Economic evaluation of decarbonizing the electricity sector in the Dominican Republic

Abstract

This paper presents an in-depth analysis of decarbonizing the electricity sector in the Dominican Republic, pivotal for addressing climate change and fostering economic growth. Employing the robust-decision making methodology, we studied multiple scenarios via computational models, capturing inputs from stakeholders and evaluating each scenario across 1,000 futures to capture deep uncertainty. Four scenarios were examined: baseline, reference, natural gas, and renewable. The renewable scenario emerged as the most advantageous, proposing the replacement of coal-fired power generation with renewable sources, primarily solar and wind, coupled with batteries. A significant investment, averaging US$3.3 billion, is necessary for this shift toward renewable energy; however, these investments are overcompensated by savings in operational costs. Crucially, this transition promises substantial benefits by 2050: an estimated cumulative average net economic gain of US$2.7 billion, an 8% reduction in average generation costs in 2050, the creation of 160,000 direct jobs, and the avoidance of circa 140 million tons of CO2. The findings underscore the feasibility and economic viability of transitioning to a 55% renewable energy generation by 2050. The study offers a critical roadmap for policymakers, highlighting renewable energy expansion, transmission grid strengthening, and strategic coal generation replacement, thus offering a comprehensive blueprint for the nation's energy transition.