Energy efficiency for businesses
Energy efficiency for businesses
Business Model Description
Innovative products and services with a focus on digitalization and good environmental practices that promote energy efficiency through energy audits, training, and consulting, as well as process optimization, use of efficient technology and investment in renewable energy for companies.
Expected Impact
The focus on energy efficiency in Dominican companies drives significant savings, sustainability and contributes to climate change mitigation.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
Disclaimer
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Country & Regions
- Cibao Norte
- Valdesia
- Enriquillo
- Yuma
- Ozama
Sector Classification
Renewable Resources and Alternative Energy
Development need
According to the IX Business Convention of the National Council of Private Enterprise (CONEP), in its strategic proposals for the development of the Dominican Republic established "Implement alliances, agreements and business agreements to achieve the commitment of the private sector in meeting the country goals of the Sustainable Consumption and Production Accelerator" (1).
Policy priority
The multi-year public sector plan 2021-2024 proposes to promote the implementation of sustainable production and consumption by: 1) REGULATING the sustainable management of natural resources, 2) PROMOTING clean energy production, 3) PROMOTING sustainable attitudes and practices, 4) REGULATING integrated waste management and 5) PROMOTING innovation and sustainable business" (2).
Gender inequalities and marginalization issues
Women account for 35% of the workforce of the world's leading renewable energy companies, a percentage that far exceeds their representation among traditional energy companies, according to data from the International Renewable Energy Agency (IRENA).
Investment opportunities introduction
There are investment opportunities in solar and wind energy projects, supported by government incentives and financing programs (3).
Key bottlenecks introduction
Challenges include financial constraints, regulatory barriers, and the need to strengthen grid and storage infrastructure to efficiently integrate renewable energy.
Alternative Energy
Development need
The energy sector is the country's main emitter, with a contribution of 62.75% to total emissions and a 90.39% share in the GHG balance in 2015. The main cause is the sustained increase in energy consumption, associated with the increased burning of fossil fuels. In 2022, 83.87 % of electricity generation was based on fossil fuels (4,5).
Policy priority
The DR climate goal for 2030 is to have reduced greenhouse gas emissions by 27% with respect to the BAU (business as usual) trend scenario, taking 2010 as the base year, with estimated emissions in 2030 of 51,000 GgCO2eq. Of the 27%, 20% is conditional on external finance and 7% conditional on domestic finance. Of these 7%, the private sector is responsible for 5% (6).
Gender inequalities and marginalization issues
: Only 16% of the positions on the boards of directors of large international electricity companies are headed by women and, at the current rate, it would take 72 years to reach 40%, according to data from the EY consultancy. In the energy area in the country, 95.1% of those registered are men (7, 8).
Investment opportunities introduction
The national government decided to promote the development of renewable energies through a model based on private investment rather than public investment. A clear and transparent legal framework was created to protect the rights of participants.
Key bottlenecks introduction
Faced with global commitments on climate change and the increase in demand for electricity due to the country's high economic growth, it is necessary to implement far-reaching reforms at the political, institutional, regulatory, and financial levels to help increase the share of renewable energies and improve energy efficiency.
Solar Technology and Project Developers
Pipeline Opportunity
Energy efficiency for businesses
Innovative products and services with a focus on digitalization and good environmental practices that promote energy efficiency through energy audits, training, and consulting, as well as process optimization, use of efficient technology and investment in renewable energy for companies.
Business Case
Market Size and Environment
USD 100 million - USD 1 billion
Energy losses in the distribution process average 28.4%.
According to the World Bank (2017), the global energy efficiency market is US$360 billion. In Latin America and the Caribbean, the demand for energy services is expected to double by 2040. For countries such as Panama and Costa Rica, the percentage loss data only in energy distribution correspond to 13.6% and 10.5% respectively, in the period 2016-2019. In contrast, the DR is 28.4% (10,11,12).
Indicative Return
10% - 15%
The return profile of energy efficiency investments depends on the type of product and service or combinations thereof. Thermal insulation of roofs, walls and thermal windows can reduce heat gain and thus the output of air-conditioning equipment. This results in additional savings of about 15%.
