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Last week, the Worldwatch Institute’s Central America team – together with our partners from the INCAE Business School – convened a working group of nearly 40 renewable energy experts and decision-makers in Managua, Nicaragua. The emphasis: access to energy for marginalized communities through sustainable energy options. With presentations and participation from the government’s renewable energy office, Nicaragua’s renewable energy association, an array of rural energy initiatives, and the region’s largest wind power developer, the working group took our research and potential for impact to a new level.
Worldwatch Director of Climate & Energy, Alexander Ochs, incited the round table forum to recall that the overarching goal of our efforts is not to promote renewable energy technology for its own sake– as so often the discussion can remain caught in technical details – but for the environmental, social and economic outcomes that clean and locally-generated energy provides. Renewable energy is a means to reach overarching policy priorities: giving access to modern energy sources, mitigating local pollution and climate change, and addressing important gender, health, and education issues. In a region where countries ship 5 to 15 percent of their GDP overseas for the import of fossil fuels-the use of which produces high additional social, environmental and economic costs- harvesting domestic renewable energy sources is a prerequisite for sustained economic growth.
The objectives of our workshop were to assemble a group of policy, industry, and community leaders in order to gauge the degree of existing knowledge and activity on renewables, as well as to identify capacity gaps and the need for political and administrative reform. This was accomplished by appointing speakers to address the forum, who were then followed by designated respondents, to create open interaction and dialogue. The work was organized in two plenary sessions and 4 break-out groups.
Dr. Ana María Majano, co-host of the event and Associate Director of the Latin American Center for Competitiveness and Sustainable Development (CLACDS) at the INCAE Business School, moderated a diverse group of presenters from various renewable energy walks of life. Presenters included representatives from the solar company Suni Solar and the clean cookstove group Empresa Cocinas MI FOGON, who reiterated the connection between sustainable energy projects and socio-economic development in Nicaragua. The country currently has the lowest electrification rate in Central America at about 72 percent, but Nicaragua has made enormous progress in recent years to address the issue. In grid-connected areas that experienced day-long black-outs as recently as eight years ago, electricity supply is now relatively stable. Douglas Gonzalez of Suni Solar spoke to the company’s experience installing small decentralized solar PV systems in Nicaragua. Representing a utility-scale wind developer, Globeleq Mesoamerica Energy’s Sean Porter spoke to the administrative difficulties his company had to tackle in the construction of the new 45 MW Eolo wind farm in the country.
The interactive, discussion-based break-out groups identified key political, regulatory, administrative, and financial barriers to scaling up renewables in Nicaragua—and how to move those barriers out of the way. All participants used the opportunity to contribute to finding solutions based on prepared questions and supported by a facilitator that guided the group’s discussion and presented findings to the larger forum.
In addition to identifying barriers, last week’s workshop in Managua, Nicaragua highlighted past successes in the country in order to gain insight on renewable energy ‘enablers,’ or frameworks, policies and measures that facilitate renewable energy development. Vice Minister of Energy and Mines, Lorena Lanza, spoke to a number of Nicaragua’s rural electrification projects, such as the off-grid Rural Electrification Program (PERZA), a program that electrified 6,863 homes through distributed solar between 2003 and 2011 (when the funding concluded). Bloomberg New Energy Finance’s Climatescope report recently recognized Nicaragua’s green microfinance sector as the strongest in Central America—good news for distributed renewable energy vendors, installers, and consumers. Overall, Nicaragua, which is the lowest-income country in the Western hemisphere after Haiti, ranked second in Climatescope’s ranking for climate investment in Latin America, trailing only behind the much larger economy of Brazil.This is an enormous testimony to the country’s achievement in terms of political and administrative reform.
Nicaragua’s National Development Plan (PNDH) calls for 94 percent of the country’s electricity to be sourced from renewables by 2017. These are ambitious plans indeed given that in 2011, Nicaragua had the region’s highest use of fossil fuels in electricity generation at 67 percent. However, Nicaragua has the second largest share of non-hydro renewables with 21 percent, due to geothermal plants such as Polaris and Momotombo, the Amayo wind farm, and others. Against this background, the group was divided on whether the 80 percent renewables goal is a realistic one, given the availability of funding and the current investment environment.
Currently, there are 87 MW of geothermal in operation in the country, but according to the World Bank’s Energy Sector Management Program (ESMAP), Nicaragua has an estimated geothermal resource of 1200 MW—more than the total installed capacity in 2011 (1,094 MW) and the strongest potential in the entire region. Solar, wind, biomass, waste-to-energy, and small hydro potentials are also enormous, although detailed assessments of these resources have still to be made. Renewable energy development in Nicaragua will depend on breaking down barriers and fortifying enablers within the political-administrative framework, and on the availability and implementation of necessary funds. Our workshop was an exciting step in this direction.
We have been amazed by the amount of leadership on renewable energy in the region and we are extremely grateful for the high-quality contributions of our workshop participants. Through this consultation, we have identified key areas where reform is needed to further establish Nicaragua as a worldwide renewable energy leader. In the coming months, we will continue to report on our conclusions from the workshops and the Way Forward for Renewable Energy in Central America.
Please see our project webpage for further workshop information including access to presentations as well as photos from the workshop and video interviews with renewable energy experts in Nicaragua.
We are thankful for the generous support of the Climate Development Knowledge Network and the Energy and Environment Partnership with Central America.