Globally, new investment in renewable energy fell 11 percent in 2012. But in Latin America and the Caribbean (not including Brazil), it grew at a remarkable rate of 127 percent, totaling US$4.6 billion. This was the opening context for the 3rd Annual Renewable Energy Finance Forum for Latin America and the Caribbean (REFF-LAC), held this week in Miami, Florida. The yearly event, coordinated by Euromoney Energy Events, the American Council on Renewable Energy (ACORE) and the Latin America and Caribbean Council on Renewable Energy (LAC-CORE), aims to connect developers and investors who can continue fostering the strong investment climate for renewables that is happening in the region.
LAC-CORE president, Carlos St. James, speaking at the 3rd Annual REFF-LAC conference. (Photo credit: Mark Konold)
Presenters included project developers, financiers, and government officials, all of whom had experiences to share about what’s working in the region. In some places, like Chile and Peru, project tendering is working to advance renewable energy deployment. In the Caribbean, mechanisms such as net metering and feed-in tariffs are still the preferred approach to fostering renewables development. Many presenters stressed that the key to continued success in the region is the political will that creates an environment conducive to successful renewable energy investment. They also highlighted how projects become more attractive the less they have to rely on subsidies or other support mechanisms.
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Caribbean, Central America, developing countries, energy, energy efficiency, energy security, finance, renewable energy, renewable energy finance, sustainable development
By Cinthya Alfaro Zúñiga
As a native Costa Rican and Worldwatch Institute/INCAE Research Fellow, I was excited to attend the Energy and Environment Partnership’s (EEP) 21st Regional Forum in my home country earlier this month. EEP’s primary objective is providing finance for renewable energy projects, but it also seeks to build capacity by exploring diverse topics such as different energy technologies, policies needed for successful implementation, and regional obstacles and opportunities through stakeholder dialogues.
Worldwatch and INCAE presented Phase 1 of "The Way Forward for Renewable Energy in Central America" in Costa Rica in March.
Under the title “Biogas and Energy Efficiency in Central America,” the most recent Forum convened a group of 200 experts, project developers, governmental representatives, financiers, and the general public. The speakers addressed topics such as the contribution of energy efficiency policies and renewable energy toward carbon emissions reductions. Other important themes included the status of biogas and energy efficiency in Central America, as well as a run-through of EEP energy efficiency and biogas projects in the region.
The three-day event featured speakers from the German Cooperation Agency (GIZ), the Costa Rican Electricity Institute (ICE), the Economic Commission for Latin America and the Caribbean (ECLAC), the Central American Bank for Economic Integration (CABEI), and the Worldwatch Institute, among others.
On behalf of Worldwatch, President Emeritus Christopher Flavin presented on the global status of renewable energy and Climate & Energy Director Alexander Ochs summarized the results from the first phase of the Worldwatch/INCAE project, “The Way Forward for Renewable Energy in Central America,” which applies the Institute’s sustainable energy roadmap methodology to the region. Dr. Ana María Majano, Associate Director of the INCAE Business School’s Latin American Center for Competitiveness and Sustainable Development (CLACDS), joined Ochs as the lead in-country implementation partner.
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Central America, development, electricity, emissions reductions, energy, energy efficiency, energy policy, renewable energy, sustainable development
During the last two decades, the global installed capacity for geothermal electricity has nearly doubled. Despite this recent expansion, geothermal energy is not getting the same level of attention as other renewable energy resources, and it remains heavily underutilized. If the world were able to tap just a small portion of the Earth’s heat, we could provide everyone with clean and safe energy for centuries. Current estimates of our global potential for geothermal energy range from 35 gigawatts (GW) to 2,000 GW. However, simple technological improvements could greatly increase these projections.
For example, a Massachusetts Institute of Technology (MIT) study concluded that if the United States were to invest US$1 billion in geothermal research and development over the next 15 years, the country could increase its generating capacity by 100 GW by 2050. Currently, the United States is the world leader in installed capacity, but it still produces only about 3 GW of geothermal energy. Encouragingly, the same MIT study estimated that, with the proper technical improvements, 2,000 zettajoules (1 ZJ=1021 joules) of geothermal energy would be extractable in the future. This is equivalent to the estimated energy contained in the world’s petroleum reserves as of 2010. Recognizing this vast potential, some countries are finally taking action to tap into this clean energy source.
