INCENTIVES FOR THE DEVELOPMENT OF RENEWABLE ENERGY SOURCES IN THE DOMINICAN REPUBLIC

Contributed by Emily Sucart López , Senior Counsel at Guzmán Ariza and expert in energy law.

On September 27, 2021, President Luis Abinader issued Decree No. 608-21, through which I have modified the Regulations for the Application of Law No. 57-07 on incentives for the development of renewable energy sources and their special regimes, issued by decree no. 202-08 of May 27, 2008

The issuance of the aforementioned decree, and the consequent amendment to the Regulations for the Application of Law no. 57-07, comes from the declaration of high national interest of the liquidation of the Dominican Corporation of State Electric Companies (CDEEE) stipulated in Decree no. 342-20, issued on August 16, 2020.

That said, the issuance of Decree 608-21, has as its main purpose, to substitute the subscription of Power Purchase Agreements (PPAs for its acronym in English) of generating companies by the CDEEE, and instead, to subscribe them with the Electricity Distribution Companies (EDEs), or any other agent of the Wholesale Electricity Market.

Specifically, Decree no. 608-21 deletes numeral 11 of article 39, numeral 11 of article 40, numeral 11 of article 41, and numeral 10 of article 42 of Decree no. 202-08. Likewise, it modifies articles 65 and 66, establishing, in summary, the following:

The holders of renewable energy generating companies may sign renewable energy supply contracts (PPAs) with electricity distribution companies and with any other agent of the Wholesale Electricity Market. According to the following parameters:

  •  Distribution and marketing companies, under equal prices and conditions, will give preference in purchases and dispatch of electricity to companies that produce or generate electricity, from renewable means, such as: hydroelectric, wind, solar, biomass, marine and other renewable sources in accordance with the law and the possibilities of evacuation.
  •  Payment of connection rights by the transmission and distribution companies.
  •  Remuneration to be received according to the scheme established by the National Energy Commission (CNE) and the Superintendency of Electricity in accordance with article 108 and following of the Application Regulation, such reference prices being considered as maximum prices to be paid by distribution companies.

On this, see Resolution No. CNE-AD-0008-2021 issued by the CNE, on recommendation to the Superintendency of Electricity on the reference prices to be considered as a model for determining the competitive remuneration applicable during 2021 to generation facilities that participate in the SENI.

  •  Producers with a definitive concession, included in the registry of the Special Regime, will have the right to receive the remuneration provided for in the previously signed contract, from the distribution companies or other agents of the wholesale electricity market.

On the other hand, the National Energy Commission (CNE), the Ministry of Energy and Mines (MEM), and the Superintendency of Electricity (SIE) are instructed so that within a period of no more than 180 days from the issuance of Decree 608 -21, submit to the Executive Power a proposal to modify Law no. 57-07, which establishes competitive mechanisms for the signing of contracts for the sale of energy from renewable sources.

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