I have found a lot on the technical side, but hardly anything on the social sciences/politics/political economy of this issue.
A complete picture on the use of renewable energy sources for electricity generation in Central America can be found in my book entitled Energy in Latin American and the Caribbean: The Current and Future Role of Renewables and Nuclear Energy Sources in the Regional Electricity Generation; ISBN: 978-1-62257-980-8; Nova Science Publisher Inc.; 2013.
This is the introduction of the book
NTRODUCTION
Preparation of a book which has as an objective to ensure the survival of humankind is certainly a complex one. Providing stable and secure supplies of energy is a great challenge for governments seeking to achieve sustainable development goals, since the main energy sources providing economic growth and social development are present in the Earth only in limited quantities and in specific locations.
Energy is, undoubtedly, an important element in the struggle of any country to alleviate poverty, promote economic growth and foster social development. But as the world consumes more and more energy, stress is placed on current level of energy reserves and the impact on the environment at national, regional, and international levels.
The world should work together to safeguard the environment without slowing socioeconomic development. Third World countries should look for adequate technological solutions in order to change present unsustainable patterns of consumption and production in developed countries.
The present book has nine Chapters and complements my other book entitled “Energy in the Latin American and the Caribbean: “The Current and Future Role of Conventional Energy in the Regional Electricity Generation”, published in 2012. The present book covers the current debate about the use of different energy sources for the generation of electricity, and provides some ideas and suggestions that can be used by interested government during the preparation of their national energy policies and strategy.
Chapter I includes updated information about the current situation and the future role of all available renewable and nuclear energy sources for the generation of electricity in the Latin American and the Caribbean region during the coming decades. Renewable energy sources are the third largest contributor to global electricity production in the 2000’s. They accounted for around 17% of the world’s electricity production in 2004, after coal (40%), natural gas (19%), nuclear energy (16%), oil (7%) and non-renewable waste (1%). In 2009, the use of different renewable energy sources was responsible for 19.1% of the world’s electricity generation; this represents an increase of 2.1% during the past five years.
There are six different types of renewable energy sources currently used for the generation of electricity in almost all countries. Hydro power is the main renewable energy source with 84.3% of the total output in 2009 (3 810.3 TWh); wind power reached second place for the first time with 7% of the total (268.2 TWh); biomass was third with 6.3% of the total (241.2 TWh); geothermal energy was fourth with 1.7% of the total (65 TWh); solar energy is number five with 0.6% of the total (21.4 TWh), with the other renewable energy sources contributing only 0.01% of the total (0.524 TWh).
Chapter II describes the current situation and future role of hydro power. This is the world’s second most important source of energy for the generation of electricity and one of the three main sources used for this specific purpose. The other two are fossil fuels and nuclear energy. Of all renewable energy sources, hydro power has the most even distribution across the different regions of the world. In North and South America, hydro power is responsible of 20.7% of the global electricity generation output. In the South American sub-region, electricity production by hydro power in 2009 outperformed the others to reach 21.2 TWh. Throughout the whole region electricity production from hydro power increased 2.8% per year during the period 1999-2009, adding 160.7 TWh to the total electricity generated in this period.
Thus, hydro power represents a strong option for the generation of electricity for the Latin American and the Caribbean countries during the coming years, and will continue to be the main source for the future generation of electricity in South America along with coal and natural gas. But building big hydro power plants is facing today many difficulties in several countries of the sub-region. It has associated high economic risks not only because it is capital intensive with long periods of construction and long repayment horizons but also because the local energy spot prices may vary considerably. Another reason is that the construction of a dam could force many people to leave their homes and places of work, and to move to places new for them, something that always provoke the rejection of the affected people.
Nevertheless, hydro power is now playing, and will continue to play an important role in the coming years, in the energy mix in countries such as Venezuela, Brazil, Uruguay, Paraguay, and Costa Rica. Hydro power contributes now with 21% of the world’s electricity generation capacity, an increase of 4% respect to 2004, and supplies 87% of electricity derived from renewable energy sources in 161 countries. However, only a third of the world’s realistic hydro power potential has so far been developed. According to IJHD (2010), the theoretical potential of worldwide hydro power is 3 721 GW, which is about four times the 926 GW utilized up to the end of 2009. The total electricity produced by the hydro power sector in 2009 was 3 810 TWh.
