Dominican Republic Tourism Sector NAMA Biomass and Waste to Energy Climate mitigation and economic development in the tourism sector Zugeilly Coss

Ignacio Santelices

CNCCMDL

CCAP

Global Methane Initiative Methane Expo 2013 March 13th, 2013 - Vancouver, Canada

CONCEPTUAL

NAMAs in the Climate Compatible Development Plan

Ley 1-2012 Estrategia Nacional de Desarrollo 2030

CCDP Fase II

Stakeholders Participation Tourism Sector

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. • 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. 4

Unmanaged waste disposal is inconsistent with luxury tourism Preferred management solution combines organic waste separation and clean burning of waste to energy

Typical Hotel Punta Cana

Hotel Open Dump 5

Technical assessment results CCAP is currently conducting a study for five hotels in the Eastern region of the island, with approximately 2,700 rooms 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 6

Once proven, using waste and biomass to produce energy is scalable We estimate 15-25 replication opportunities in the island’s hotel sector Dominican Tourist Areas (“poles”) 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

7

Barriers to powering hotels with waste and biomass • 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 8

Possible components of the NAMA • 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 9

Financial schemes for the pilot Project (Biomass and waste to energy) • 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. 10

• 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.

Thank you For more information please visit www.ccap.org

Introduction to the DR tourism sector • 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. • 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. 13

Fuel use assumed in pilot study • 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) 14

Powered by imported fuels, hotels face high energy prices 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 15