Island electricity systems in the Caribbean are characterized by high fuel import dependency, limited economies of scale, infrastructure vulnerability, and elevated generation costs. This paper presents a quantitative cost–benefit analysis of a proposed 700 MW voltage source converter high-voltage direct current (VSC-HVDC) submarine interconnection between the Dominican Republic (DR) and Puerto Rico (PR) over a 160 km route, incorporating the integration of fiber-optic telecommunications infrastructure under a joint public–private partnership (PPP) model. A comparative expansion-planning framework evaluates three scenarios: independent development, HVDC with localized generation in PR, and HVDC with generation expansion in DR exporting to PR. The deterministic discounted cash flow (DCF) model includes capital expenditures, fuel cost differentials, reserve sharing, avoided capacity investments, renewable integration value, and reliability monetization. Results indicate near-breakeven economics under conservative assumptions. When integrated fiber-optic revenues and diversified PPP structuring are incorporated, the project achieves positive net present value (NPV) and improved bankability. The findings demonstrate that coordinated energy–digital infrastructure deployment enhances economic viability, system resilience, and regional integration potential for Caribbean island systems. Some benefits of the interconnection between the Dominican Republic and Puerto Rico are: (1) Immediate generation of economy of scale through reserves reduction, in terms of auxiliary or peak plants and emergency centrals, and more efficient operation of electrical systems; (2) Optimal use of each countrys natural resources through abundant, safe, and renewable electricity generation; (3) Increased investment in clean energy and financial support from multilateral financing banks; (4) Greater foreign exchange earnings for countries from energy sales in various electricity markets; and (5) Possibility of future interconnection with existing regional markets, such as the Electrical Interconnection System of the Countries of Central America and integration into its Regional Electrical Market.
Francisco Nunez-Ramirez (Sat,) studied this question.