The Dominican Republic is preparing two new tenders that could mobilize around 500 MW linked to renewable generation and battery storage systems , after the first tender with mandatory BESS concluded with an award lower than the expected volume.
“Both calls for proposals will generate great expectation in the Renewable Energy sector, but their success will depend largely on what business contract model the authorities present to them,” said Rafael Velazco Espaillat, senior consultant, in conversation with Energía Estratégica .
The next cycle includes the contracting of approximately 300 MW of renewable energy capacity that was left pending and a specific process to incorporate 200 MW of BESS (Basic Energy Storage System) into existing solar parks . Although a specific date has not yet been set, the consultant estimated that both calls for tenders, or at least their publication, could take place this year.
The specialist identified the contract as the key element in determining the attractiveness of the projects. The structure must provide predictability regarding revenue, adequately distribute risks, and compensate for the limitations that the regulatory framework for batteries still presents.
This issue will be particularly relevant in the tender process for incorporating storage into operational solar installations. In these cases, developers will need to make new investments in existing assets, while the recovery of capital will depend on the services recognized and remunerated by the electricity system.
Velazco Espaillat warned that the remuneration gap in the current regulations for BESS remains considerable , so the contractual design must take into account the economic particularities of this technology.
Energy storage allows energy to be shifted to times of higher demand and provides essential auxiliary services for grid stability , including frequency regulation, voltage support, ramp control, and operating reserves.
However, the current economic framework does not fully recognize these benefits. According to the consultant, available income is primarily concentrated in the price difference between loading and unloading times.
“ Let us remember that today, for kWh served by BESS in the SENI, only arbitrage revenues are allowed ,” he explained.
In addition, there is a limited additional remuneration when the batteries provide complementary services to the National Interconnected Electric System (SENI).
“And a low premium when compared to current international standards, when these kWh are for auxiliary services to the Grid,” Velazco Espaillat specified.
The lack of differentiated payments based on capacity, flexibility, and operational support can complicate the financial structuring of projects. For this reason, the sector expects future agreements to reduce investors' exposure to insufficient regulated remuneration.
“ Its success will depend on the contract model for the kWh of batteries supplied to the grid, so that these can be attractive to private investment ,” the consultant said.
The terms and conditions must define what services the batteries will provide, how their availability will be measured, and what revenue they will receive for each function . A scheme limited to remunerating discharged energy would not reflect the systemic value of energy storage.
In contrast, the incorporation of payments for availability, firm power and ancillary services would allow for diversification of revenue streams and improve the bankability of the initiatives.
Velazco Espaillat considered that the contracts could temporarily compensate for the regulatory gaps, until the current framework fully incorporates the different features of the technology.
In that regard, he argued that the risk of insufficient remuneration for the kWh supplied by BESS to SENI, as well as potential exposure to dumping, should be compensated within the contracts themselves .
For the 200 MW of storage planned in existing and operational solar parks , the consultant pointed out the use of financial contracts as an alternative, without them necessarily having to be physical, at least until the transmission networks are expanded and the pending new lines are built.
A first tender with a significant oversupply
The EDES-LPI-01-2025 International Public Tender confirmed a paradigm shift in the Dominican market by requiring BESS systems as a mandatory condition for contracting new renewable generation.
The process received proposals for approximately 1655 MWp against a demand of 600 MW , reflecting a marked oversupply and high interest from local and international developers.
Velazco Espaillat gave a positive assessment of the event from the point of view of participation, although he took as a reference the nominal capacity of the initiatives presented.
“We understand that it was a successful process from the point of view of the number of offers received, some 21 in total, which represented approximately 1,301 MW,” he said.
According to the consultant, the number of proposals demonstrated that the market favorably received a competitive procedure in which storage played a central role.
“This indicates that it had a good level of acceptance and credibility among market players, both local and international,” he added.
Finally, 325.69 MW of new renewable capacity were awarded, along with BESS systems equivalent to 50% of the contracted power. The remaining volume was not allocated because some bids exceeded the reference price.
Following the award, the Electricity Distribution Companies moved forward with formalizing the power purchase agreements, consolidating the entry of a new generation of renewable energy plants with storage.
The call positioned the Dominican Republic among the first Latin American markets to establish batteries as a mandatory requirement within a competitive procedure for contracting renewable generation.