Central America, in particular, is progressing quickly as several countries begin to develop previously untouched geothermal resources. Central America is located within the Pacific Ring of Fire, a volcanically active region that has excellent potential for geothermal electricity. Estimates for the geothermal potential of the region are as high as 13,000 megawatts (MW). However, the region is harnessing only 506 MW of this energy and is still heavily dependent on expensive imported fossil fuels.
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Central America, development, El Salvador, geothermal, renewable energy
Despite its small size and population, Belize is one of the most culturally, ethnically, and linguistically diverse countries in Central America. As a member of the Caribbean Community (CARICOM) as well as the Central American Integration System (SICA), it is the only Central American country with strong ties to both the Caribbean and Latin America. In the initial phase of our project in the region, the Worldwatch Institute is assessing the existing barriers to and opportunities for a socially, environmentally, and economically sustainable energy system in Belize—an outcome that could connect these two neighboring yet culturally distinct communities and provide tangible benefits to both.
Source: Public Utilities Commission of Belize
With a population of only 350,000 and a national economy of US$1.5 billion in 2011, Belize does not consume large amounts of energy. Peak electricity demand in 2010 was 80.6 megawatts (MW), well below the U.S. state of Vermont’s peak energy demand of 953 MW in 2011. Belize’s low energy consumption makes it a suitable location for further development of clean, indigenous energy sources.
Currently, Belize depends heavily on foreign energy sources. In 2010, the country imported more than a third of its electricity from the Mexican power provider, Comisión Federal de Electricidad. In addition, Belize spent approximately $129 million, or 18.2 percent of its total import expenditures, on imported fuels. Not only has this raised energy prices for consumers, but if Belize continues to rely largely on imports to meet its energy demand, it will be highly susceptible to fluctuations on the international market. The Belizean government must explore other, local energy resources to strengthen and stabilize the country’s energy sector.
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Belize, Caribbean, Central America, developing countries, development, energy, low-carbon, renewable energy, sustainable development
Esta es la traducción del blog “Worldwatch and INCAE Host Renewable Energy Working Group in Costa Rica” publicado anteriormente en reVOLT. Para leer el original en inglés hacer click aquí.
This is the translation of the previous blog “Worldwatch and INCAE Host Renewable Energy Working Group in Costa Rica.” For the original English version, click here.
A principios de este mes, el equipo de Centroamérica del Worldwatch Institute – junto con nuestros socios de INCAE Business School – llevaron a cabo un taller con más de 30 expertos y tomadores de decisiones en el campus del INCAE Business School en Alajuela, Costa Rica. Participaron expertos en energía renovable de la región, incluyendo expertos de El Salvador, Panamá, Nicaragua y Costa Rica. El taller fue organizado y co-dirigido por Alexander Ochs, Director de Clima y Energía del Worldwatch Institute y por Ana María Majano, Directora Asociada del Centro Latinoamericano para la Competitividad y Desarrollo Sostenible (CLACDS) de INCAE. La actividad se llevó a cabo en un formato de discusión de mesa redonda que brindó a los participantes la oportunidad de presentar, responder e involucrarse por medio de pequeños grupos de trabajo. Algunos de los temas tratados fueron cómo replicar casos de éxito de renovables y cómo superar barreras que están impidiendo la expansión del uso de energía limpia en la región. La actividad logró que nuestra investigación y potencial de impacto llegara a un nivel superior.
Ana María Majano, Asesora Principal del Proyecto y Directora Asociada del Centro Latinoamericano para la Competitividad y Desarrollo Sostenible (CLACDS) de INCAE
Los gobiernos centroamericanos han expresado su apoyo a las renovables al fijar objetivos ambiciosos en todos los sectores de usuarios finales – electricidad, calefacción y enfriamiento, y transporte. Este apoyo gubernamental para las renovables fue evidenciado por la presentación de la Directora de Energía del gobierno costarricense Gloria Villa, en dónde se recalcaba dicho apoyo por parte del MINAET. Sin embargo la administración efectiva y gobernabilidad de políticas se mantiene como una significante barrera. Jay Gallegos, Gerente General de una de las compañías eólicas más grandes en la región, Globeleq Mesoamerica Energy, advirtió que para avanzar un proyecto eólico hasta el final su compañía tiene que presupuestar un 10% adicional a los costos del proyecto para manejar “incidentes” – es decir, costos administrativos no planeados y aproximadamente 80,000 horas-trabajo adicionales.
