Panama to diversify energy mix with solar and wind power

Like other Central American countries, Panama plans to expand the use of its resources for renewable energies. Following a broad consultation process, the National Energy Plan 2015 – 2050 was approved which aims at increasing the share of renewable energies to 70% of the national energy mix. The plan is based primarily on wind and solar energy. Currently, the main pillars of the Panamanian energy mix are thermal power plants (39%) and hydropower (58%). Due to climatic changes which have led to less predictable rainfalls, hydropower is becoming an increasingly unreliable source of energy. In 2013, for example, Panama suffered a severe energy crisis because of the lack of water. At the same time, the Central American country has a rapidly increasing energy demand, triggered by its booming economy.

According to the Panamanian regulatory body ASEP wind energy accounted for only 1.74% and solar energy for only 0.17% of the energy mix in 2015, but that will change quickly. Concerning the expansion of wind energy, Panama has already made significant progress. On 13th of April 2016, President Juan Carlos Varela inaugurated the wind park “Laudato Si” of the investor UEP Penonomé II, S.A., a subsidiary of Inter Energy Holdings. The wind project Penenomé, which has been developed in different stages, has a total installed capacity of 225 MW. Inter Energy is a Private Equity Fund that since 2011 has been operating the wind projects Quilvio Cabrera and Los Cocos with a total capacity of 86 MW.

Many large scale wind and solar projects with a total capacity of 3.177 MW have received licenses by ASEP. The question is, how many of these projects will finally be built as they more than double the current energy demand? ASEP has stopped granting further licenses and the transmission operator ETESAL is currently analyzing the integration capacity of the Panamanian grid system for wind and solar energy before taking further steps.