The economic outcome, however, generated different interpretations among the participants. Velazco Espaillat acknowledged that prices did not reach the levels expected by some developers, nor were they particularly competitive compared to markets of a similar size.
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“ I believe one aspect worth highlighting is that the prices achieved, while not those expected by some participants, were not highly competitive in market terms compared to similarly sized markets such as Central America ,” he stated.
Nevertheless, the conditions may have been favorable for the winning bidders who are also considering investments in other Latin American countries.
The specialist attributed the values achieved to the technological maturity of the industry and the particular characteristics of the Dominican electricity market .
He also pointed out the existing concentration among the main players developing large-scale renewable energy projects to inject energy into the grid, in addition to the lag in updating payments for ancillary services.
“ I understand that the technological maturity of the industry and the conditions of our market are the most weighted reasons in this case ,” Velazco Espaillat stated.
Transmission and planning for the next rounds
The first call also yielded lessons related to the capacity of the electrical infrastructure to integrate new projects.
The volume tendered must be related to the actual availability of the transmission system , especially in areas that concentrate greater solar resources and interconnection requests.
Velazco Espaillat believed that more precise planning would prevent subsequent modifications to the processes and provide greater certainty to the participants.
“ It is about having a better and more accurate estimate of the MW capacity to be summoned versus the integration capacity of the Transmission System of said MW at that time to avoid the always annoying corrections ,” he remarked.
The warning takes on added relevance in light of the growth of solar power generation, which demands new lines, substation expansions, and resources capable of responding quickly to variations in production.
In this context, BESS can reduce ramps, shift surplus energy to peak demand hours, and provide operational flexibility. Even so, storage does not replace the investments required in transmission.
The next calls for tenders must be coordinated with the availability of connection points and with the expansion plans of the Dominican Electricity Transmission Company.
Companies that could compete again
In addition to the five projects selected in the first tender, other initiatives met similar technical and economic conditions, but did not obtain contracts.
Velazco Espaillat identified at least three additional projects that could return in the next rounds, along with new international players interested in the Dominican market.
“ There were three others in particular that, with similar technical and even economic conditions, could not be awarded for some of the reasons I have indicated above ,” he explained.
The consultant predicted that these companies would maintain their interest, especially if the new terms offer clarity on storage remuneration and the capacity available to connect to the network.
“ But they will undoubtedly participate, along with international players familiar with our market, in an upcoming event that the authorities have said they will hold in the near future ,” he anticipated.
The oversupply recorded in EDES-LPI-01-2025 indicates that there is a sufficient portfolio to sustain competition. However, the number of actual participants will depend on the reference price, the required guarantees, the development timelines, and the risk allocation stipulated in the contracts.
Regulatory advances and reliability of the SENI
The Dominican Republic made progress in 2026 in developing a specific framework for energy storage. The Superintendency of Electricity approved technical requirements related to the design, operation, safety, and connection of BESS systems.
In parallel, the authorities are working on broader regulations to recognize the different services that batteries can provide within the National Interconnected System (SENI).
The country also updated regulations related to distributed generation and tightened requirements for approving new solar and wind projects, with the aim of strengthening planning and reducing integration risks.
Likewise, the Dominican Electricity Transmission Company initiated a process of institutional transformation, while the Government promoted a manifestation of interest to develop up to 1200 MWh of storage through private investment .
These advances expand opportunities for BESS, although technical regulation will need to be complemented by economic signals capable of supporting long-term investment decisions .
The debate gained greater relevance after the nationwide blackout affecting the National Interconnected System (SENI) following a failure at the Punta Catalina power plant. The event brought grid resilience, energy mix diversification, and the incorporation of rapid response resources back to the forefront.
Batteries can contribute to system recovery, frequency regulation, and mitigating the impact of outages. However, these functions require clearly defined technical protocols, dispatch rules, and payment mechanisms.
The upcoming tenders will be a test of the country's ability to convert initial interest into bankable and operational projects.
The Dominican Republic has already confirmed investor appetite for renewable energy generation with storage. The next challenge will be to develop an economic model that remunerates the true value of energy storage systems, coordinates their deployment with transmission infrastructure, and offers sustainable contracts.
“ Which, by all accounts, will need to be reviewed and updated in the near future ,” Velazco Espaillat concluded.