Working towards a more efficient, diversified and sustainable energy sector

To promote diversification with renewable energies, expand the country’s electricity supply and reduce losses in the distribution network are some of the government’s main goals.

The Dominican Republic is determined to have an energy transformation. To start, the country has committed to reduce its carbon dioxide emissions by a third in accordance to UN's 2030 development goals, since more than 71% of the electrical power generation depends on coal and natural gas. Those goals are in line with president Luis Abidaner’s diversification of the country’s energy matrix with cleaner technologies, a strategy that aims to increase the sector’s competitiveness.

To achieve this, the government is supporting a new law project that will modify the 2007 Renewable Energy Incentives Law, restoring to 75% the level of fiscal credit for investments in renewable energies. “This new regulation will allow the energy trading contracts to be bid for competitively”, says Minister of Energy and Mines Mr. Antonio Almonte Reynoso. With this adjustment, they expect to reach their goal of increasing the contribution of renewable energy sources in electricity generation to at least 25% by 2030.

Similarly, as part of its “Zero Bureaucracy” program, the government is committed to increasing transparency and speed in the process of granting permits for renewable energy investments. Since the Ministry started handing facilities to national and foreign investors for the installation of solar parks and wind farms, seven energy trading contracts have been signed, with five more wind power energy deals to be closed in the coming weeks.

On the other hand, several efforts have been made to increase the efficiency and coverage of the country's electric power system. On February 2021, the government signed the Electricity Pact, a structural reform that aims to reduce losses in the distribution network, promote the financial reliability of energy distributors and improve competitiveness and quality of life. They are also working on the expansion of the electric power system, which is expected to be ready by 2023.

So far, most sustainable energy projects have come from private or private-public partnerships. CEPM, the Consorcio Energético Punta Cana–Macao, a privately owned utility company that provides energy to more than 65% of the country’s touristic sector, has contributed significantly. In 2011, CEPM inaugurated the first 8.25 MW wind farm in the country, and two years later their international parent company InterEnergy Holdings (IEH) obtained a USD $100 million equity investment from World Bank Group’s IFC to develop cleaner and more efficient energy sources. Last year, they converted three major 730 MW electric plants fueled by diesel to natural gas, adding an extra contribution to the country’s transition to cleaner energies.

Together with the Ministry of Environment, CEPM plans to install last generation solar panels and batteries to cover 100% of the electricity needs of the 800 inhabitants of Isla Saona, with an initial investment of USD $10 million. CEPM is also committed to sustainable mobility. They have installed over 300 units of state-of-the-art electric vehicle charging stations nationwide and started converting their own fleet, which they expect to be 100% electric by the end of the year.

To guarantee the continuity of this process, the government is actively seeking private investors interested on renewable energy initiatives, electrical power generation and distribution, and/or system maintenance projects. As Minister Almonte states, “the only way to move forward and continue strengthening the energy sector is through capital investment by the private sector. Investments that promote technological changes will lead to the generation of electricity and the use of renewable resources. Because of the country’s potential, there are great opportunities for everyone to win.”

Innovative and efficient mining adding shared value to the Dominican Republic

Groundbreaking techniques and an active participation of local content have made their ferronickel production more cost-efficient and environmentally sustainable.

“Going from a maintenance status to where we are today is something that makes us all proud”, says Mr. Ionnis Moutafis, President and General Manager of Falconbridge Dominicana, Falcondo. Since its acquisition by Americano Nickel in 2015, Falcondo has managed to evolve from a 120 employee maintenance operation to being one of the country’s biggest exporters and employers. Their success is demonstrated by their two fully operative production lines, 2000 employees, and over USD $400 million in exports coming from their operations in Bonao, where Falcondo manages one of the largest and most efficiently produced nickel deposits worldwide.

Several innovating techniques developed by Falcondo in the last 11 years have contributed to maximize efficiency and reduce costs. The application of selective mining in the first phase of operations allowed them to go deeper without extracting large amounts of material that later has to be disposed. Replacing traditionally used naphtha reduced energy costs in the process plant as well as gas emissions in their chimney. Falcondo aims to take this process even further by applying the new technology of electrostatic precipitators, that so far has only been used by three companies in the world. Similarly, replacing ferrocenes with ferronickel granules has proven to be more commercial and easier to handle.

Falcondo’s success is also supported by the current favorable conditions of the metal markets, particularly the increase in the demand of nickel and zinc, that are now used to produce electric car batteries. As Mr. Moutafis explains, “It is the first time we have a direct interaction between the car industry and the metal producers. We have identified this opportunity, and the company today is on track of an investment of more than USD $80 million.”

On the other hand, one of Falcondo’s trademarks is their emphasis on working with local content and creating shared value with the local communities. First, by integrating the local population who have worked at the plant for years with the expertise of foreign employees. Secondly, by hiring people from the surrounding communities without demanding conditions they cannot meet, so they can improve their livelihoods, and by becoming part of the company, strengthen the ties between them.

Furthermore, Falcondo actively engages with the communities by identifying the most relevant local issues and high impact projects, investing on them through their Social Responsibility Department and the Falcondo Foundation. In the future, Falcondo aims to continue researching and developing the mining industry in the country, particularly that associated with car batteries, as well as securing their energy needs by diversifying their supply. Privileging an innovative and efficiency-oriented approach to business, as well as a long-term commitment to their employees, stakeholders, management and local communities, Falcondo’s success is to be expected.