Feature photo via Canva Pro.

By Zahiris Priscila Francisco Martínez

Waste is costly. In the Dominican Republic, according to a document from the Coordinating Body of the National Interconnected Electric System (OC) that was accessed by both Climate Tracker and Global Voices, renewable energy companies lost around USD 5.17 million between January and June 2025 because the country chose to waste part of the solar energy generated.

As per the same document, the state-owned electricity distribution companies Edenorte, Edesur, and Edeeste (the EDES) recorded operating cost overruns of USD 6.5 million by purchasing more expensive fossil energy when they could have purchased renewable energy.

The root of these costs lies in non-compliance with the Technical Minimum Power (PMT) standard by thermoelectric plants — a rule meant to be supervised by the OC — which seeks to limit fossil energy injection to the minimum necessary, to allow greater entry of cheaper renewable energy.

This non-compliance has led the Dominican Republic to adopt a practice known as “curtailment,” which involves limiting and interrupting renewable energy production at a generating plant, even though it may have the technical capacity to produce more at that time. This is done to avoid excess supply on the grid, which can occur due to congestion, lack of storage, or a mismatch between peak production hours (such as solar energy at midday) and peak demand (such as in the afternoon). These combined practices delay the energy transition and also represent higher costs for the country.

Renewable losses, expensive energy, and the state footing the bill

Since October 2024, the Procedure for the Application of Generation Limitation for Safety Reasons in the National Interconnected Electric System (SENI) has been in force. The resulting costs not only directly affect renewable generators, whose energy injection into the system is limited, but also impact the spot market and electricity distribution companies.

In an official OC report on the curtailment situation between January and June 2025, renewable energy curtailed in May reached 16,171 megawatt-hours (MWh), representing an average of 18 percent of total energy, while in January, an average of 21 percent waste was recorded.

Under the argument of safety reasons and operational restrictions, SENI keeps a minimum number of thermal power plants in operation, with its data showing that curtailment has been applied during hours of maximum renewable energy production.

According to the State-Owned Electric Companies Performance Report, the average energy purchase price decreased in 2025, affecting the revenues of renewable companies whose Power Purchase Agreement (PPA) contracts are linked to these reference values. Renewable sources, operating under fixed-price agreements or prices adjusted according to official indices, saw their profit margins reduced because of the drop in average prices.

In contrast, many thermal plants without PPAs sell their energy on the spot market, where the marginal cost increased from 9.75 to 12.65 US cents/kWh between January and July 2025. This increase enabled them to improve their revenues and take advantage of a more favourable pricing environment, thereby reinforcing their competitive advantage over the renewable sector. With non-compliance with the law and thermal plants operating above permitted levels, the EDES ultimately pay more.

In the Dominican Republic, the state subsidises the EDES. In 2024 alone, DOP 86,393 million (around USD 1,388 million) were budgeted in subsidies, meaning that the financial losses of these companies are also a loss of public funds. Alfonso Rodríguez, current president of the Association for the Promotion of Renewable Energies (ASOFER), said that “as a consequence, distributors end up acquiring more expensive and more polluting energy, while investors in renewable sources see their profitability reduced.”

The state continues to pay for the lack of grid modernisation. Law 80-24, establishing the General State Budget for the 2025 Fiscal Year, allocated USD 75,000,000 to the Program to Support the Improvement of Electricity Distribution Networks, executed by state-owned electricity distribution companies, and USD 225,000,000 to the Program for the Improvement of Medium- and Low-Voltage Networks and Customer Regularisation for distributors. The lack of modern networks and insufficient storage are crucial factors that cause curtailment. The comparison between losses arising from curtailment and the resources allocated in the budget shows the double negative impact of this practice.

Inflexibility limits renewables and benefits the fossil regime

Another situation that ends up privileging fossil fuel injection over renewables in the grid is forced dispatch, a practice that allows thermal plants to generate energy and receive compensation even when the system does not require it. However, this mechanism does not apply to renewable energy plants, creating an imbalance in the treatment of different generation sources.

José Luis Moreno, engineer and professor at the Energy Institute of the Autonomous University of Santo Domingo (IEUASD), stated that “payment for forced dispatch constitutes economic remuneration for energy delivered that should not be delivered, because the plant does not compete with others on price but — due to its inflexibility — it cannot shut down quickly, so it must remain online and is therefore paid forced dispatch for technical reasons.”

Because some plants, especially large thermoelectric plants, cannot be easily shut down, they are forcibly dispatched even when their costs are high and they are not competitive. As a result, cheaper plants like renewables are limited and cannot reach their maximum generation potential.

“Plants are dispatched based on how competitive they are in cost — those with cheaper fuel costs first. Then, costs increase until demand is met; when you stop being competitive, you stop dispatching energy, unless you are inflexible, in which case you are forcibly dispatched,” Moreno explained. This essentially means that you do not compete, but you cannot shut down. “Thus, another plant that should have dispatched because it was more competitive does not dispatch,” he continued. “In this case as well, renewables are curtailed.”

According to the OC, compensation for forced dispatch amounted to USD 7.44 million between January and June 2024, and USD 11.33 million between January and June 2025, establishing a margin of USD 3.89 million for the state-managed distribution companies.

This exacerbates the economic deficit of the Electricity Distribution Companies (EDE), which reached an accumulated USD 936.7 million by July 2025, according to the State-Owned Electric Companies Performance Report for July 2025. In the overall financial result, this amount was largely covered by the state, which contributed a total of USD 737.3 million.

The roadmap (REmap) of the International Renewable Energy Agency (IRENA), published in November 2017, highlights the DR’s potential to increase the share of renewable energy generation to 44 percent by 2030, based mainly on solar photovoltaic energy, wind energy, and bioenergy.

“To harness this potential,” the report states, “the Dominican Republic must overcome institutional, economic, and technical challenges. In the case of the electricity sector, the REmap study suggests solutions to address issues related to generation adequacy and flexibility, ensuring the development of electricity grids, which in turn helps manage the limited predictability of solar and wind energy, as well as the effects of the rapid penetration of these variable renewable energy sources.”

From Moreno’s perspective, the solution is both obvious and cost-effective: “Store energy primarily to regulate frequency and enable photovoltaic plants to safely enter the system.”

This story was produced with the help of Climate Tracker Latin America.