Last week, Panama hosted the XXII Energy and Environment Partnership (EEP) Central American Regional Forum, an event designed to present examples of EEP-funded projects that show productive uses of energy in the Central America region.
Created in 2002 during the United Nations World Summit on Sustainable Development in Johannesburg, South Africa, the EEP aims to contribute to sustainable development and climate change mitigation in Central America through the promotion of renewable energy. The effort is supported by Finland’s Ministry of Foreign Affairs, in coordination with the Central American Integration System and the Central American Environment and Development Commission, and by the Austrian Development Cooperation.
Over the last decade, the EEP has supported more than 280 projects in Central America with a total of €13.9 million, 80 percent of which was used exclusively for project funding. At the recent Forum, Dr. Salvador Rivas, regional coordinator of the EEP, summarized the projects implemented to date and noted that the EEP’s strategy model is grounded on four pillars: pilot projects, energy and environmental policy, capacity building, and market development.
Geographically, the EEP’s Central America projects are relatively evenly distributed, with the majority awarded to Nicaragua and Guatemala. By technology, most projects rely on solar photovoltaic (PV) and small hydroelectric systems, with a smaller number using biogas, biomass, biofuel, wind, and concentrated solar technologies, among others. Notable examples included concentrated solar fruit dryers in Guatemala, biogas production from a pineapple factory in Costa Rica, solar water pumping for salt production in Panama, a solar PV drip irrigation system for a flower and vegetable farm in Nicaragua, and a solar oven for wood drying in El Salvador.
After Dr. Rivas’s presentation, Worldwatch President Emeritus Christopher Flavin made the case for renewable energy in Central America, referring often to the recent Worldwatch report The Way Forward for Renewable Energy in Central America, which was distributed to all participants in Spanish. Describing the rising global use of renewable energy and its unparalleled growth, Flavin made clear that the time for renewables, especially wind and solar, is here. He noted that Central America is already a leader in this area, given its high shares of renewables in the electricity sector—up to 91 percent in Costa Rica—due mainly to large amounts of hydropower. Nevertheless, the region is poised to increase its share of other renewables, such as wind and solar, because “this is a resource basis that is quite larger than fossil fuel resources.”
Flavin also compared the average annual solar radiation of major cities in Central America to that of Berlin and Washington, D.C., noting that the cost to produce solar power in Central America is much cheaper than in those cities, and thus competitive with current fossil fuels. He concluded with four key recommendations for the region: (1) develop a sustained renewable energy market and ensure that the appropriate policy framework is in place; (2) conduct an assessment of local renewable resources, including evaluating the current electricity grid and future growth plans as well as localized costs and returns for both centralized and decentralized energy sources; (3) offer appropriate financing methods to overcome the obstacle of high upfront costs, and emphasize the lower lifetime costs of renewable over fossil fuel generation; and (4) ensure integrated and long-term planning for sustainable development.
Other keynote presenters included: Rebeca Ramirez from the Panamanian National Energy Secretary, who spoke about Panama’s renewable energy policy; Israel Torres from the Panamanian National Environment Authority, who discussed Panama’s climate change mitigation strategy; Jefferson Toyama from the International Center of Renewable Energies-Biogas, who described the Itaipu Hydroelectric Project, on the border between Brazil and Paraguay, and associated renewable energy projects; Marina Stadthage of Network of Women Entrepreneurs of Nicaragua, who explored women’s role in energy and climate change; Heidi Deman from the Regional Program of Food and Nutritional Security, who addressed the cultural and socioeconomic impacts of firewood use for cooking; and Carlos Boj from the Central American Bank for Economic Integration, who presented on financing “green” small and medium-sized enterprises. The forum also featured three panels profiling examples of EEP renewable energy projects.
The event illustrated clearly that the efforts of the EEP and other relevant institutions are having a positive impact on the development of renewable energy in Central America. The numerous pilot projects have served as proofs of concept for integrating renewable technologies into various industries, providing them not only with cleaner sources of energy, but also with future economic savings. In addition, many of the projects have benefited communities that lack access to electricity, through the support of local organizations working on rural electrification and green cookstoves. These efforts have been paired with capacity building initiatives in hydroelectric power, solar PV, solar water heating, and biogas systems. In addition, many Central American countries are taking strides in renewable energy policy and fiscal incentives.
Even with these concrete efforts, however, regional obstacles to the widespread use of renewable energy technologies remain. Financing institutions continue to assess renewable energy projects as very risky, and project developers, businesses, and the wider public often are unaware of or do not completely understand the policies that are in place. Meanwhile, the social and economic benefits of renewable energy in a region that is dominated by high fossil fuel prices have not been clearly communicated, and there remains a lack of technical capacity for non-conventional renewable energy sources and grid integration of renewables.
Over the next 10 years, with support from the EEP and other innovative funding sources, it is hoped that Central American governments will focus on overcoming these obstacles and truly spark widespread renewable energy development in the region.