The Executive Branch has submitted to the Senate a bill (Bill) introducing amendments to Article 5 of the Renewable Energy Incentive and Special Regimes Law, promulgated on May 7, 2007 (Law 57-07). The main purposes of such amendments are to broaden the type of biomass projects eligible for the benefits contemplated by Law 57-07, and include energy production using Urban Solid Waste (USW) and energy production based on the use of the earth’s internal heat (geothermal) within the scope of Law 57-07, so that these types of projects can also benefit from the incentives contemplated by such law.

Biomass

With respect to generation projects based on biomass, Law 57-07 currently limits such projects to those that do not exceed 80 MW of capacity and have, at least, 60% of biomass, and extends the incentives contemplated therein only to biomass projects aimed at producing electricity without considering, as the Bill states, that heat and steam can also be produced with such primary source of power. Said omission, the Bill states, has a negative impact on the viability of projects that use biomass in general (from a financial point of view), so it is essential to rectify such omission in order to effectively promote investments in projects of this type.

To that end, the Bill contemplates the following amendment to paragraph (e) of Article 5 of Law 57-07:

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Urban Solid Waste

The Bill contemplates the addition of the following paragraph (j) to Article 5 of Law 57-07 (Scope of Application):

“(j) Facilities that produce energy from Urban Solid Waste (USW), of any power level and of any type of technology, such as: incineration for the production of steam and electricity, biomethanation, landfill degasification, plasma generation process, gasification, pyrolysis and thermolysis. The power projects for the production of electricity from Urban Solid Waste (USW) could be developed with cogeneration technology or hybrid with natural gas or another fuel, to the extent the facility produces at least 50% of the energy cycle using Urban Solid Waste (USW) as a primary source of energy.”

Geothermic

The Bill contemplates the addition of the following paragraph (k) to Article 5 of Law 57-07 (Scope of Application):

“(k) Facilities that produce energy based on the use of the earth’s internal heat (geothermal), of any type and of any power level.”