Arguing that there is a risk that energy transactions in the region will become more expensive, Guatemalan businessmen are asking the outgoing government to refrain from approving or signing reforms to the Central American Electricity Market Framework Treaty.
Because on January 10 the discussion is programmed within the Director Council of the Regional Electric Market of Central America (CDMER), the subscription of the Third Protocol, which would reform the Framework Treaty of the Electric Market, the private sector of Guatemala has issued an alarm before any change in the regulations, since it could cause increases in the prices of energy transactions or generate negative effects in the Guatemalan market and its interconnection with Mexico.
Average prices for buying and selling on the spot market, quantities by contract and by spot price, amounts of predispatched MWh per hour, per day or for specific periods.
The regulator, Energía de la Autoridad Reguladora de los Servicios Públicos de Costa Rica (ARESEP), has published a comprehensive online information system for the Costa Rican electricity market, with a section dedicated to the Regional Electricity Market.
"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%.
Although they have managed to link the last stretch of 32 kilometers which was missing from the electricity grid in the region, there is still not any regulation to define rates and market performance.
After several delays caused by problems related to easements and environmental claims, the construction and electrical connection of the 32 kilometers that were pending between the canton of Parrita and the district of Palmar in Osa, Costa Rica has been completed.
Four companies who submitted bids with prices between $101.9 and $123.4 per MWh were selected for the power supply for the period 2016-2036.
The winning companies, as reported by Distribuidora de Electricidad DELSUR are: UDP-Neoen Almaval, with a price of 101.9 / MWh and 60 MW of allocated power, Solar Reserve Development Co. II, UDP and UDP Proyecto La Trinidad and with prices of $123.41 / MWh and 20 MW, 8 MW and 6 MW, respectively.
In 2013 63% of the electrical energy fed into the transmission networks in the region was generated from renewable sources.
From a report entitled "Central America: production statistics for the electricity subsector, 2013", prepared by the Economic Commission for Latin America and the Caribbean (ECLAC):
"... The production of electricity in the six countries amounted to 45,735 GWh, 3.3% higher than in 2012.
Generators will be prevented from exporting energy if they dont agree on a price for the country similar to the regional reference electricity price.
An article on Laprensa.hn reports that the new president of Honduras, Juan Orlando Hernández, has said they have still "not reached an agreement with the thermal utilities companies who supply power to the country.
Electricity rates will increase by at least 13%, reported representatives of generating and distribution companies in the country.
The exact increase will be announced on July 12, when the new electricity tariffs, which are currently being studied by the Superintendency of Electricity and Telecommunications, will be defined.
However, according to an article in ElSalvador.com, "Miguel Bolinaga, the vice president of the electricity market and external relations of the AES El Salvador Group, was emphatic in stating that 'electricity bills will increase by 13 percent."
A Fitch report blames high regulatory risk as the main problem for regional private investment in generation and distribution of electricity.
Executive Summary of Fitch´s Special Report on the Power Sector of Central America and the Caribbean:
The electricity sector in Central America and the Caribbean reflects a strong link with regional government’s performance due to socio-economic and regulatory aspects which characterize these countries.
In 2009, 61% of all energy produced in the region came from renewable sources.
ECLAC published its report on electricity consumption and production in Central America, including final statistics for 2009.
-In total, the region produced 39,535.1 GWh, of which 30,384 GWh were sold on the regulated market to 7.9 million customers reporting revenues of $ 4,721 million.
The company, who distributes 80% of the country’s energy, purchased supply for the next two years.
After a public bidding process, the winning companies were Nejapa Power, Duke Energy and Cutuco Energy.
Abraham Bichara, President of AES El Salvador, told newspaper La Prensa Gráfica that “signing these contracts is strategic, as there will be changes in the energy market … we want to reduce costs for consumers and attract more investment to the country”.