Chapter III describes the current and future role of wind power. In 2009, wind power rose to become the number two within all renewable energy sources used for the generation of electricity (268.2 TWh), overtaking biomass for the first time but still far behind hydro power. It accounts for 13% of all electricity produced and 7% of the total renewable energy output used for the generation of electricity in the region. Growth in the wind power sector in 2009 rose 22.1% becoming the second strongest of all the electricity-generating sectors after solar power. However, this percentage is slightly below the annual growth rate of 28.9% reached by the wind sector during the period 1999-2009.
Wind sector is, undoubtedly, the best placed renewable energy source to back up the hydro power sector and is, an important energy source to reduce the current trend of increasing reliance on fossil fuels. At the end of 2009, world’s installed wind power capacity stood at 150 000 MW, which is double the level reached in 2006.
According to recent forecast report prepared by HIS Emerging Energy Research, Latin American and the Caribbean region is set to become a global wind powerhouse in the coming decade with more than 40 GW of wind capacity by 2025. This forecast comes from a study entitled “Latin America Wind Power Markets and Strategies: 2010–2025” which concludes that “Brazil will lead the region with 31.6 GW installed by 2025 (79% of the total for the region), followed by Mexico with about 6.6 GW expected to be installed by that year (16.5% of the total)”. Chile will also add significant wind power, boosted by the country’s Renewable Portfolio Standard. In addition to Brazil, Mexico, and Chile, other countries such as Peru, Argentina, Uruguay and Costa Rica are considering the use of wind energy for the generation of electricity, although there is a lack of policy in execution.
Chapter IV provides a wider picture of the current and future role of solar power in the region for the generation of electricity during the coming years. According to the IEO (2009) report, solar power is one of the fastest-growing sources of renewable energy worldwide. Many nations, concerned about the environmental impact of the generation of electricity from fossil fuels or from large-scale hydro power plants, have been turning to solar power as an environmentally benign alternative. Two solar power technologies are widely used today, and their utilization is likely to increase in the future. These technologies are: Solar photovoltaic and solar thermal.
One popular application of solar photovoltaic is in solar panel installations on residential roofs, which can be scaled to accommodate different house sizes and electricity needs. Although the technology now is used most often in small residential applications, it can be scaled up to create larger solar power plants for the generation of electricity. But currently the cost of electricity produced from solar photovoltaic is generally too high to compete with wholesale electricity in many countries. Nevertheless, in sunny locations, the cost of electricity from solar energy can be as low as 23% of the cost per kWh electricity from other energy sources. Although prices for electricity from solar photovoltaic may not become widely competitive with wholesale prices for electricity from conventional generating technologies over the next twenty five years, they can be competitive with high retail electricity prices in sunny locations, and used to reduce further the dependency of many countries on fossil fuels for the generation of electricity. Presently, solar photovoltaic technology is gaining market share in countries where there is declining prices and government-backed financial incentives.
The most commonly used of solar thermal technology is the parabolic trough. This is currently the cheapest and most generally used technology. Using parabolic collector technology, solar power can be produced in capacities between 10 MW and 200 MW. The modular character of a solar array makes any initial capacity possible. From a commercial point of view, the larger, the better. Through the establishment of mass production for mirrors and absorbers and the further development of heat storages, parabolic collector power plants will in future be economically comparable with conventional power plants in medium-load operation. Solar thermal power plants are intended to compete with wholesale generation, especially from peaking plants, and they may become more competitive over time, if heat storage technologies improve, costs decrease, and policies specifically adopted to mitigate CO2 emissions are fully implemented.
In the Latin American and the Caribbean region, solar energy is more evenly distributed, as good portions of the region lie within the so-called “Sun Belt Region” with highest solar radiation. Thus, except for site specific adverse microclimates, solar energy is a predictable and reliable energy source, susceptible of being transformed to heat and electricity by means of several technologies now in different stages of development and commercial availability. Solar irradiance maps are available for Mexico, Colombia, Brazil, Argentina, and a few other countries.
