Lack of legal certainty, electricity theft and social conflicts are forcing businessmen in Guatemala's energy sector to choose to relocate their investments to El Salvador.
Last year, the companies Applied Energy Services (AES) and Corporación Multi Inversiones (CMI), both US and Guatemalan capital, decided to invest $47 million in solar energy projects, encouraged by the facilities offered to the energy sector in El Salvador.
In 2017, electric energy exports totaled $103 million, 104% more than was sold in 2017, reversing the falls registered in the two previous years.
According to figures from the Banco de Guatemala, over the past year the country sold abroad a monthly average $8.5 million worth of electricity, with the Central American region being the main destination market.
In 2016, the average cost of 1 kWh in Central America was 13.48 cents, while in Costa Rica, it was 18.47 cents.
A report from the CEPAL indicates that in 2016, the average cost of one kilowatt hour (kWh) in Central America was 13.48 cents, while in Costa Rica it was 18.47 cents; 37% more for industrial consumption of 100,000 kWh.In El Salvador and Guatemala, it was 11.03 and 11.54 cents respectively. In Panama, 10.92 cents.
In May, 56% of energy came from renewable sources, of which 72% was from hydroelectric power.
From the Energy Monitor June 2017, by Agexport: Historical Average Monthly Spot Price (US $ / KWh) The behavior of the SPOT Price for the month of May varied with respect to the previous 4 months in 2017, since at the moment it is the lowest that has been reached in the year, standing at 59.52 USD / kWh.This represents a decrease of 8% in relation to the year 2016. According to historical behavior, during the months of May, due to climatic and generation conditions, the monthly price has always been higher than the annual average.
AES and Engie have agreed to create a joint venture to market and sell liquefied natural gas to third parties in Central America.
The new company will use infrastructure of the Costa Norte LNG Terminal, which is currently under construction in Colón, Panama, owned 50/50 by AES and Inversiones Bahia.
The total capacity of Costa Norte LNG Terminal is approximately 1.5 million metric tons per year (mtpa), of which 25% will go to AES Colón's 380 MW combined cycle plant (CCGT), currently under construction at the same site.
It is estimated that in 2025 an average 1 MW ground mounted solar energy system will have an average cost of 73 cents per watt, 36% less than the current cost.
Advances in technology and growing experience in the manufacture of solar energy systems are contributing to the gradual reduction of their cost, giving them an advantage over other sources of power generation, such as fossil fuel.
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)":
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) :
In Costa Rica, 19 projects were selected as "eligible" by the state run power company, but the same institution has ruled out opening new competitions to purchase more wind-generated power.
EDITORIAL
Investment in alternative energy is risky, because it depends on uncontrollable external factors such as unpredictable weather variations, which have particular effects on hydraulics, solar and wind power.
On October 20th and 21st entrepreneurs from the region will gather together in Panama City to discuss issues such as the electricity market rules, new and renewable energy projects.
From a statement issued by the International Symposium on Energy:
This year the 8th. International Symposium on Energy seeks to promote spaces for reflection on energy issues, to help analyze the performance and limitations of developing new projects, build consensus, define the options for the energy market and, finally, develop a social impact using the media.
In Guatemala there is a total of 650 users registered as self-producers of energy made with their own solar panels who upload their surplus to the electricity network.
Ricardo Mendez, commercial manager at Empresa Eléctrica de Guatemala, SA (EEGSA) told Prensalibre.com that "... 'If the energy input is higher than consumption, the balance is saved to be applied on the next bill.'"
Although the installed capacity is currently small, strong growth is projected in the region as a result of tenders with prices that favor large-scale projects.
A report by IHS Technology predicts rapid growth of photovoltaic capacity in Central America, which will supposedly reach 22 megawatts in 2018.
In reading this report, it should be noted that the country experiencing the largest part of that growth is Honduras, where multiple large-scale projects have been announced in which we have not yet seen the required economic viability, which casts serious doubts on their actual realization.
The state run power company estimated that starting May 2015 the cost of electricity will go down from $165 to $109 MW/h, as a result of its energy diversification.
The entry into force of contracts which were awarded in tender processes using the method of successive rounds will create a reduction of up to $56 MW / h, according to Jorge Alonso, manager of Empresa Eléctrica de Guatemala (EEGSA).
With the recently awarded contracts and tenders in process, it is estimated that by 2017 the energy matrix will grow by 52%, with hydropower accounting for 41.3%.
Prensalibre.com reports that "...With the contracts awarded, which are for 15 years, the installed power generation capacity will go from 2,519 megawatts (MW) recorded last May to three 3,836 MW. "
On october 15th and 16th companies from the sector will gather together in Panama City in order to discuss issues such as energy efficiency, technology and the use of renewable energy in the region.
From a statement issued by the Union of Industrialists of Panama:
Panama, September 18, 2014. The Union of Industrialists of Panama (SIP), in light of energy issues and the implementation of new regulations that will reduce the cost of energy, will be holding from 15th to 16th of October 2014, at the Hotel El Panama, the 7th International Symposium on Energy entitled: "Industry, Innovative contributions to the electricity market.