New conditions to request concessions for renewable energy projects

March 22, 2023

The National Energy Commission (CNE) of the Dominican Republic, through its resolution No. CNE-AD-0004-2023, established new requirements for Battery Storage Systems (BESS for its acronym in English), belonging to the projects of generation of electrical energy from variable renewable energies.

The purpose of this measure is to use BESS systems in energy arbitration services and thus promote a better functioning of this electricity subsector. With this resolution, the regulatory regime for new renewable energy generation projects was updated, including photovoltaic energy generation projects.

The main purpose of this standard is to instruct interested petitioners or owners of energy generation facilities (variable renewable primary source), the new requirements and procedures to carry out the activity of renewable energy generation with the BESS systems.

In this way, investors benefit from all the incentives established by Law No. 57-07 on Incentives for the Development of Renewable Energy Sources and their Special Regimes, if their project has the necessary storage facilities to offer to the system the energy arbitration service.

The energy arbitration service consists of the energy offered by the storage systems, which maintain operations for the sale and discharge of energy in periods of higher prices, and the purchase and charging of energy in periods of lower prices.

The application of this resolution will be governed according to the following modalities:

-Projects with capacities under 50 MW ac, storage systems will not be required.

-Projects with capacities equal to or greater than 50 MW ac and up to 100 MW ac, must have a storage system of up to 30% of its capacity, with a minimum duration of four hours of storage.

-Projects with capacities greater than 100 MW ac and up to 200 MW ac, with 50% of their capacity, with a minimum duration of four hours of storage.

-Projects with capacities greater than 200 MW ac will require a prior evaluation carried out by the National Energy Commission (CNE), which determines its suitability, always ensuring the reliability and security of the National Interconnected Electric System (SENI).

With this new segmentation, new investors in the renewable energy subsector that are in the exploratory phase must carry out the corresponding technical and financial studies, since compliance with these regulatory novelties could potentially change their financial scheme.

The new battery storage scheme promises not only to provide the management of variable renewable energy with greater stability but could even improve the prospects for the return on investment of the projects, due to the confidence that supply in the energy sector is essential, which the Dominican authorities seek to strengthen with this new norm.