Chapter V describes the current and future role of geothermal energy for the generation of electricity during the coming years. This type of energy can be found in different areas of high volcanic activity located in different countries of the region. Electricity using geothermal energy source is now produced in twenty four countries; five of them obtain between 15% and 22% of their national electricity production from this type of energy source. Direct application of geothermal energy (for heating, bathing, etc.) has been reported by seventy two countries. By the end of 2004, the worldwide electricity generation using geothermal energy source was 57 TWh per year. Twenty four countries had geothermal power plants in 2010, which generated a total of 63.9 TWh, an increase of 12.1% respect to 2004. Ten developing countries are among the top fifteen countries now using geothermal energy sources for the generation of electricity. According to the International Geothermal Association (IGA) projection made in 2008, total global geothermal capacity is expected to rise to 11 GW by 2010. However, it is possible to increase further the installed world’s geothermal electricity capacity to 70 GW using present technology, and to 140 GW using enhanced technology. Enhanced geothermal systems, which are still at the experimental phase, have enormous potential for primary energy recovery using new heat-exploitation technology to extract and utilize the Earth’s stored thermal energy.
Geothermal energy supplies a significant portion of the electrical power demand in several developing countries. Individual geothermal power plants can be as small as 100 kW or as large as 100 MW, depending on the type of geothermal resource found and the power demand. Undoubtedly, this technology is suitable for rural electrification and may be especially important and significant in developing countries where no local fossil fuel resources exist.
During the period 1980-2010, the installed geothermal capacity increased from less than 2 000 MW in 1980 up to almost 12 000 MW in 2010 - a six fold increase.
Chapter VI describes the current and future role of biomass in the region for the generation of electricity. In 2009, the use of biomass as energy source was overtaken by wind power and fell to number three among all renewable electricity sources producing 1.2% of the world’s electricity generation (241.2 TWh). The top five producer countries of biomass electricity are: USA, Germany, Brazil, Japan, and Sweden. South America investment in biomass electricity represents 13.9% of the total and is third at world’s level. However, the biomass energy sector is not well developed in the Central American sub-region, because markets are not yet wide enough, and suppliers of equipment are scarce.
The use of biomass for electricity generation, particularly residues from the sugar industry, currently provide a significant amount of electricity in Brazil, and could make a further contribution in the future. For countries using biomass from sugar cane for the generation of electricity, their potential depends on the amount of sugar cane harvested and the technology used by the sugar cane mills. Other sources of biomass (residues of the pulp and paper industry, rice, and urban solid wastes), could also be used for the generation of electricity, although historically they have been relatively small in most of the countries of the Latin American and the Caribbean region. The important point to be stressed here is the following: If countries adopt similar policies to the ones put in place in Brazil and in Cuba in recent years to increase the use of sugar cane bagasse for the generation of electricity, then an increase in the use of biomass will be ocurred in the region.
Biomass electricity output across the world increased 4.3% over 2008, whereas total electricity production decreased by 1.1%. The main contributing regions in 2009 were Western Europe with 12.7 TWh followed by South America with 4.2 TWh. Latin America has a plentiful and diverse energy resources. In addition to its immense hydroelectric potential, the opportunities for harnessing biomass although still undefined are enormous. However, there are no plans for the massive use of biomass energy for the generation of electricity in Argentina, Mexico, Venezuela, and Ecuador.
Chapter VII describes the current and future role of hydrogen in the region for the generation of electricity. According to some expert’s opinion, the future world economy will be powered by hydrogen, not by oil (the so-called “hydrogen economy”).
According to the Annual Report on World Progress in Hydrogen (2011), it is predicted that the world’s hydrogen and fuel cell market will grow to US$16 billion by 2017 and to US$26 billion by 2020 - an increase of 62.5%. Global spending on hydrogen and fuel cell innovation exceeded US$5.6 billion in 2008, and is growing in manufacturing, research, and development. In Latin America, a growing population and an increase in energy demand and in GDP has made hydrogen a focus of research in some countries in order to increase its use for the generation of electricity in the future. Argentina, Brazil, and Mexico are among the leaders in the region in hydrogen research and development. In the particular case of Argentina and Brazil, both countries are aggressively supporting research and development in hydrogen and fuel cell technologies through legislation, tax benefits, and direct financial support.
Global revenues in hydrogen and fuel cells are expected to range between US$3.2 billion and US$9.2 billion in 2015 and between US$7.7 billion and US$38.4 billion in 2020, respectively. By 2050, the industry could grow to US$180 billion, according to some experts’ calculations.
