It has been estimated that $200 million need to be invested in Central American countries to strengthen the transmission capacity of the regional electricity market.
A study prepared at the request of the Wholesale Market Manager of Guatemala (AMM) details that for the regional market to operate in a comprehensive way, countries must invest more in order to improve transmission capacity.According to Edgar Navarro, president of the AMM, this investment should be concentrated in Nicaragua, Honduras, El Salvador and Costa Rica.
Negotiations have started to evaluate alternatives for integrating the Mexican electricity market into Siepac.
Salvador Lopez, temporary president of the Electric Interconnection System for Central American Countries (SIEPAC) told Prensalibre.com that in the meeting they will start to assess the legal mechanisms that could be used to realize the integration.
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.
Solutions have been found to the problems of easement and complaints from environmentalists, and the Electrical Interconnection System for Central America will be complete in its entirety in July.
The works on the last stretch of 32 km of the Electric Interconnection System for Central America (SIEPAC) in Costa Rica are 80% finished, after having suffered delays due to complaints about environmental damage and legal claims.
Guatemala is the most interested country in speeding up regulation establishing the model of firm contracts within the regional electricity market.
This was explained by Guatemalan Vice Minister of energy, Edwin Rodas.
The idea of this is to harness the Electrical Interconnection System for Central America (Siepac) not only for the sale of energy to other countries, but also to provide telecommunications services over optical fibers which these lines have.
On June 1 the Regional Electricity Market Rules and the Supplementary Detailed Procedure Electrical Interconnection System for Central America became effective.
"It's a big step forward for electrical integration. These are rules designed to operate the SIEPAC line and power transmission capacity between countries with greater intensity," said the executive director of the Regional Operating Agency (EOR), Rene Gonzalez.
Countries involved in the Mesoamerica Project will create an Efficient Illumination Strategy in Central America, to reduce the use of incandescent lamps.
From the website of the Mesoamerica Project:
Countries launch strategy to promote efficient lighting in Central America
The countries involved in the Mesoamerica Project have officially launched the start of activities to create an Efficient Lighting Strategy in Central America, with the goal of promoting policies and practices aimed at reducing the use of incandescent bulbs and advance the transition to efficient lighting (low energy consumption) in Central America.
A regional legal framework is required that will allow for long-term contracts, not only between countries but also between plants located in one country selling power to another.
Central America’s electrical integration requires not only enabling the Electrical Interconnection System but also an appropriate regional framework.
With the current drive seen in several Central American countries to develop power generation projects, it is essential to look beyond national perspectives and visualize the possibilities for optimization of available resources and complementation of the energy matrices of the region.
Central America’s energy matrix contains an increased amount of hydrocarbon based generation, while the regional interconnection promises to reduce costs through economies of scale.
In the past two decades Central America has not been too successful in achieving sufficient electricity generation with a stable supply at competitive prices.
The regional matrix generation has changed from 66% hydroelectric, 30% thermal, and 4% renewable in 1990, to 41% hydroelectric, 47% thermal and 13% renewable in 2008.
Works on the Central American Electricity Interconnection System (SIEPAC in Spanish) are reported to be 95% complete, and are expected to be operational in March 2012.
At a cost of $490 million, the interconnection line extends from Guatemala to Panamá, with capacity to transport between 200 and 300 megawatts of electricity.
Teófilo De La Torre, president of the company that owns the network (EPR), stated that "the project will reduce the cost of electricity in the region due to the ability to make sales to other countries, including outside of the region, because Central America became connected with Mexico last year”, reported Notimex.
The project is 90% complete, and will end with the construction of the last 150 km of power transmission lines.
Jose Enrique Martinez, general manager of the company that owns the network (EPR) pointed out that the sections that are most behind are those covering the Costa Rican territory, due to problems created by theft of power cables.
He added to Elmundo.com.sv, "We are in the final phase of this project (...) we expect to complete the bulk of the project this year and finish it completely in the second half of 2012."
Interconnecting Mexico, Central America and Colombia is no easy task, and the Darien obstacle is one of the largest.
More than 40 indigenous groups are connected to the Panamanian territory, and discussions and consultations are being conducted with them seeking authorization for the project feasibility studies. The power line between Panama and Colombia could pass through the territories of the Kuna, or if not, alongside of the Embera and Wounaan groups, on land or in the Darien.
The electricity sector's authorities have put together a series of concrete actions that should make the regional market a reality by the end of 2011.
During the meeting organized by the Inter-American Development Bank (IDB) in San Jose, Costa Rica, energy ministers, electrical power generating organizations and regulators from across Central America reaffirmed their commitment to speeding up the process of harmonizing the region's legal frameworks in order to bring about energy integration.
This is the date by when Central American countries propose to have completed the regional power grid.
By the end of next August the link-up of Costa Rica and Panama is expected to be finished and by October that of Guatemala with El Salvador, says Enrique Martínez, general manager of the Central American proprietary power grid company (EPR in Spanish).
The region aims to standardize its energy laws and regulations, to make it easier to develop renewable energies.
Edgar Chamorro, executive director of SICA (Central American Integration Secretary), explained the initiative at the “XV Regional Forum of Central America’s Energy and Environment Alliance”.
He explained “that a Standardization Commission at Sica is working to harmonize regulations related to importing air conditioning devices, refrigerators, washing machines, televisions, home appliances and low energy transportation units”.