Electricity: Businessmen Ask for Better Prices

In a context of health emergencies and falling oil prices, Nicaraguan businessmen are asking the government to take advantage of market conditions and reduce electricity rates by 15 to 20%.

Wednesday, April 22, 2020

For the Superior Council of Private Enterprise (Cosep), the advantage of buying and storing oil derivatives for electricity generation as soon as possible should be evaluated, and thus taking advantage of the historical lows in the prices of these products.

You may be interested in "Energy Sector: Outlook for the Region"

Because of the power purchase contracts signed with generators in other countries, the drop in local electricity rates could not be done immediately, according to experts in the field.

Fernando Bárcenas, an electrical engineer, told Laprensa.com.ni that the Nicaraguan government made purchase contracts with "... Panama and Guatemala, where electricity costs are lower than in the country. In fact, they are the countries with the lowest rates, but the problem is that there are contracts with established prices."

According to Javier Mejía, of the Humboldt Center, "... it is important to consider that not all of the energy matrix is thermal, since half is from renewable sources and the other half from fossil fuels. This season is when there is more generation from wind and biomass, so thermal energy does not have as much weight in the costs."

According to CentralAmericaData reports, if quarantine and mobility restriction measures are extended for two months, it is predicted that by the end of the year the annualized demand for electricity generation, transmission and distribution in Central America will have fallen 4%.

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Nicaragua: Electricity Rates to be Reduced

March 2015

The Ortega administration has attended to the demands of the real estate sector and sent to the Assembly a bill to lower electricity rates for consumers of more than 150 KW.

Finally the Nicaraguan government has responded to the request made by the Superior Council of Private Enterprise (COSEP) and sent to the National Assembly regarding a bill which establishes a reduction in the electricity rates for residential and other sectors that consume more than 150 KW.

High Electricity Costs in Nicaragua

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Droughts have increased the power grid's dependence on energy generated by oil derivatives.

Another factor pushing up the cost of electricity are recent increases in the prices of both bunker fuel and diesel.

Cosep, the Private Enterprises Council, is worried by these increases in energy prices, which directly affect production costs at companies.

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