Investment Timeframe
Short Term (0–5 years)
In the case of energy efficiency related projects in the Dominican Republic the cost is 4 years on average according to UNDP interviews with key partners.
Ticket Size
< USD 500,000
Market Risks & Scale Obstacles
Capital - Limited Investor Interest
Impact Case
Sustainable Development Need
Energy shortages and high costs: The Dominican Republic faces power outages and high electricity costs, affecting businesses and the quality of life of the population.
Greenhouse Gas Emissions: Dependence on fossil fuels for energy generation contributes to greenhouse gas emissions and climate change.
Gender & Marginalisation
According to data from INFOTEP's EmpléateYA Program, "there is evidence of occupational segregation by gender among job seekers: the areas of preference for work are totally different between women and men. For example, in the energy area, 95.1 % of those registered are men (16).
Expected Development Outcome
Promote a citizen and business culture of energy efficiency, by inducing practices of rational use of electricity and promoting the use of equipment and processes that allow less use or better use of energy (17).
Promote the rational use and responsible consumption of fuels at the national level.
Implementation of energy efficiency and other technologies for cement production and a massive energy efficiency and cleaner production program in MSMEs.
Gender & Marginalisation
Increase female participation in the energy industry (95.1% are men), reducing the gender gap in energy jobs through inclusive training programs.
Primary SDGs addressed
7.2.1 Renewable energy share in the total final energy consumption
7.3.1 Energy intensity measured in terms of primary energy and GDP
7.a.1 International financial flows to developing countries in support of clean energy research and development and renewable energy production, including in hybrid systems
The country currently has a draft Energy Efficiency and Rational Energy Use Law. In addition, the government created presidential decree 158-23 declaring the implementation of an energy saving and efficiency policy in public administration a high national priority (18).
The country aims to produce 25% of its electricity from renewable energy sources by 2025.
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Public sector
Indirectly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Public sector
Outcome Risks
Increased Consumer Prices: Increased investment costs could lead to higher prices for products and services, affecting consumers.
Unanticipated Job Displacement: Automation and efficient technologies may reduce jobs in certain sectors, creating unemployment challenges.
Technological Dependence: Excessive dependence on technology can generate vulnerabilities to interruptions in electricity supply.
Gender inequality and/or marginalization risk: Without an inclusive approach, job opportunities may not benefit everyone equally, exacerbating gaps.
Impact Risks
Disappointment in Economic Savings: Insufficient financial results may discourage investment in energy efficiency, limiting benefits (19).
Unanticipated Rebound Effects: Improved efficiency could lead to increased energy consumption, negating benefits (20).
Negative Environmental Impact: Inappropriate measures may result in higher-than-expected environmental impact, compromising sustainability (21).
Gender inequality and/or marginalization risk: Lack of inclusive approach could perpetuate gender gaps and marginalization in access to job opportunities and benefits (22).
Impact Classification
What
Encourage responsible fuel consumption and the rational use of fuel resources both in citizen behavior and business operations.
Risk
Risks include the high initial costs of technology implementation, possible disruption in current industrial processes, and the need for technical training and support.
Contribution
Provide technological solutions, financial incentives, or expertise in energy efficiency.
Impact Thesis
The focus on energy efficiency in Dominican companies drives significant savings, sustainability and contributes to climate change mitigation.
Enabling Environment
Policy Environment
National Multiannual Public Sector Plan 2021-2024: redesigns the planning process since the main objective of public policies should be to improve the quality of life of the people (23).
National Energy Plan 2022-2036: Defines goals and strategies for the diversification of the energy matrix, guiding the direction of the energy transition and providing a political framework (24).
Decree 158-23 for the implementation of an energy saving and efficiency policy in all public administration bodies under the Executive Branch, including the central and decentralized public administration, as well as autonomous and decentralized bodies (25).
Financial Environment
Financial incentives: Access to Financing: Multiple banks offer low-interest loans for renewable projects, facilitating investment.
Fiscal incentives: Law 57-07 grants tax exemption on equipment and supplies for renewable energy projects, reducing upfront costs.
Other incentives: Public Auctions: The government conducts auctions for energy efficiency contracts, promoting competition and securing short- and medium-term contracts.
