Beginning May 2010, a consortium of Florida universities – led by the University of South Florida, and including Florida International University – sent small student teams to Panama and the Dominican Republic to seek out alternative energy export opportunities abroad. Students were provided with in-country energy internship placements and allotted six weeks to identify international markets where small alternative energy businesses in Florida could potentially sell their products and services. The following paper was written by two students sent to Panama and placed at Applied Energy and Services (AES) Panamá, a subsidiary of AES Corporation that specializes in hydroelectric power generation.
Summary Findings from Energy Study in Panama
It first describes Panama’s energy market in general, with an emphasis on the electricity sector, and its (largely hydroelectric) potential for expansion. This is followed by detailed analyses of the country’s hydroelectric, solar, wind, geothermal, and biofuels developments. Opportunities for alternative energy business owners in Florida, when available, are outlined. For example, U.S. Senior Economic Officer Daniel T. Crocker says these businesses can meet specific Panamanian production bids through sub-contracting.
Although the paper concludes that Panama currently holds few opportunities for small businesses in Florida, positive developments are also explained: the Panamanian government is attempting to promote alternative energy development through private sector incentives, and the current expansion of the Panama Canal offers positive implications for Florida business in general.
Finally, students offer an editorial opinion, that Florida’s alternative energy industry can be further developed through the adoption of a sub-national cap-and-trade system, as well as a state-legislated renewable standard portfolio.
Summary of Findings from Alternative Energy Study in Dominican Republic
What is energy demand in country?
About 92% of the population (of about 9.8 million people) has some kind of access to the electric grid. Rural houses, schools, and hospitals are particularly in need of connection to the grid. Even in urban areas, however, an energy shortage exists and the supply of energy is unreliable.
Most of the inputs into alternative energy production in the Dominican Republic are imported from abroad. This includes solar panels, solar water heaters and pumps, wind turbines and biomass generators. They come mainly from Europe and Asia; it is possible that Florida businesses can take advantage of their proximity and be competitive in this market.
What government policies exist to promote alternative energy?
Law 57-07 was passed on May 7, 2007 – it is the only law that is directly related to renewable energy. The Comisión Nacional de Energía (CNE, National Energy Commission) oversees the execution of the law and its benefits. The Law is non-binding and only applies to those who wish to take advantage of the benefits (incentives, exemptions, concessions) it offers. In addition, anecdotal evidence suggests that the bureaucracy involved in complying with the law is not always worth the benefits, and thus a number of alternative energy investors and businesses are completing their projects independent of the law.
Among the regulations imposed are:
- The government will define “zones” in which wind or photovoltaic systems may be built
- The government will approve location of alternative energy systems for electricity, to ensure that supply is not concentrated to heavily in one particular area
- The government will set the sale prices of energy, based on the cost of production, plus or minus a premium that it sets for each type of renewable energy
- Alternative energy enterprises must apply to the CNE to receive the benefits of the law and, once approved, must have a qualified liaison to the CNE
- Alternative energy enterprises must follow of variety of requirements related to size of enterprise, type of alternative energy source, etc.
Among the benefits offered are:
- A guarantee that surpluses from approved alternative energy systems will be purchased by the government (through the distribution companies)
- Import taxes are exempt for all equipment, machinery and accessories needed for production of renewable energy (THIS IS IMPORTANT FOR FL BUSINESSES)
- Income tax exemptions, tax deductions for financing, and tax credits for investments for businesses involved in alternative energy
- Community-based organizations can get access to preferred financing for the development of alternative energy
Which are the AE growth sectors?
Of the 96 current concessions for alternative energy production, 45 are for wind energy, 15 for solar energy, 18 for biomass, 4 for hydroelectric, and 4 for natural gas.
BIOMASS: Agro-climatic conditions in the DR are favorable for high energy yielding plants such as sugar cane, sweet sorghum, and sugar beet for ethanol; African palm, castor tree, coconut, or jatropha plants for biodiesel. Cogeneration of bagasse from sugar cane milling is already possible. Municipal and agricultural wastes are also potential sources.
Sugar can bagasse currently produces 8% of total energy production, primarily for electricity.
HYDROELECTRICITY: Hydroelectricity produces 6% of total energy production, mostly in the southwest section of the country, and produce 15% of total electricity production in the country.
SOLAR ENERGY: A high amount of solar radiation hits the Dominican Republic, making solar technology very feasible. Currently, only 0.1% of energy production comes from solar energy. Solar water heaters and isolated solar photovolataic systems are already being used in the country, and the latter could be particularly useful in rural areas that are not connected to the electrical grid. There are plans underway to install photovoltaic systems in 22 schools, in particular.
WIND: While no wind energy systems are yet in place, several studies have shown that the country has several viable places to harness wind power. There are six projects that have received concessions, however.
Caveats for Florida small businesses
The government bureaucracy can delay approval of projects, and within the approval process there is a lack of transparency
DR. KIRAN C. PATEL CENTER FOR GLOBAL SOLUTIONS
University of South Florida 4202 East Fowler Avenue, CPR107, Tampa, FL 33620-8100 (813) 974-2954 • Fax (813) 974-2522 • PatelCenter.org
The following paper was written by six students sent to the Dominican Republic to conduct research on alternative energy.