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Report Central America’s Energy Challenges By Cristina Eguizábal Guatemalan woman carrying a load of firewood from the slopes of the mountain to her home. In the Quiche region, more than 90 percent of families rely on firewood for cooking. Of the three poorest countries in the Americas, two are in Central America. With the exception of Costa Rica and Panama, poverty rates are high and inequality is profound. Central American countries spend much of their resources on imported hydrocarbons despite the fact that the region’s main source of energy for household use remains firewood. This is even true of Belize and Guatemala, the region’s only oil producers. As a result, the seven small economies of the region suffer when oil prices are high, as was the case in 2008. Hydroelectricity, administered by the state through public utilities and transmission companies, has dominated electricity generation in the region. In the 1990s, economic liberalization and privatization reached the energy markets and attracted foreign investors to develop new power plants. Investors preferred thermal (diesel- powered) plants as they were less costly and faster to build than hydropower plants, let alone river dams. In the 1980s, approximately 75% of the region’s energy came from hydroelectric dams; that percentage has since dropped to less than 50%. In 2009, according to ECLAC, 47.5% of electricity in Central America was generated by hydraulic power, 37.3% came from oil, 7.9% was geothermal, 4.4% was generated by sugar cane, 1.8% came from coal and 1% was wind-powered. Of that total, 60.8% of electricity was generated from renewable sources. As a result, the region’s energy matrix looks fairly diversified, although much work remains to be done for the countries to reach energy output levels capable of maintaining economic growth and lifting their Hemisphere Volume 20 21PDF Image | Energy Challenges in the Americas
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