The Road to Renewable Energy

The energy crisis that hit México and Central America in May 2013 not only affected crops and access to water, but also confirmed the vulnerability of this region that relies on hydroelectric energy. A continued search for renewable sources makes innovation imperative.

By: Sofía Kalormakis de Kosmas
Photos: Javier Pinzón


In May 2013, fifteen Latin American journalists gathered at a restaurant in Washington, D.C. to exchange notes on a science and innovation workshop. The friendly dinner was abruptly interrupted by an announcement: México and Central America were officially in crisis. México announced the death of 1.3 million cattle; Nicaragua warned that their beans were “still on the ground”; and energy bills were skyrocketing in Panama due to an increase in the use of thermal energy when rain refused to fall over major hydroelectric reservoirs. 

Media in each country reported on the devastation the drought was able to cause in just a few weeks: dead livestock, crop failures, brown-outs, water shortages and, consequently, closures of schools, offices, and businesses lasting more than a week in order to save energy. Experts claimed that the increase in evaporation associated with higher temperatures had affected water availability. According to the Intergovernmental Panel on Climate Change (IPCC) and the United Nations Program for Environment (UNEP), regional temperatures have risen by 0.5 °C over the past three decades. If this trend continues and global temperatures rise more than 2 °C (as forecasted by the IPCC), the region will suffer even greater economic, social, and environmental losses. 

“The Economics of Climate Change in Central America,” a study published in 2010 by the Economic Commission for Latin America and the Caribbean (ECLAC), warns of energy vulnerability in this region in which 45% of the energy matrix’s total power generation comes from hydroelectric plants. Furthermore, the report emphasizes the need to implement a strategy to counter the effects of shortages of water needed to produce food and electricity. 

According to Julie Lennox, the specialist in charge of the study, countries must create long-term strategies that will allow water to be stored during periods of heavy rains. “Corn and beans are agriculture’s greatest sources of concern. If farmers continue to plant like they have in the past, they’re in for big losses,” explained the expert, adding that part of the challenge in Central America will be in breaking polluting trends and stopping the importation of hydrocarbons, replacing them with renewable energy sources. 

“The increased demand for renewable energy technologies is due mainly to the huge potential for reducing greenhouse gases (GHG), which correlate with increased energy consumption,” said Natalia Young, Environmental Specialist at the Panamanian Association of Business Executives (APEDE). “In addition to their potential to mitigate climate change, an energy matrix based on local renewable sources promotes access to energy, improves energy security, and reduces the negative impacts of fossil fuels on human health and the environment,” she added. 

And so, although hydroelectric power is renewable in that it uses waterpower to generate energy, hydroelectric mega-projects can have very negative social and environmental impacts and therefore, some experts don’t consider them a sustainable option. However, small-scale hydroelectric plants, which don’t require large dams, can be sustainable and help generate power without negative effects.

Innovation in Times of Need 

Although the road to complete independence from fossil fuels is long, necessity forces us to seek innovation in energy production and Central America is apparently on the right path. This was demonstrated during the 22nd Regional Forum hosted by the Energy and Environment Partnership with Central America (EEP) being held in Panama at the time this issue was published. The Alliance is part of the Central American Integration System (SICA). 

Experts in the field of renewable energy rank Central America among world leaders, with the potential to meet 100% of its electricity needs through renewable sources like wind power, water, sunlight, and geothermal energy. The latter accounts for nearly 10% of the energy matrix, while biomass and wind account for about 8%. Costa Rica is the leader in hydroelectricity, with about 70% of electricity produced locally. El Salvador is the region’s largest generator, with 25% geothermal production. 

There are still challenges to overcome in natural resource management. According to AEA figures, although 62% of Central America’s power comes from renewable sources and only 38% from petroleum derivatives, seven million people in the region have no electricity and about half of the population still cooks with firewood. 

The AEA has provided seed capital for 280 small-scale renewable energy projects in Central American communities, focusing on solar and hydropower in particular, and initiatives that promote efficient use of firewood for cooking and water for agriculture. Twenty-five million dollars of this capital comes from Finnish cooperation agencies. Currently, Nicaragua is the leader in developing projects (59), followed by Guatemala (44), El Salvador (36), Costa Rica (27), Panama (24), Honduras (23), Belize (17), and Dominican Republic (13).

The demand for renewable energy is a growing trend worldwide, with a total global investment of 244 billion dollars. Developing countries have invested more than 112 billion dollars according to the “Global Trends in Renewable Energy Investment 2013” report published by UNEP and the Frankfurt School of Business. 

China is in the lead, consolidating its position as the dominant player in the global market, with a 22% share, due largely to an increase in solar energy investments. Solid growth was also noted in countries like South Africa, Morocco, and Kenya, while the Middle East and Africa showed the highest rates of regional growth: 228%. 

Brazil leads Latin America with investments totaling 6.2 billion dollars in wind farms, small hydroelectric plants, and biomass. México is next, with a long list of wind projects and one geothermal project that began in 2009, when the government announced its plan to increase its power capacity from 3.3% to 7.6% by 2012. In Chile, where the goal is to increase renewable energy production 10% by 2025, the focus is on small hydroelectric, wind, and biomass projects, increasing the country’s investment in this sector to 21%, investing close to 960 million dollars. 

By establishing a legally binding commitment to ensure 8% of energy comes from renewable sources by 2016, renewable energy investments in Argentina have skyrocketed by 568%, for a total investment of 740 million dollars. And in Perú, where the government announced its goal to increase its renewable energy generation capacity by 5% by 2013, investment doubled to 480 million dollars, including small hydroelectric, biomass, and ethanol plants. 

“2012 was a record year for global deployment of renewable energy, and it is very encouraging to see that 138 countries around the world have set goals and established policies about renewable energy,” said Achim Steiner, UNEP Executive Director. “There are, however, those who still believe that renewable energy technologies only serve to supplement the established electricity system,” added Steiner.

Despite the encouraging outlook, climate change could also affect both the expanse and geographic distribution of potential sources of renewable energy. “This may seem contradictory, but there is a clear need to diversify energy sources and not depend on a single predominant renewable energy technology. It is also important to implement new strategies to encourage adaptation to climate variability, make investments, and find technological solutions to reduce energy vulnerability, seeking long-term arrangements for more efficient administration and use of natural resources,” concluded Young.