Caribbean & Central America - October 2018

Environmental organisations have long warned that Central America’s growing reliance on imported fossil fuels comes at the price of rising greenhouse gas emissions, worsening air and water pollution, and significant health and societal costs. Greater investment in renewable energy sources would reduce this growing dependence on fossil fuels, boost national and regional energy security, and reduce the impact of climate change, which scientists predict will have a particularly strong impact on Central American and Caribbean states, argues the Worldwatch Institute, a Washington-based environmental research organisation. However, access to funding in a region hampered by chronic fiscal problems continues to obstruct the development of such projects.

Central America continues to be dangerously dependent on imported fossil fuels. According to a 2013 Worldwatch Institute report titled ‘The way forward for renewable energy in Central America’ (the only regional report on renewable energy published to date), in 2010, the region’s petroleum imports totalled US$13.3bn, just under 8% of the region’s GDP. Imported fossil fuels account for 45% of primary energy use and 70% of secondary energy use in Central America, says the Worldwatch Institute. As well as reducing dependency, replacing fossil fuels with renewables would boost national and regional energy security and help the region to cut down on greenhouse gas emissions.

“Central America is at a crossroads. As the economies of Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama expand, regional use of fossil fuels for transportation and electricity generation is on the rise, while the use of fuelwood, primarily for cooking, continues to be unsustainably high. These developments come at the price of rising greenhouse emissions, worsening air and water pollution, and significant health and societal costs,” warns the Worldwatch Institute. The good news, it says, is that Central America has the potential to meet 100% of its electricity needs with renewable energy “provided that the proper policies, incentives and political support are in place”.

Large hydropower, one of the least expensive sources of electricity when considered over its entire life cycle, has been Central America’s preferred source of renewable energy and represents 48.9% of the energy fed into the region’s energy grid. Central America has installed just below 5,000MW of hydropower, representing 42% of total installed electricity capacity. The region generates an estimated 20,000 gigawatt-hours of hydropower annually and has an estimated hydropower potential of 22,000MW, meaning that some 17,000MW remains to be exploited.

The key advantages of hydropower are that after relatively high upfront costs (primarily for dam and reservoir construction), hydropower has fewer recurring expenses, such as rising fuel costs, than fossil fuel-based energy and that it is a reliable source of baseload power that can be ramped up or down on demand, which means it can complement other energy sources. However, the large-scale damming of rivers can have significant social and environmental impacts including large-scale population displacement, loss of cultural landmarks, biodiversity loss through flooding of land ecosystems and disruption of aquatic ecosystems, as well as greenhouse gas emissions from land use change.

Guatemala currently has 30 hydropower plants, of which 19 are involved in conflicts with the surrounding communities, mostly in the departments of Alta Verapaz, Huehuetenango and Petén, according to Madreselva, a local environmental organisation. In Honduras, a conflict between the Lenca indigenous community and a hydropower plant run by Desarrollos Energeticos (DESA) resulted in the murder of prominent environmental activist Berta Cáceres, in March 2016.

The use of geothermal energy in Central America, the cleanest baseload source of renewable energy due to its extremely low greenhouse gas emissions, dates back to the 1970s and currently accounts for 7.5% of the energy fed into the region’s energy grid, according to the Worldwatch Institute. Costa Rica, El Salvador, Guatemala, and Nicaragua have geothermal power plants with a combined capacity of 558.6MW. In El Salvador, geothermal accounts for nearly a quarter of electricity generation, ranking the country second in the world (after Iceland) in geothermal’s share of overall electricity production, while Costa Rica and Nicaragua are sixth and eighth in the world, at 12.4% and 9%, respectively.

Wind, which only represents 1.7% of the region’s energy grid, has been used to produce power in Central America since the 1990s. Major projects in Costa Rica include: La Gloria (49.5MW of capacity), Plantas Eólicas Sociedad de Responsabilidad Limitada (PESRL) and Tilaran (23MW each), Eolico Valle Central and Valle Central (15.3MW each), Tejona (19.8MW), and Coopesantos (13MW). Nicaragua has three major projects: Amayo (63MW), San Martin (39.6MW), and Eolo (40MW). Honduras has the 102MW Cerro de Hula project and in May 2015 Guatemala inaugurated its first wind project: San Antonio El Sitio (48MW).

According to the Solar and Wind Energy Resource Assessment (SWERA), a United Nations Environment Program (UNEP) project, there’s room for growth since Central America has 12,969km² with good-to-excellent wind resource potential, representing 3.3% of the region’s total land area. However, the development of wind power in Central America has been hampered by challenges such as inadequate roads to carry large blades, towers and generators to remote locations where wind is abundant, the need to build costly transmission lines to bring the power to consumers, and the lack of zoning laws and clear land rights. And wind power projects in Mexico’s Isthmus of Tehuantepec have proven to be as great a source of social conflict as hydropower. Residents of Juchitán de Zaragoza, a mainly indigenous Zapotec city, who complain wind power farms have left them with rashes and coughs and depleted groundwater, have blocked plans to build one of Latin America’s biggest wind farms close to the city (see below).

In terms of solar power, the region’s two major projects are Costa Rica’s Parque Solar Miravalles (2012) and Nicaragua’s La Trinidad (February 2013). Biomass such as wood, charcoal, and agricultural residues, accounts for 38% of energy use in Central America. Traditional biomass, used for cooking in the home, represents 82% of the region’s primary energy consumption, compared with 37% in Latin America as a whole. Within Central America, Guatemala has the highest use of biomass, with nearly three-quarters of households relying on fuelwood for cooking. Ethanol dominates Central America’s biofuel industry – El Salvador and Guatemala are the two largest producers – due to the high amount of sugarcane produced in the region. The downside is biofuels have been blamed for rising food prices, increasing deforestation, and establishing monoculture – the planting of a single crop across many hectares. In Honduras, in particular, troops in the heavily militarised Bajo Aguán region have been accused of murdering, disappearing, and intimidating peasant farmers involved in land disputes with local palm oil magnates.

Despite Central America’s potential as a renewable energy producer, efforts to diversify energy sources continue to be hampered by financial constraints. “With renewable energy you have to pay a lot of money upfront but further down the line you don’t have to pay for fuel. This is a challenge for economies with fiscal problems such as the Central American economies, which lack the necessary capital to invest in this type of technology,” says José Lara, an academic at US Berkeley University’s Energy and Resources Group (see sidebar).

• Disruption

José Lara, an academic at US Berkeley University’s Energy and Resources Group, warns wind power projects can be just as disruptive to local communities as more controversial energy sources such as hydropower, if communities are not adequately consulted. “Hydropower is not more likely to cause problems with local communities, it’s perceived as being conflictive because it is the renewable energy source that has been most widely developed in the region. The problem is not the type of technology used but rather the imposition of large-scale projects on communities. Mexico is an example of wind power projects that have been badly managed in terms of the impact on the community and the environment,” says Lara.