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A Fair Wind for Clean Energy in Central America

Danilo Valladares

GUATEMALA CITY, Apr 19 2011 (IPS) - Soaring international prices for oil and gas are driving the expansion of renewable energies in Central America, a region that has plenty of untapped potential for producing hydroelectricity, wind power and geothermal energy.

“What stands out the most is that all the countries are interested in wind energy, and in continuing to make the most of hydroelectric power, with the development of large scale megaprojects,” José María Blanco, head of the Fundación Red de Energía (BUN-CA), a Costa Rica-based non-governmental organisation, told IPS.

“The region is looking ahead to the completion of the Central American Electrical Interconnection System (SIEPAC)”, which involves putting up 1,800 kilometres of 230-kilovolt transmission lines from Guatemala in the north to Panama in the south, he said.

The SIEPAC project, which has a planned interchange capacity of 300 megawatts, three times the present capacity, and a projected cost of 500 million dollars, is due to come onstream for commercial operation later this year.

In recent weeks, the pockets of Central American consumers have been hurt by constant increases in fuel prices. Gasoline, for instance, has climbed to nearly five dollars a gallon (3.8 litres), and diesel fuel is four dollars a gallon, with the usual knock-on effect on the basic basket of goods, an index of the cost of living.

This scenario has made renewable energies more attractive in the region because of their low environmental impact and lower consumer prices, in contrast with the volatile prices of fossil fuels and the high levels of pollution they cause.

Costa Rica, for example, is building the largest hydroelectric dam in the country on the Reventazón river, close to the town of Siquirres on the Atlantic coast. It will be capable of generating 306.5 megawatts, and will cost 1.2 billion dollars.

In Honduras the British power company Globeleq, together with Mesoamerica Energy, a Central American firm, are working on a 250 million dollar wind park in Cerro de Hula, 24 kilometres south of Tegucigalpa, with a capacity of 102 megawatts.

Roberto Leiva, of the Honduras Business Council for Sustainable Development (BCSD-Honduras), told IPS several hydroelectric plants are under construction or in process of being approved in Honduras. A wind park is also being built, and plans for at least two geothermal facilities are being studied.

Panama, Nicaragua, El Salvador and Guatemala have also embarked on new projects for solar, wind, geothermal and hydroelectric power that will change their energy mix, at present based mainly on oil.

Central America could develop renewable energy sources with a potential capacity of more than 31,000 megawatts, comprising 60 percent hydroelectric power, 30 percent wind power and the remaining 10 percent geothermal energy, BUN-CA studies say.

However, the region is still “highly dependent on imported fossil fuels, which provide 80 percent of total energy consumption,” Blanco said.

Costa Rica is the exception in the region. Over 80 percent of its energy mix is derived from renewable sources, according to the state Costa Rican Institute of Electricity (ICE).

But Dinora Sandino of the Nicaraguan Association for Renewable Energy and the Environment told IPS that, because of high oil prices, “we have seen a marked trend over the last decade towards substitution of fossil fuels with renewable energy sources.”

In 2008, clean energies represented 36 percent of installed capacity within the country’s energy mix, and the aim is for them to grow to 90 percent by 2016, according to the government of leftwing President Daniel Ortega.

To meet this goal, the plan is to generate 600 megawatts, mainly from a geothermal project at San Jacinto-Tizate, in northwestern Nicaragua, and hydroelectric developments at Tumarín, in the eastern province of Atlántico Sur, and Larreynaga and HidroPantasma, in the northern province of Jinotega, according to the Nicaraguan Ministry of Energy and Mines.

“The entry into force of the Electrical Industry Law in 1998 was an incentive for the private sector to participate in the generation of renewable energy and increased state participation in carrying out hydroelectric and geothermal projects,” Sandino said.

El Salvador is not lagging far behind. “The rising price of oil has had a major influence on the development of clean energies, but so has concern for the environment,” Luis Miguel Vázquez of the Japan International Cooperation Agency (JICA) told IPS.

Last year, JICA-El Salvador began drawing up a master plan to develop renewable energies in the country over the next 15 years, including solar photovoltaic technology, concentrated solar thermal power, wind energy, geothermal and hydroelectric power and biomass.

At present, El Salvador depends on fossil fuels for 80 percent of its energy. “This illustrates the pressing need for renewable energies, which at first glance might seem more expensive, but in the long run are affordable and environmentally friendly,” Vázquez said.

Oswaldo García, with the Guatemalan Ministry of Energy and Mines, told IPS that “the trend is to use more renewable energy” due to the high prices of crude, but also because of disasters like the Fukushima nuclear power plant in Japan, caused by the Mar. 11 earthquake and tsunami.

“There is a great deal of international pressure to use environmentally friendly sources of energy, in order to avoid accelerating climate change,” he said.

Guatemala is aiming for an energy mix in 2022 made up of 58 percent hydroelectric power, 37 percent thermoelectric power produced by stations fuelled by coal, natural gas and biomass, 4 percent geothermal energy and only the remaining 0.6 percent based on oil.

This will require heavy investments, since statistics for 2008 indicated that oil generated 46 percent of the country’s energy consumption.

César Barrios of FUNDAECO, a foundation for eco-development and conservation, told IPS renewable energy is a good option in view of the high price of oil and the problem of pollution.

“The difficulty is that companies do not make an effort to empower the local communities in the vicinity of their installations. They should educate local people so that they can participate in the management of the projects, and generate real development in the communities,” he said.

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