Regulatory Environment
National Development Strategy Law 1-12: Establishes the promotion of clean energy sources as a key objective, guiding the regulatory framework towards the energy transition (26).
General Law of Environment and Natural Resources 64-00: Establishes environmental regulations, promoting sustainable practices in energy investment (27).
Law 57-07 on Incentives for Renewable Energy and Special Regimes: Establishes fiscal incentives and mechanisms to promote investments in renewable energy, providing a regulatory framework for the transition and business model (28).
General Electricity Law 125-01: Facilitates the integration of renewable energy generation in the national electricity system, establishing the basis for the adoption of clean and sustainable energies (29).
Dec. No. 202-08 which approves the Regulations for the application of Law No. 57-07, on Incentives for the Development of Renewable Energy Sources and its Special Regimes (30).
Marketplace Participants
Private Sector
AKUO Energy, ALIGROUP BIOMASS, EASI, Empresa Generadora de Electricidad Haina (EGE Haina).
Government
Ministry of Energy and Mines, National Energy Commission, Ministry of Environment and Natural Resources and Electricity Superintendence.
Multilaterals
German Development Cooperation Agency (GIZ), the United States Agency for International Development (USAID) and UNDP.
Non-Profit
Climate & Clean Air Coalition
Public-Private Partnership
Target Locations
Cibao Norte
Valdesia
Enriquillo
Yuma
Ozama
References
- (1) CONEP. 2019. Strategic proposals for the development of the Dominican Republic: https://docs.google.com/viewerng/viewer?url=https://conep.org.do/sites/default/files/propuestas-para-el-desarrollo-de-rd-paginas-eliminadas.pdf.
- (2) MEPYD, 2021. Plan Nacional Plurianual del Sector Publico 2021-2024: https://mepyd.gob.do/wp-content/uploads/drive/DIGEDES/PLAN%20PLURIANUAL%20SECTOR%20PU%CC%81BLICO%202017-2020/PNPSP-Plan%20Nacional%20Plurianual%20del%20Sector%20Pu%CC%81blico.pdf.
- (3) World Bank. Energy management in the Dominican Republic: https://www.datosmundial.com/america/republica-dominicana/balance-energetico.php.
- (4) UNDP. 2020. First Biennial Update Report of the Dominican Republic to the United Nations Framework Convention on Climate Change: https://unfccc.int/sites/default/files/resource/Dominican%20Republic-%20BUR1.pdf
- (5) Energy Transition Project - Promotion of Renewable Energy to Implement Climate Goals in the Dominican Republic: https://transicionenergetica.do/sobre-nosotros/.
- (6) Presidency of the Dominican Republic. 2021. Government aims for 25% of energy consumption to be renewable by 2025: https://presidencia.gob.do/noticias/gobierno-aspira-que-el-25-del-consumo-de-energia-sea-renovable-en-el-ano-2025
- (7) ILO and UNDP. 2023. Rapid Situational Assessment on the potential for just transition and green jobs in the Dominican Republic: Rapid Situational Assessment on the potential for just transition and green jobs in the Dominican Republic: United Nations Development Program (undp.org).
- (8) IDB. 2021. Women, the engine of the energy transition: https://idbinvest.org/es/blog/genero/la-mujer-motor-de-la-transicion-energetica
- (9) GIZ. 2020. Financing Renewable Energies in the Dominican Republic: https://transicionenergetica.do/wp-content/uploads/2021/03/GIZ_DomRep_Financiamiento-Energ%C3%ADas-Renovables_web.pdf
- (9) AEIH, 2013-2014. Report: http://aeih.org.do/wp-content/uploads/2016/03/Memorias-AEIH-2013-2014.pdf
- (10) MEPYD, April 2022: https://mepyd.gob.do/wp-content/uploads/drive/UAAES/Monitor%20Energetico/Monitor%20Energe%CC%81tico%20abril%202022.pdf?_t=1654716272
- (11) World Bank, 2017. Energy Efficiency: https://www.bancomundial.org/es/results/2017/12/01/energy-efficiency
- (12) IDB, 2019. by all means! Electricity in Latin America and the Caribbean 2040: file:///C:/Users/victor.alfonso.rodri/Downloads/A_todas_luces_La_electricidad_en_Am%C3%A9rica_Latina_y_el_Caribe_2040_es_en.pdf.
