Dominican Republic Tourism Sector NAMA
Biomass and Waste to Energy Climate mitigation and economic
development in the tourism sector
Zugeilly Coss CNCCMDL
Ignacio Santelices CCAP
Global Methane Initiative Methane Expo 2013 March 13th, 2013 - Vancouver, Canada
NAMAs in the Climate Compatible Development Plan
CCDP Fase II
Ley 1-2012 Estrategia Nacional de Desarrollo
2030
CONCEPTUAL
Stakeholders Participation
Tourism Sector
• Component 1. Biomass and waste to energy. – Modular (distributed) biomass facilities in high-density tourist
areas where the produced steam and/or hot water are used for laundry, swimming pools, etc
– Medium-scale refuse-derived fuel facilities that potentially include separation and combustion of waste
• Component 2. Renewable Energy and Energy Efficiency.
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The DR tourism sector NAMA The goal of the NAMA is to reduce emissions by achieving wide-spread adoption of alternative energy technologies and address waste management in the tourism sector.
Preferred management solution combines organic waste separation and clean burning of waste to energy
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Unmanaged waste disposal is inconsistent with luxury tourism
Typical Hotel Punta Cana Hotel Open Dump
Steam Boiler
Combined Heat and Power
Installed Capacity 610 HP 610 HP Thermal 8 MW Electric
Capital Costs $11,691,000 $22,512,000
Annual Fossil Fuel Savings $2,437,000 $2,437,000
Annual Electricity Savings $4,539,000 $4,539,000
Annual Electricity Sales N/A $15,519,000
Emissions Reductions (tCO2e/year) 19,613 68,835
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Technical assessment results CCAP is currently conducting a study for five hotels in the Eastern region of the island, with approximately 2,700 rooms
We estimate 15-25 replication opportunities in the island’s hotel sector
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Once proven, using waste and biomass to produce energy is scalable
Scaling up in numbers
Investment Op. 1 170 - 270 MM USD
Investment Op. 2 (CHP) 320 - 520 MM USD
Emissions Reductions (tCO2e/year)
300,000 – 1.5 MM
Dominican Tourist Areas (“poles”)
• Current concession arrangement is profitable for private utilities – The incentive for private utilities to invest in new,
unfamiliar MSW/biomass-fired capacity is limited given availability of alternatives
• Lack of information and certainty on the availability, quality and cost of biomass across different tourist poles and over time
• Difficulty in permitting process for renewable energy projects
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Barriers to powering hotels with waste and biomass
• Capitalization of a financial mechanism to support waste and biomass projects
• Informational campaign to – characterize quality, quantity and cost of biomass
resources by region – Attract interest and incorporate hotels from other
regions
• Streamlining of permitting process
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Possible components of the NAMA
• Lease financing – No debt. Decision from local manager.
• Equity fund – Highest leverage and participation from local
Banks. Loans could not be attractive for Hotels. • Concessional loan fund - based on no down
payment – Lowest leverage capacity. Greatest reduction
potential. 100% loan in balance sheet.
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Financial schemes for the pilot Project (Biomass and waste to energy)
• The Government of DR is willing to replicate this project having in mind that this is a top-mandate with a bottom-up construction in which the social component cannot be overlooked.
• From the NCCC we will continue to improve the relationship with the stakeholders in both the tourism sector as well as the waste management authorities.
• The sector contributes $100 billion to DR’s GDP, just under 5% of GDP.
• Tourism is the leading earner of foreign exchange in the DR.
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Introduction to the DR tourism sector
• In 2001, the sector used over 100,000 toe for AC, hot water, cooking, pumping, and other uses.
• Improper disposal of waste damages landscapes, and threatens the future success of the Dominican tourism sector.
• Low cost waste and biomass resources likely to vary by project.
• Pilot study uses 8,730 MT/yr of waste and biomass, including:
• Hotel Biomass • Hotel Organic Waste • Hotel Plastic Waste • Hotel Mixed Waste • Nearby Hotel Biomass • Biomass Pellets (there is a small but steady pellet market in
DR)
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Fuel use assumed in pilot study
Electricity purchases restricted to private companies with government concessions. • Power comes from small, inefficient boilers burning diesel,
gas, LGP and fuel oil • Electricity prices range from USD 0.26 to USD 0.43 per kWh High energy prices • Costs of fuels used for heating are in the order of:
– 4.7 USD / USGallon for Diesel – 2.3 USD / USGallon for GLP – 27.5 USD/MMBTU for LNG
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Powered by imported fuels, hotels face high energy prices
