Government working on comprehensive electrity sector plan aimed at changing generation matrix and reducing losses
Jiménez Bichara says that energy sector subsidies eat up US$1.5 billion a year
Diario Libre
SD. The vice president of the Dominican Corporation of State Electricity Companies (CDEEE) Rubén Jiménez Bichara, says that due to the scale and level of the electricity crisis it is no longer possible to reach a solution with just one segment of the sector, but what is needed is a comprehensive, broad-based plan, which will involve administrative efficiency, loss reduction and a change in the generation matrix.
The official stated that this comprehensive solution that the government is promoting to find a way to end the electricity sector problems does not exclude the participation of the communications media and the churches, as well as other segments of civil society, because there are a lot of delayed investments.
Jiménez Bichara said that a comprehensive plan was being drawn up, and although no date has been set, some informal meetings have been held.
"I visited AIRD and Conep. I had meetings in my office with other institutions trying to see how a committee could shape this document so that it may be signed by all the parties. The Church should be there, the communications media, everyone should be there, the political parties, so that it may be a country project," declared Jiménez Bichara
Speaking during his participation in Diálogo Libre, he stated that generation costs of the installed generation capacity are excessively high, where 62% is indexed on the basis of oil prices, which last year closed at an average of between US$101 and US$110 a barrel.
"There is a very large discrepancy between the commercial rate and the indexed rate. All this has to be modified in order to reach a general solution, and this is why I am calling for a comprehensive solution," he said during the meeting.
Jiménez Bichara said that a tender was underway, which meant the plan was up and running. "A tender that is in process and right now next Monday (this Monday) is the date for presenting credentials for the companies that are going to take part in the process", he said.
He stated that recouping their investments in projects like power generating plants would take between 10 and 20 years, which is why what is needed is unity that will protect the plan and a pact where everyone takes part and express their ideas so that whoever comes next can provide it with continuity and maintain the commitment towards whatever can be achieved there.
The contracts
Jiménez Bichara believes that the contracts with the private generators in the electricity sector have had a crushing impact on the country.
He stated that they used formulas where the generators could earn more when fuel prices rose, but that in any company profits fall when costs increase, so he considers the contracts to be illogical and meaningless.
Jiménez Bichara said that the consequence of not renegotiating these contracts has delayed investment in the electricity sector, which has generated "this great crisis" as there is no mechanism for making its negative effects reversible.
"This impossibility of having resources available for investment and improvement that did not take place in past years, now we are paying the consequence", said the official.
In his judgment, renegotiating the contracts could help, but nowhere near the level or in the time that would have been achieved if this had been done at an earlier stage.
The power plants
The vice president of the CDEEE said that the State has not fully taken on the power plant construction plan and does not oppose their construction by the private sector.
He said that the government has a plan in which the private sector, the mixed sector and the public sector all have shares, where each one has to contribute something.
He added that about 600 megawatts needed to be installed urgently in the country, as without them we could fall into crisis, as the system cannot sustain itself in the critical state it is in.
"Therefore from here to the 2019 we have to make a start on the development of the 1,451 megawatts and there is space for all who want to enter." But we also have to achieve the conversion of existing plants, said the official. Jiménez Bichara stated, however that "the fact that we make the plants, automatically puts them (the generators) in a position where they have to make a decision. Either I convert to compete with the ones that are coming or I stay out when they enter".
He clarified nonetheless that the State would not be operating these plants, as its only objective is for them to exist, as a way of bringing about a possible solution to the electricity problem.
He added that if the State owns the plant, it could control costs and ensure that they exist, otherwise there will be no solution to the problem. He said that, "it's not that the plants interest us, but we need cheap and sustainable generation, which is what we try to pass on to the clients".
The official said that they are seeking more cost-effective and sustainable generation, and this is only possible if the generation base is changed.
"Therefore the only interest the State has is to achieve an installed generation capacity that allows for the provision of continuous uninterrupted service, which is also economically sustainable for the population", said Jiménez Bichara.
The official stated that this comprehensive solution that the government is promoting to find a way to end the electricity sector problems does not exclude the participation of the communications media and the churches, as well as other segments of civil society, because there are a lot of delayed investments.
Jiménez Bichara said that a comprehensive plan was being drawn up, and although no date has been set, some informal meetings have been held.
"I visited AIRD and Conep. I had meetings in my office with other institutions trying to see how a committee could shape this document so that it may be signed by all the parties. The Church should be there, the communications media, everyone should be there, the political parties, so that it may be a country project," declared Jiménez Bichara
Speaking during his participation in Diálogo Libre, he stated that generation costs of the installed generation capacity are excessively high, where 62% is indexed on the basis of oil prices, which last year closed at an average of between US$101 and US$110 a barrel.
"There is a very large discrepancy between the commercial rate and the indexed rate. All this has to be modified in order to reach a general solution, and this is why I am calling for a comprehensive solution," he said during the meeting.
Jiménez Bichara said that a tender was underway, which meant the plan was up and running. "A tender that is in process and right now next Monday (this Monday) is the date for presenting credentials for the companies that are going to take part in the process", he said.
He stated that recouping their investments in projects like power generating plants would take between 10 and 20 years, which is why what is needed is unity that will protect the plan and a pact where everyone takes part and express their ideas so that whoever comes next can provide it with continuity and maintain the commitment towards whatever can be achieved there.
The contracts
Jiménez Bichara believes that the contracts with the private generators in the electricity sector have had a crushing impact on the country.
He stated that they used formulas where the generators could earn more when fuel prices rose, but that in any company profits fall when costs increase, so he considers the contracts to be illogical and meaningless.
Jiménez Bichara said that the consequence of not renegotiating these contracts has delayed investment in the electricity sector, which has generated "this great crisis" as there is no mechanism for making its negative effects reversible.
"This impossibility of having resources available for investment and improvement that did not take place in past years, now we are paying the consequence", said the official.
In his judgment, renegotiating the contracts could help, but nowhere near the level or in the time that would have been achieved if this had been done at an earlier stage.
The power plants
The vice president of the CDEEE said that the State has not fully taken on the power plant construction plan and does not oppose their construction by the private sector.
He said that the government has a plan in which the private sector, the mixed sector and the public sector all have shares, where each one has to contribute something.
He added that about 600 megawatts needed to be installed urgently in the country, as without them we could fall into crisis, as the system cannot sustain itself in the critical state it is in.
"Therefore from here to the 2019 we have to make a start on the development of the 1,451 megawatts and there is space for all who want to enter." But we also have to achieve the conversion of existing plants, said the official. Jiménez Bichara stated, however that "the fact that we make the plants, automatically puts them (the generators) in a position where they have to make a decision. Either I convert to compete with the ones that are coming or I stay out when they enter".
He clarified nonetheless that the State would not be operating these plants, as its only objective is for them to exist, as a way of bringing about a possible solution to the electricity problem.
He added that if the State owns the plant, it could control costs and ensure that they exist, otherwise there will be no solution to the problem. He said that, "it's not that the plants interest us, but we need cheap and sustainable generation, which is what we try to pass on to the clients".
The official said that they are seeking more cost-effective and sustainable generation, and this is only possible if the generation base is changed.
"Therefore the only interest the State has is to achieve an installed generation capacity that allows for the provision of continuous uninterrupted service, which is also economically sustainable for the population", said Jiménez Bichara.
Diario Libre
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