- (13) ILO and UNDP, 2023. Rapid Situational Assessment on the potential for just transition and green jobs in the Dominican Republic: Rapid Situational Assessment on the potential for just transition and green jobs in the Dominican Republic | United Nations Development Program (undp.org)
- (14) Empresas Industriales de Herrera y Provincia Santo Domingo (AEIH), 2015. AIEH presents results of the Energy Efficiency project: https://www.cne.gob.do/noticia/aieh-presenta-resultados-del-proyecto-en-eficiencia-energetica/
- (15) National Energy Commission, 2022. National Energy Plan 2022-2036: https://www.cne.gob.do/wp-content/uploads/2022/08/Plan-Energetico-Nacional-WEB-2022.pdf.
- (16) ILO - CINTERFOR. 2021. República Dominicana: análisis de oferta y demanda de empleo y trazabilidad de egresados Infotep, a partir de bases de datos. https://www.oitcinterfor.org/sites/default/files/file_publicacion/BigData_RepDominicana.pdf
- (17) UNDP, 2020. First Biennial Update Report of the Dominican Republic to the United Nations Framework Convention on Climate Change: https://unfccc.int/sites/default/files/resource/Dominican%20Republic-%20BUR1.pdf.
- (18) Presidency of the Dominican Republic, 2023. Decree 158-23 on energy saving and efficiency policy in the public administration: https://presidencia.gob.do/decretos/158-23.
- (19) IDB. 2016. What are some of the main barriers for energy efficiency programs in the power sector in Latin America? https://www.iadb.org/en/story/what-are-some-main-barriers-energy-efficiency-programs-power-sector-latin-america
- (20) IRENA. 2018. Global Energy Transformation: A roadmap to 2050. https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2018/Apr/IRENA_Report_GET_2018.pdf
- (21) IEA (2020), Clean Energy Innovation, IEA, Paris https://www.iea.org/reports/clean-energy-innovation,License: CC BY 4.0
- (22) UNDP. 2021. UNDP Gender Equality Strategy: 2020 Annual Report. https://www.undp.org/publications/undp-gender-equality-strategy-2020-annual-report
- (23) MEPyD, 2021. Pluriannual National Public Sector Plan 2021-2024: https://mepyd.gob.do/publicaciones/plan-nacional-plurianual-del-sector-publico-2021-2024/.
- (24) National Energy Commission, 2022. National Energy Plan 2022-2036: https://www.cne.gob.do/wp-content/uploads/2022/08/Plan-Energetico-Nacional-WEB-2022.pdf.
- (25) Presidency of the Dominican Republic, 2023. Decree 158-23 on energy saving and efficiency policy in the public administration: https://presidencia.gob.do/decretos/158-23.
- (26) Law 1-12 on the National Development Strategy 2030: https://mepyd.gob.do/wp-content/uploads/drive/UAAES/END/Informes%20Anuales%20END/end_2030.pdf.
- (27) General Law on Environment and Natural Resources (64-00): https://observatorioplanificacion.cepal.org/sites/default/files/instrument/files/2000.%20Ley%2064%20General%20sobre%20medio%20ambiente%20y%20recursos%20naturales.pdf
- (28) Law No. 57-07 on Incentives for the Development of Renewable Energy Sources and their Special Regimes. https://www.hacienda.gob.do/wp-content/uploads/2018/11/Ley-57-07-sobre-Energia-Renovable.pdf
- (29) General Electricity Law No. 125-01 and its implementing regulations: https://www.sie.gob.do/images/sie-documentos-pdf/leyes/LeyGeneraldeElecctricidadNo.125-01.pdf
- (30) Decree No. 202-08 which approves the Regulations for the application of Law No. 57-07, on Incentive to the Development of Renewable Energy Sources and its Special Regimes: https://dgii.gov.do/legislacion/reglamentos/Documents/2008/202-08.pdf