Jorge Vásquez de la Unidad de Coordinación Energética del Sistema de la Integración Centroamericana (UCE-SICA), así como administradores de fondos de inversión en energía renovable como E+Co Capital y Flex Energy Group/Private Financing Advisory Network también discutieron las barreras que la región afronta.
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Central America, renewable energy
Esta es la traducción del blog “Moving Renewable Energy Forward in Nicaragua” publicado anteriormente en reVOLT. Para leer el original en inglés hacer click aquí.
This is the translation of the previous blog “Moving Renewable Energy Forward in Nicaragua.” For the original English version, click here.
La semana pasada, el equipo de Centroamérica del Worldwatch Institute – junto con nuestros socios de INCAE Business School – reunimos a un grupo de trabajo de cerca de 40 expertos en energía renovable en Managua, Nicaragua. El taller, cuyo tema principal fue “El acceso a la energía en comunidades de bajos recursos a través de iniciativas sostenibles” contó con la destacada participación y ponencias de representantes del Ministerio de Energía y Minas de Nicaragua, de la Asociación de Renovables de Nicaragua, del desarrollador de proyectos eólicos más importante de la región, así como de una serie de iniciativas energéticas en zonas rurales. El grupo de trabajo analizó la investigación y metodología del Worldwatch Institute así como nuestro impacto a la hora de incrementar la participación de las renovables en la matriz energética de la región.
Los participantes del taller “El Futuro de la Energía Renovable en Nicaragua” en el campus de INCAE Business School, en Managua, Nicaragua.
El Director del Programa de Clima y Energía del Worldwatch, Alexander Ochs, se dirigió a los participantes del evento recordándoles que el objetivo principal de nuestros esfuerzos no es simplemente promover las diferentes tecnologías energéticas renovables por sí mismas – si bien estas discusiones pueden quedarse estancadas en detalles técnicos – sino los resultados ambientales, sociales y económicos que conlleva la energía limpia y localmente generada. La energía renovable es un medio para alcanzar prioridades políticas de ámbito general: dar acceso a fuentes modernas de energía, mitigación de la contaminación local y el cambio climático, y abordar cuestiones importantes de salud, educación y género. En una región donde los países dedican de un 5 al 15 por ciento de su PIB para la importación de combustibles fósiles, los cuales conllevan costos sociales, ambientales y económicos adicionales, la producción de energía renovable local es un requisito para su desarrollo económico sostenible.
Los objetivos de nuestro taller fueron reunir a un grupo de líderes de la política, industria y comunitarios con el fin de analizar los conocimientos y actividades existentes en la región en torno a las energías renovables, así como la identificación de lagunas en materia de capacidad y la necesidad de reformas políticas y administrativas. Estos objetivos se lograron mediante una serie de ponencias seguidas de un diálogo abierto e interacciones entre los participantes. El taller fue organizado en dos sesiones plenarias y cuatro grupos de discusión.
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Central America, development, energy, renewable energy
Earlier this month, the Worldwatch Institute’s Central America team – based in Washington, DC and Costa Rica – convened a workshop with over 35 renewable energy experts and decision-makers on the campus of the INCAE Business School in Alajuela, Costa Rica. Renewable energy experts from around the region, including experts from El Salvador, Panama, Nicaragua and Costa Rica, were in attendance. The workshop was co-hosted by Alexander Ochs, Worldwatch Director of Climate & Energy, and Ana María Majano, Associate Director of the Latin American Center for Competitiveness and Sustainable Development (CLACDS). The event consisted of a distinctive round table discussion format that gave participants the opportunity to present, respond and get involved through small break-out groups. Questions were addressed regarding how to replicate renewable energy successes and overcome barriers preventing clean energy expansion in the region. The event took our research and potential for impact to a new level.
Senior Project Adviser and Associate Director of CLACDS, Dr. Ana María Majano
Central American governments have been vocal about their support for renewables by setting ambitious targets pertaining to all end user sectors – electricity, heating and cooling, and transportation. Such government support for renewables was evidenced by the presentation from the Costa Rican government’ director of energy, Gloria Villa, regarding the legacy of support for renewables by the MINAET. But the effective administration and governance of such policies remains a significant barrier. Jay Gallegos, the general manager of one of the largest wind companies in the region, Globeleq Mesoamerica Energy, warned that in bringing a wind project to fruition his company has to budget an additional 10 percent of overall project costs to handle ‘incidentals’ – that is, unplanned administrative costs and roughly 80,000 additional people hours.
