Insurance coverage, tax incentives and drilling costs shared between private businesses and governments are some of the proposals put forward for exploiting geothermal potential in Central America.
A global study by the World Bank analyzes the reasons why it has not been possible to take full advantage of geothermal energy in Latin America, highlighting countries such as Costa Rica, Nicaragua, Argentina and Chile, whose potential to generate energy through this renewable source has still not been fully exploited, mainly because of the high risks involved in geothermal projects in their early stages.
Of the 34,629 GWh generated in 2015 by the countries included in SICA, 68% came from hydropower, 11% from cogeneration in sugar mills, 11% was geothermal, 9% wind and 0.1% based on biogas.
From a report by Cepal entitled "Statistics of electricity production by countries in the Central American Integration System (SICA)":
Companies in the sector are proposing taking advantage of surplus energy and developing more generating capacity in order to become large exporters.
The proposal put forward by the Chamber of Energy (CEN) is to use the geological characteristics of the country to exploit energy generated from renewable sources such as solar, biomass and water.The President of the CEN explained that they suggested to the government that discussion be started so that Nicaragua"... can be a 'powerhouse' for exporting electricity, importing plants and occupying the regional market."
The International Finance Corporation will provide $150 million for the construction of a project to construct an electricity generation plant based on natural gas in the province of Colón.
This new loan is in addition to the syndicated loan in which Banistmo, Bancolombia, Banco Centroamericano de Integración Económica Banco General and Global Bank, announced in May 2016.
Conflicts over land use and environmental legal actions have kept fourteen hydroelectric power generation projects paralyzed.
Of the fourteen hydroelectric projects on hold, according to the Association of Renewable Energy Generators (Ager), six were suspended for having been declared unconstitutional, two are in the "dialogue process", one is waiting for a ruling from the Constitutional Court and another " ...
A bill proposes renewing renewable energy generation contracts automatically rather than calling new tenders.
The proposal to reform the General Electricity Industry Act, in force since 2014, claims that"... renewable energy contracts remain in force, but do not benefit from the incentive payment of 10% of the base price and annual adjustment for inflation", as established by current legislation."
A cooperative and a private company are negotiating a $500 million finance deal to cultivate 120 hectares of coyol and install five oil processing plants to produce biofuel.
The plan was devised by the cooperative Coopeciagro RL, and according to its CEO, Luis Fernando Escalante, they already have identified 60,000 hectares in the north and another 60 thousand in Guanacaste."...The plan requires an estimated $500 million in financing, which will be raised from European pension and investment funds and the signing of which only depends on an initial guarantee $600,000, according those promoting the project."
The payment of $0.03 per kW/h promised to solar generators a year ago has still not materialized, despite the fact that 12 plants are already operating in the country and others are in the processes of obtaining permits to start construction.
The fact that the incentives to increase the installation of power plants based on solar energy has not been made concrete affects not only the companies that own the plants, but also the banks who have been funding such projects since last year, because in many cases, "... the incentive scheme was part of the income submitted when applying for funding."
A tender has been launched in El Salvador for the supply, for a period of 20 years starting from 2019, of 170 MW of power to be produced by non-conventional renewable technology.
The tender is for 170 MW of power generated exclusively from non-conventional renewable resources (solar and wind) and includes a contract for a period of 20 years starting from 2019.
The 380 MW natural gas plant to be built by AES in Panama promises to change the country's energy matrix, and the way energy is generated and distributed in Central America.
The economic flow that has already started with the construction of the gas plant in the province of Colon will be felt not only in the energy sector in Panama, which could become an energy generating and distribution hub in the region, but also in other productive sectors that will benefit from greater stability in energy costs and generate greater dynamism in logistics and shipping.
The IIC has structured financing of the first commercial solar plant in El Salvador owned by the French company Neoen SAS of the Louis Dreyfus Group.
From a statement issued by the IDB:
IIC finances the first solar photovoltaic power plant in El Salvador
The Inter-American Investment Corporation (IIC), acting on behalf of the Inter-American Development Bank (IDB), has joined forces with Providencia Solar SA to finance the construction of the first photovoltaic power plant on a commercial scale in El Salvador.
According to the CNEE the current available power will be able to supply the market for more than 15 years, even in a scenario with increasing demand, therefore it is not recommending new tenders in the short term.
The 'Conclusions' section of the document "Indicative Plans for Generation and Transmission 2016" by the National Electric Energy Commission (CNEE by its initials in Spanish) :
Of the 28 requests for permits to generate electricity for self consumption submitted to the regulatory body, 27 correspond to generation using solar sources.
Sixteen out of the twenty eight applications submitted to the Regulatory Authority for Public Services (Aresep) were from the state run Compania Nacional de Fuerza y Luz, "... for a total requested power of 112.84 kW, all using solar power."
Consideration is being given to removing the ceiling of 500 kW in installed capacity for solar power plants producing energy for self consumption.
The proposal by the Public Services Authority (ASEP) emerged as a result of the public consultation which was carried out on the rules to generate solar power for self consumption by households and businesses.