yet to implement a decree that regulates EV chargers and introduce incentives related to electricity tariffs and charging infrastructure. While this market is on the way up, gasoline is the most affected by tax levels, with taz at 36%. In order to incentivize the importing of non-conventional energy vehicles, the Dominican Republic allows electric vehicles to enter the country by paying only 50% of the usual tariff, 50% of VAT and 50% for the First Plate rates. However, the benefit applies only to the importer, not the end user, which means that the rate reduction is not transferred to a third party in the event of the vehicle being sold.

EV policy

The National Strategic Plan for Electric Mobility published in 2020 expects that by 2030, some 70% of the public transport fleet will be electric vehicles and in the case of private vehicles, it will be 15% by 2025 and 30% by 2030. In addition, another target is that electric motorcycles registered from the private sector represent 5% of the national fleet by 2030. It also expects to implement 14,000 EV charges by 2030. The Consorcio Electrico Punta Cana Macao (CEPM) plans to install only 500 chargers by the end of 2021.

Buildings market

The government has yet to implement any substantive policy support in this sector and the low-carbon heat market remains at an early stage.

Buildings policy

The government has yet to implement any substantive policy support in this sector and the low-carbon heat market remains at an early stage.