Chapter VIII gives the current and future role of nuclear energy in the region for the generation of electricity. According to the IEO (2010) report, electricity generation from nuclear power will increase from about 2.6 trillion kWh in 2007 to a projected 3.6 trillion kWh in 2020, and then to 4.5 trillion kWh by 2035. This, however, may not be achieved as a result of the nuclear accident in the Fukushima nuclear power plant in Japan in March 2011. This accident is forcing many countries to review the role previously given to nuclear power within their future energy balance. However, it is important to stress that, in the particular case of the Latin America and the Caribbean region, the impact of the Fukushima nuclear power accident in the public opinion has been very limited. Argentina and Brazil continue with the expansion of their nuclear power programs approved some years ago. Both countries are also considering the construction of a limited number of new nuclear power reactors during the coming years. Venezuela, one of the countries that were thinking of introducing nuclear power program has now decided to cancel the program adopted a few years ago. Chile, has postponed for the time being any decision to use nuclear energy for the generation of electricity.
According to the IAEA latest information, in 2011 there were 442 nuclear power reactors in operation in thirty two countries, including Taiwan, with a net capacity of 374 958 MW and sixty five nuclear power reactors under construction in seventeen countries with a total capacity of 62 862 MW. During the period 1950-2007, a total of 119 nuclear power reactors were shut down in eighteen countries totalizing 35 150 MWe (net). The countries with the highest number of nuclear power reactors shut down in this period are USA with twenty eight units and a net capacity of 9 764 MWe, followed by the UK with twenty six units and a net capacity of 3 324 MWe, Germany with nineteen units and a net capacity of 5 944 MWe, and France with eleven units and a net capacity of 3 951 MWe.
In 2012, there were six nuclear power reactors operating in three countries of the Latin American and the Caribbean regions, two in each of Argentina, Brazil, and Mexico. There are plans for the conclusion of the construction of one nuclear power reactor in Argentina (Atucha 2) with a net capacity of 692 MWe and for the construction of two new units with a net capacity of 1 480 MWe during the coming years1. In Brazil, there are plans for the conclusion of the construction of one nuclear power reactor (Angra 3), and for the future construction of five new units with a total net capacity of 5 245 MWe. Mexico has plans to build two nuclear power reactors with a total net capacity of 2 000 MWe but no final decision has been taken yet.
Chapter IX includes a summary of the main conclusions reached about the future role that could be played by different renewables and nuclear energy for the future generation of electricity in the region.
Dear Anil. I hope that you will enjoy reading my book. If I can be of any help, please let me know.
Got your book today, Jorge. It's a very good summary of the regional situation on renewables. I appreciated all the details you chased down to create the country profiles. Do you know if anyone has done a deep history of the formation of the Central American electricity systems? As I understand it, the systems were mostly privately owned until the 1950s, when the states, with the help of international organisations, began to build large hydro projects. The other area of particular interest is whether anyone has written in depth about the regulatory reforms of CA in the 1990s, with the move towards privatisation. I have seen a lot of technical literature, ie from CEPAL and the World Bank and other energy economists, but not much about the politics of these reforms. It seems even the Sandinistas acquiesced to the move- a strange turn. Gracias, andy
Dear Anil. I have a copy of the Honduras White Paper. Here is a copy of this document. I will reply to the other questions in the coming days.
Dear Anil. In my book entitled Energy Power in Latin America and the Caribbean. The Current and Future Role of Conventional Energy Sources in the Regional Electricity Generation" you will find the energy reform of several Latin American countries with the necessary details to understand the development of the energy sector.
Dear Anil. The energy reforms in several LA are included in the second book that I mentioned in my previous comment. The book that you have deal with renewable and nuclear energy, but not on energy reforms. These two books are different. One deal with conventional energy, including reforms and the second with renewable and nuclear energy.
In the book on conventional energy you have the energy reform of a group of LA countries. This is the beginning of the section that talks about energy reform:
The Energy Reform
In the second half of the 20th century, the reform of the structure of the energy sector in the Latin American and the Caribbean region was implemented with great speed. The pioneer country in the region in applying an energy reform was Chile. In 1982, the country was the first in the world in de-regulate and privatize the electric sector. Between 1992 and 1996, a group of countries followed the Chilean example, taking advantage of the lesson learned with the aim of using their own models. Brazil carried out energy reform in 1996. A second deep energy reform in Brazil was carried out during 2004, with the purpose of incentivizing the development of their hydroelectric potential. Another group of countries carried out similar energy reforms until the year 2000.
