Cross Border Transactions

DOMINICAN REPUBLIC—Executive Branch Submits to Senate Bill Aimed at Amending Article 5 of the Renewable Energy Incentive and Special Regimes Law (Law No. 57-07)

Author: Cristian Vallejo

Spanish

The Executive Branch has submitted to the Senate a bill (Bill) introducing amendments to Article 5 of the Renewable Energy Incentive and Special Regimes Law, promulgated on May 7, 2007 (Law 57-07). The main purposes of such amendments are to broaden the type of biomass projects eligible for the benefits contemplated by Law 57-07, and include energy production using Urban Solid Waste (USW) and energy production based on the use of the earth’s internal heat (geothermal) within the scope of Law 57-07, so that these types of projects can also benefit from the incentives contemplated by such law.

Biomass

With respect to generation projects based on biomass, Law 57-07 currently limits such projects to those that do not exceed 80 MW of capacity and have, at least, 60% of biomass, and extends the incentives contemplated therein only to biomass projects aimed at producing electricity without considering, as the Bill states, that heat and steam can also be produced with such primary source of power. Said omission, the Bill states, has a negative impact on the viability of projects that use biomass in general (from a financial point of view), so it is essential to rectify such omission in order to effectively promote investments in projects of this type.

To that end, the Bill contemplates the following amendment to paragraph (e) of Article 5 of Law 57-07:

Current Text of Paragraph (e) of Law 57-07

Amendment to Paragraph (e) of Law 57-07 Contemplated by the Bill

“Article 5. Scope of Application. There shall be eligible for the incentives contemplated by this Law, once the project’s physical, technical, environmental and financial feasibility is demonstrated, all public, private, mixed, corporate and/or co-production of energy or production of bio-fuel projects, of sources:”

“(e) Power plants that use primary biomass as their main fuel, which can be used directly or after a transformation process to produce energy (at least 60% of primary energy) and having an installed capacity not exceeding 80 MW per thermodynamics or plant unit.”

“Article 5. Scope of Application. There shall be eligible for the incentives contemplated by this Law, once the project’s physical, technical, environmental and financial feasibility is demonstrated, all public, private, mixed, corporate and/or co-production of energy or production of bio-fuel projects, of sources:”

“(e) Facilities that produce energy from biomass, of any power level and of any type of technology, that can be used directly or after a transformation process. The energy projects for the production of electricity from biomass could be developed with cogeneration technology or hybrid with natural gas or another fuel, to the extent the facility uses at least 50% of biomass as a primary source of energy.”

Urban Solid Waste

The Bill contemplates the addition of the following paragraph (j) to Article 5 of Law 57-07 (Scope of Application):

“(j) Facilities that produce energy from Urban Solid Waste (USW), of any power level and of any type of technology, such as: incineration for the production of steam and electricity, biomethanation, landfill degasification, plasma generation process, gasification, pyrolysis and thermolysis. The power projects for the production of electricity from Urban Solid Waste (USW) could be developed with cogeneration technology or hybrid with natural gas or another fuel, to the extent the facility produces at least 50% of the energy cycle using Urban Solid Waste (USW) as a primary source of energy.”

Geothermic

The Bill contemplates the addition of the following paragraph (k) to Article 5 of Law 57-07 (Scope of Application):

“(k) Facilities that produce energy based on the use of the earth’s internal heat (geothermal), of any type and of any power level.”

For more information about Law 57-07 and related topics, please click here.