The government has ratified contracts with hydroelectric, biomass and geothermal power generators for 450 MW, 70 MW and 40 MW, respectively.
A few days before the entry into force of the new General Law on the Electricity Industry, which prevents Empresa Nacional de Energía Eléctrica from making contracts without using a tender process, the Board of Directors of the company has approved the purchase of 560 MW.
Raising electricity rates is one of the measures the government is planning in order to improve public finances in the context of a negotiation for a new agreement with the IMF.
The National Association of Industrialists (ANDI) expressed concern about the effect that a possible increase in electricity rates could have on the competitiveness of the sector and called for the need to address the impact of the crisis in the National Electricity Company (ENEE) on state finances in a different way.
The delay in the full implementation of the new General Law on the Electricity Industry could cripple projects based on renewable resources up to 475 MW.
An article in Laprensa.hn reports that the new General Law on the Electricity Industry will enter into force on 4 July, and that from that date, "... a transition period starts in which the National Energy Company Eléctrica (ENEE) ceases to be a state monopoly in the generation, transmission and distribution of power, provision of street lighting and charging for electric services. "
The recently passed amendment to the law defines as a priority the use and import of raw materials for the production of biofuels and provides a new price for electricity generated from forest biomass.
LAW FOR THE PRODUCTION AND CONSUMPTION OF BIOFUEL
"ARTICLE 12 -. Raw materials and biomass for biofuel production and domestic biofuels have priority for use over imported raw materials, biomass or biofuels in market conditions.
With the investment in two new turbines the plant 's lifespan has been lengthened and annual production increased by an additional 26 GWh.
In addition to reducing the high costs of maintenance, the repowering of the hydroelectric station aims to gradually increase its ability to reach a production of 80 GWh per year, with surpluses being sold to the state at a lower price than at present, generating savings of $2.90 million a year.
The new law creates investment opportunities in clean energy estimated at $1 billion for the next 4 years.
The new law "allows for the liberalization of the energy sector, modifying the scope of the National Electricity Company (ENEE), an institution that is the target of government creditors having operated with a deficit for the last four years."
After two failed attempts, the National Electric Power Company (Empresa Nacional De Energía Eléctrica) will launch a tender to repair cracks in the El Cajon hydroelectric station.
This new competition will be international because there aren't any companies in the country with sufficient experience to perform the repair work with responsibility, as required by law.
Drastic changes shown by the new government in the way it manages energy contracts will culminate in an international tender.
The government of Juan Orlando Hernandez is preparing the groundwork for an international tender for the purchase of energy for supply within two years.
"If the government wants to achieve independence from energy from thermal plants, it will have to launch in the next few days a call for a public international tender which could take 10 to 12 months, under normal conditions, in order to contract this energy at lower prices than the current ones."
Added to the two Guatemalan generators that are already sending energy to Honduras, are two others who have already submitted bids.
Another two Guatemala companies submitted bids to supply power to Empresa Nacional de Energía Eléctrica de Honduras. These are the generator San Jose, which operates a plant based on coal, and Santa Lucia which uses bunker fuel.
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.
As of March 3rd the energy supply will come from companies in Guatemala.
Honduran authorities have denied the announcement made by Grupo Luz y Fuerza de San Lorenzo (Lufussa) regarding an alleged agreement between the two companies. The Government is continuing with its objective of obtaining competitive prices for the supply of energy, and although it has not broken the negotiation, the offer submitted by Lufussa has not been accepted.
Renewable energy producers are complaining of indifference on the part of the National Electric Power Company, which has still not signed the supply contracts.
The National Electricity Company (ENEE) is indifferent as to the approval of contracts for renewable energy supply, explained a representative of the sector, Elsia Paz.
" ... We have not seen a willingness on the part of the ENEE to accelerate the process of signing contracts for renewable energy, if it is true, they can not give us a solution overnight as they do with thermal generators, we provide price stability and avoid capital flight."
The state lacks the funds needed to keep power plants operating.
The way some of the country's hydroelectric plants have been handled has led to an increase in rumors about a possible "informal" privatization of Empresa Nacional de Energía Eléctrica (ENEE).
"The case is illustrated by an agreement that the former manager of Enee Roberto Martinez signed with the company PHP, which allowed PHP to generate four to six megawatts in parallel with the state run power station El Níspero, which has a plant that generates 22.5 megawatts."
The Multilateral Investment Guarantee Agency has provided a guarantee of $82.4 million for a 24 MW expansion in the Cerro de Hula wind farm.
The institution of the World Bank Group which offers insurance against political risks and credit enhancement mechanisms, has provided a guarantee of investment to support the expansion of 24 MW at the Cerro de Hula wind farm, which has an existing capacity of 102 MW.