The Regional Electricity Market

Analysis of the current state of the SIEPAC project and business opportunities in the region especially in electricity generation.

Friday, August 8, 2014

The Regional Electricity Market (MER by its initials in Spanish) is not only a key element to the growth and economic development of Central America, but also an important source of business opportunities for companies.

"The MER is at the moment a seventh market, which has its own regulation and physical structure, operating in coordination with the six existing local markets," says Leslie Jennifer in her article in Estrategiaynegocios.net.

"...The MER represents an attractive investment opportunity in various activities in the electricity subsector, especially in generation, offering a higher level of legal certainty to investors, thereby decreasing the risk associated with investments in facilities which require substantial capital in order to be executed."

"...Allowing international transactions offers a chance to meet increased demand, especially in countries in the region where the rate of electrification is not able to be increased because of limited local supply. This new demand would generate more competition among market players, integrating new generation, which in the medium and long term, it is expected to promote a reduction in the price of electricity for the entire region. "




More on this topic

Electricity Integration Requires More Infrastructure

February 2016

Transmission lines in the regional SIEPAC system are being used to distribute electricity internally in countries, curtailing their capacity for international exchange of energy.

When the US President Barack Obama visited Central America in 2013, he warned that "energy costs in this region are three times what electricity costs in Washington, and that represents a huge disadvantage for companies".Two years before that, all countries, from Guatemala to Panama, were committed to creating the necessary infrastructure for the Regional Electricity Market (MER) to be efficient.

Panama: Hub For Electricity As Well

June 2015

Planned investments in the electricity transmission grid and interconnections with its neighbors could position Panama as a regional power distribution center.

Added to the construction of the third transmission line, estimated at $300 million-and whose works are 49% complete according to an announcement in May by the Electricity Transmission Company - comes a fourth line, to be built on the Atlantic area of the country.

The Electricity That Central America Needs

June 2015

"The region still needs to install at least 7,000 MW by the end of the decade and make investments of between $12,000 million and $18,000 million."

While in Panama the energy supply needed to meet the demand of its growing economy falls short, to the north of the region, in Guatemala, there is surplus energy but generators are unable to sell it due to the lack of regulations governing the futures contracts and because the Siepac (Regional Electricity Transmission System) project is still does not working 100%.

Colombia's Interest in Energy Sector in Central America

June 2014

Hydroelectric projects and expansion of distribution networks are part of the opportunities that Colombian Power firms are looking to take advantage of in the Isthmus.

There are now three Colombian energy sector companies that have decided to venture into Central America to be part of the development of an activity that still has much room for growth in the region.

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