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.
The State of the Region indicates that the asymmetries between the most regulated markets such as Costa Rica and others that are freer such as Guatemala and El Salvador constitute an obstacle to progress of the regional market.
Regional Integration section, the V Report on the State of the Region:
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.
Paying lip service: For the third consecutive year the news is the same, there are still no definitions of the regulations for the Electrical Interconnection System for Central American Countries.
The electricity purchase that AES El Salvador has agreed with Hydro-Xacbal of Guatemala remains elusive.
The Electrical Interconnection System for Central American countries will be a decisive factor in reducing the cost of electricity at the regional level.
According to Ibrán Bueso, a legal advisor for the National Electricity Company (ENEE) in energy, one of the objectives of consolidation of the Electric Interconnection System for Central American Countries (Siepac) is to strengthen the competitiveness of the region by reducing its energy costs.
Mexico and Colombia could be the next countries to be incorporated into the Electrical Interconnection System for Central American Countries.
The issue will be discussed during a three-day meeting which Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica and Panama, countries associated with the Electric Interconnection System for Central American Countries, (Siepac), will have this week.
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
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.
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