In the past, Central America and its energy industry was state-owned and did have a wide range of domestically sourced energy. However, during the 1980’s and 1990’s many reforms took place which lead to the privatization of the energy sector. Both “shock therapy” and Structural Adjustment Programs were enforced by the IMF; unfortunately, these reforms meant that Central America’s energy sector became hugely dependent on traditional fuels such as oil and fossil fuels, plus the energy grid as a whole was ineffective.
Central America’s energy sector has long been known for its inefficiency with constant black-outs, price spikes at petrol pumps and electricity rations. When the global energy crisis occurred in 2005, Central America announced a maximum alert with regards to its energy sector. This meant big changes were on the way and countries such as El Salvador, Guatemala and Nicaragua’s Governments pledged to increase the use of renewable energy.
Central America’s west coast is situated on the “Pacific Ring of Fire” which is considered to be a hot-spot for renewable energy, if implemented correctly; this area could be used to provide geothermal energy to many parts of the region. The Pacific Ring of Fire actually holds the potential for 2,580 MW in energy which is heat based and is enough to provide energy to around 1.5 million homes compared to consumption in the US.
The Guatemalan Government privatized its energy sector in 1998; before privatization took place, Guatemala met 92% of its domestic energy demands however, in 2005 imports of petroleum stood at 58% of the energy use.
Geothermal was actually born in Guatemala in the early 1970’s and was pioneered by a Japanese development agency. The main hot spot for geothermal energy is in the Pacaya volcano which is still active to this day. The Guatemalan Government expects to be utilizing at least 60% of its energy from geothermal sources by 2022 and has introduced tax breaks in order to attract geothermal development companies. There are currently 2 working geothermal plants in Guatemala however, the capacity they have is as yet un-known.
El Salvador has gone one step further than Guatemala in terms of when the country started to explore geothermal energy, this began back in the early 1950’s and was only stopped when the civil war took place between 1980 and 1992. Once the civil war was over, the El Salvador Government resumed its research into geothermal energy and put various reforms in place. Currently, due to the amount of effort that has gone into geothermal energy in El Salvador, it has managed to reach 24% of its overall demand for energy. This makes it one of the top 10 countries in the world making use of geothermal energy.
There are two working geothermal plants in El Salvador, one has the capacity for 95 MW and the other has the capacity for 109 MW.
Nicaragua has had a colorful history in terms of geothermal energy and still has some catching up to do. Currently, this country has a privatized energy sector but still imports enough oil to provide energy for 70% of the country. However, the Minister for Energy has stated that he would like to see 20% of oil imports reduced by the end of 2012 and for the country to be using geothermal energy in its place. Nicaragua currently has two working geothermal plants and although they are capable of a capacity of 77 and 72 MW respectively, they only output 10 MW and 24 MW; this is set to be increased.
Apo Sandawa and a Lesson to be learned
Whilst geothermal is possibly one the greenest forms of energy, we do well to learn a lesson from the Lumad people who live in the Philippines. These people regard a mountain called Mt. Apo to be sacred and when it was suggested that a geothermal plant be built there, it caused all sorts of trouble. To this day, there are arguments going on about whether the plant can indeed be built. This serves as a lesson to us all in that we have to be vigilant about how geothermal energy plants affect the areas around them.
Source: Aisha Espey, Research Associate at the Council on Hemispheric Affairs