Two groups of countries with successful results can be identified associated with the implementation of energy reforms. The first group includes countries that have a wide energy demand with space for the competition, and, for this reason, a model of free market was chosen by them. This group of countries reflects satisfactory results in reducing energy losses, in the improvement of the reliability and in producing a substantial improvement in the image of the energy public sector.
The second group includes countries where the reduced size of the energy demand does not justify a competition and a free market model, and, for this reason, they opted for unique buyer’s structure. This group also obtains satisfactory results in the analyzed indicators and in the reception of private investments. However, in a limited number of countries of the region such as Cuba, Haiti, Paraguay, and Suriname, the energy sector still is under the control of the State.
The economic and fiscal crisis in the 1980s, the poor performance of the State-owned enterprises, and the international trend toward deregulation, competition and privatization, prompted most of the governments in the region to consider reforming their electric power sectors. In general, the reform programs were designed to meet the following basic objectives:
a) To ensure the long-run development and provision of electricity service in the most effective manner and in the lowest cost possible. This requires: i) That the utility is remunerated or compensated sufficiently to cover its operating costs and meet its cost of capital, so that required expansion can be financed; ii) That projects required to meet demand are commissioned on time and on cost; and iii) That the technical capacity to provide the service is developed and maintained;
b) To achieve economic efficiency in the provision of services and use of electricity through least-cost expansion, operation and efficient management, and cost-reflective pricing;
c) To secure social and national objectives. This includes, among other things, improvements in service penetration, security and reliability of supply, environmental goals and provision of electricity service to low income consumers, among others;
d) To reduce the role and intervention of the State in the energy sector, through the concentration of their activities in the field of energy regulation;
e) To attract private capital;
f) To introduce competition and price deregulation, wherever feasible;
g) To regulate the residual monopoly areas, in a manner that maximizes the benefits and reduces the costs of intervention.
The situation only got worse in the beginning of the 1990s. In spite of the increasing demand for electricity, which amounted to 2 500 MW per year on average during 1991-1994, the expansion of generating and transmission capacity was only 1 080 MW per year. Several utilities that embraced ambitious expansion plans during the 1970s and 1980s were not able to pay the loans contracted. Others companies lacked more professional management and had high running costs that also could not be met with their revenues. The prevailing institutional and regulatory framework was also not adequate at the time to solve financial transactions within generating and distributing companies, and the huge debt that was accumulated by them (De Martino Jannuzzi, 2004).
To avoid another energy crisis in the future, several Latin American and the Caribbean countries started, at aboutthe beginning of the 1990s, an energy reform with the purpose of:
a) Improving further the energy balance in each country;
b) Reducing the use of fossil fuels for electricity generation;
c) Increasing the participation of renewable energy sources available in the region in the energy mix;
d) Adopting of new institutional and regulatory arrangements in order to reduce the role and intervention of the States in the energy sector;
e) Introducing competition and price deregulation, wherever feasible;
f) Promoting the participation of the private capital in the energy sector;
g) Expanding on-going nuclear power programs for electricity generation in a limited group of countries, in order to reduce the CO2 emissions to the atmosphere;
h) Diminishing the cost of the electricity production using the most cost effective and efficiency energy sources...............................
Thanks Jorge. It sounds so logical, but you know that there is always a contention of interests. What seems logical (free markets) to one person is ideology to another. In this case, we are talking about an entire generation of guerrillas turned politician who were inspired by the Cuban Revolution. The Sandinistas and FMLN gave lives for decades to fight US imperialism and were inspired by the idea of socialism (or at least mixed markets). The Chilean example was certainly not a clear choice either, after all the country was still run by military dictator Augusto Pinochet. While the Chilean economy was doing pretty well in macroeconomic terms, its energy system, as you know, still has major issues in terms of dependency on imports and questions about sustainability. To go even deeper, one can point to the example of Costa Rica, where the system was never privatised, and yet is one of the best run in the region. And in every country, the state still retains at least partial ownership, so one can not speak of these reforms as fully embracing free markets and private investment. So, I don't think the reforms you outline above are as clear as you suggest; there were choices that had to be made. Those choices were done in the context of very contentious elections, from Chamorro to Zelaya most recently in Honduras. That is what I am referring to in terms of the lack of discussion of politics (vs policies; or the why vs. the what). I can't find anyone who talks about this. If you say the logic of energy shortage forces states to embrace foreign investment, that could have happened at any time during the long history of energy dependency in Central America.
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