Also discussing and addressing barriers was Jorge Vasquez of the Central American Integration System’s Energy Coordination Unit (USE-SICA), as well as major renewable energy investment funds such as E+Co Capital and Flex Energy Group/Private Financing Advisory Network.
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Central America, Costa Rica, development, energy, energy policy, renewable energy
Para una versión en español de este blog, por favor hacer click aquí.
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.
Participants from the workshop The Way Forward for Renewable Energy in Nicaragua at INCAE Business School Campus in Managua, Nicaragua.
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.
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Central America, development, energy, renewable energy
Wind turbines in Brazil (Source: Daniel Spillere Andrade, Flickr Creative Commons)
In 2011, electricity generation in Panama comprised 55 percent hydropower plants and 45 percent thermal plants. Although hydropower represents more than half of the total installed capacity, high oil prices, along with high electricity prices and a nearly 7 percent increase in electricity consumption last year, are laying the ground for other technologies to enter the market.
Recently, government support pushed forward new regulation favoring renewables, putting the country on the fast track to attract new renewable energy investments. In April 2011, Panama enacted Law 44, which aims to diversify the country’s energy matrix by promoting wind power. The law mandates “wind-only” long-term power purchase tenders, recommending contracts for up to 15 years to ensure developers a constant revenue stream while delivering a stable stream of renewable electricity to retailers. Law 44 also provides fiscal incentives (mainly tax and import tariff deductions and accelerated depreciation of equipment used to produce wind power), making the development of wind projects more competitive in the energy market. In addition the Law holds the state-owned transmission company, Empresa de Transmisión Eléctrica, S.A (ETESA), responsible for organizing the “wind-only” tenders.
Panama has previously gained ample experience in carrying out long-term power auctions. However, successful auctions have not been achieved without setbacks. In the early 2000s, after a five-year period in which ETESA managed power tenders, distribution companies conducted their own power tenders following rules and regulations established by the government. This process created a number of inefficiencies, resulting in a lack of new investment and new installed capacity, as well as high electricity prices between 2004 and 2007. This situation prompted new rules aimed at establishing minimum levels of contracting in the future, long-term contracts, and the adoption of clear, stable, and standardized power-purchasing processes. Under the new procedures, ETESA resumed organizing the centralized procurement of power on behalf of energy distributors (after consulting on their power needs), and contracts are now signed directly between generators and distributors.
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Central America, energy, Law 44, Panama, power auction, renewable energy, tenders, wind power
In our research on the status of renewable energy in Central America, we’ve run into an issue of semantics that has potentially wide-reaching consequences for the region. The hang-up comes with the term ‘renewable’ and which energy sources, exactly, it includes. On the surface, the definition seems obvious: renewable energy is inexhaustible energy derived from consistently shining or blowing or flowing sources—very unlike non-renewable energy, of which we have finite stocks that we are quickly moving from their subterranean homes to the atmosphere.
However, when it comes to hydropower, definitions get a bit more complicated. In theory, hydro is renewable energy in that water used to generate electricity is not ‘used up’ in the way that gas or coal is. But the actual history of hydro energy development has been one of restraining some of the world’s mightiest rivers—North America’s Colorado, China’s Yangtze, and South America’s Paraná—behind dams. According to the World Commission on Dams, 60 percent of the world’s rivers have been dammed or diverted; a process that has cost on the order of $2 trillion, displaced between 40 and 80 million people, and reduced many rivers to a trickle before they could reach the sea. In this sense, most dams actually do deplete water stocks flowing to downstream users and ecosystems—bringing into question the idea of hydropower as ‘renewable’ energy.
Source: Probe International | At 7.3 MW, the Chalillo Dam on the Macal River in Belize would be considered “small” hydro. But you don’t need much more than this photo to understand that even “small” hydro’s role in renewable energy strategies should be questioned.
So we’ve had to build a new, more nuanced vocabulary. Small hydro is often used to delineate sustainable hydro, but even the definition of small is elusive. India considers installations under 25 MW to be small, and the United States draws the line at 30 MW (as noted in REN21’s Global Status Report). In their Climatescope 2012 report, Bloomberg New Energy Finance considers small hydro to be anything less than 50 MW. The United Nation’s Clean Development Mechanism classifies ‘small hydro’ as less than 15 MW and micro hydro as under 5 MW. Another category, pico hydro, typically refers to installations of 5 kW or less.
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Central America, energy, hydro power, renewable energy
