Cross Border Transactions - DOMINICAN REPUBLIC—Moratorium on Provisional Concessions for Certain Renewables

SUMMARY

Despite the high interest in the country’s energy sector by local and international developers of renewable projects and the government’s commitments and ongoing efforts to diversify the country’s energy matrix, particularly by increasing the available capacity from renewable energy sources, the National Energy Commission (CNE) has yet to lift the moratorium on the processing, and therefore... (see full summary)

 
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Despite the high interest in the country’s energy sector by local and international developers of renewable projects and the government’s commitments and ongoing efforts to diversify the country’s energy matrix, particularly by increasing the available capacity from renewable energy sources, the National Energy Commission (CNE) has yet to lift the moratorium on the processing, and therefore granting, of new “provisional concessions” (government’s preliminary authorization issued for project development purposes) for projects from sources referred to by Dominican law as “non-manageable” renewable energy sources, which include wind and solar photovoltaic projects. The moratorium was initially imposed by the CNE on November 18, 2015, and then reassessed and renewed by the CNE on October 24, 2016.

Dominican law, in particular, the Regulation to Law No. 57-07 of Renewable Energy Incentives and Special Regimes (Regulation) divides renewable energy sources into “non-manageable” and “manageable” sources. According to the Regulation, “non-manageable” renewable energy sources are those of an uncertain nature and, as such, cannot be determined with precision for power generation management purposes. Wind, photovoltaic, run-of-river (special regime) and solar thermoelectric without accumulation sources are expressly listed as “non-manageable” renewable energy sources in the Regulation. “Manageable” renewable energy sources, according to the Regulation, are those that can be managed without losing the corresponding energy resource and, if availability of same is below technical production capacity, energy production can be supplemented by other non-renewable sources (hybridization). Biomass combustion, biomass gasification, biodigestion, hydraulic with reservoir, run-of-river (ordinary regime) and solar thermoelectric with accumulation sources are expressly listed as “manageable” renewable energy sources in the Regulation.

Whether a renewable energy source not expressly included in the foregoing lists should be deemed as a “manageable” or “non-manageable” source must be assessed and determined by the CNE, according to the Regulation.

The moratorium is limited to “non-manageable” renewable energy sources and means, in practice, that:

  • Unless the corresponding project is for self-consumption, the CNE is not processing new applications for “provisional concession” for wind, solar photovoltaic, run-of-river (special regime) and solar thermoelectric...

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