Energy in the Dominican Republic

Energy in the Dominican Republic

SANTO DOMINGO –“We are at a decisive moment,” said Congressman Pelegrín Castillo during his presentation at a January 31 forum titled, “Energy and the New Administration in the Dominican Republic.”

The day-long program hosted at CEI-RD and co-organized by the Institute of the Americas and the Congress of the Dominican Republic was attended by over 150 representatives.

Congressman Castillo added that it is time for “important changes to confront important challenges in the nation’s energy sector.” He joined a succession of speakers throughout the day who spoke in frank terms about the recurring issues facing energy and economic development in the Caribbean nation.

Finalization of the new electric sector pact and, most importantly, execution of its mandates as well as other clear signals for the energy sector are required by the Medina administration.

The polemic nature of energy, but the electric sector more specifically, evoked predictable discussions over the role of government subsidies, inefficient use of electricity and consumption habits.

But the increasingly forthright analysis of non-technical losses – they are nothing more than theft, Industry Association VP Milton Morrison argued — and blackout rates that place the Dominican Republic at the top of most undesirable lists and their economic impacts represent a refreshing level of candor from across the government and industry.

In his remarks, Milton Morrison, Exceutive Vice President of the Dominican Electric Industry Association (ADIE) offered a series of recommendations to improve the state of the electric sector in the Dominican Republic

There was also good news shared by some speakers. As in many other parts of the world, the golden era of natural gas has touched the Dominican Republic. The country is enjoying the good fortune of developing significant imports of natural gas for its energy matrix.

On the back of the AES liquefied natural gas importation infrastructure, almost 21% of current installed electric capacity comes from cheaper, cleaner burning natural gas fired generation, with the potential to convert an additional 1050MW in the next two years from diesel and fuel oil to natural gas.

Pascual Prota, president of the National Maritime Authority and Congressman Castillo both pointed to natural gas and the country’s dependency on imported hydrocarbons as the rationale behind proposed efforts to conduct an updated analysis of the nation’s oil and gas potential with the intention of launching exploration rounds.

A presentation by Anthony Bryan of the University of the West Indies provided a Caribbean context for the proposed launch of oil and gas exploration in the Dominican Republic. Dr. Bryan simultaneously offered a cautionary tale about the reality of the endeavor given more lucrative deep water opportunities elsewhere in the Caribbean, the disappointing bid rounds and exploration results for some countries, but also the huge return if oil and gas are found and properly managed as has been done in his native Trinidad and Tobago.

Most notable, however, may have been the unofficial presence of Venezuela on the agenda. The issue of Petrocaribe and its sustainability coursed through much of the presentations and discussion.

Developments in Venezuela — the health of Hugo Chavez but more importantly that nation’s dire economic situation — provoked several warnings for policy makers and officials in the Dominican Republic. Indeed, the real possibility of the disappearance of Petrocaribe’s financial windfall in the Dominican Republic may be important to finally drive energy security some panelists argued.

The intense day of discussion on January 31 underscored that there is no lack of ideas and possible solutions. Yet there is an urgent need for skillful management and execution by the new authorities. That is to say, careful attention must be paid to how to balance the realities of energy supply and demand, private investment and government policy.

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