Leonardo Gonzalez Dellan argues that the most important thing holding back the expansion of sustainable hydropower and the development of geothermal energy and other renewable energy sources such as wind, solar, biofuels and agricultural waste, is investor confidence.
“The region has massive potential to develop and it is time that investors understood this potential and embraced the future with both hands.”
He was responding to a report by Oxford Analytical, that argued:
• Fossil fuel use will continue to grow alongside an increase in renewables.
• Cross-border trade in renewable energy is likely to develop over the coming years.
• Costa Rica’s image as an ecotourism hub will drive domestic and international enthusiasm for renewables investment there.
• International commitments to mitigate the effects of climate change by cutting greenhouse gas emissions help drive Central American governments’ commitment to clean and sustainable energy.
• According to the Worldwatch Institute, Central America’s non-hydro renewable electricity share is 13% — well above a 5% global average
The capacity for expansion across the region is also significant. There are an estimated 7 million Central Americans who have limited or no access to electricity services, driving up fossil fuel use for activities such as cooking, regionwide. In difficult to reach areas, well off the grid, alternative energy sources are actually easier to access than conventional fossil fuels. This is reflected in recent increases in solar productive capacity in El Salvador, Costa Rica and Panama.
Other key developments highlighted in the report include:
• the Clean Energy Corridor of Central America (CECCA), a region-wide initiative that aims to: facilitate higher shares of renewables in national power systems; promote cross-border trade in renewable power; and stimulate the investment that would be needed to ensure a long-term sustainable energy pathway in the Isthmus.
• The World Bank programme that aims to make power supplies in the region more dependable by: .
o improving the ability of Central American countries to adapt to non-conventional power generation;
o optimising management of the system’s spinning reserves; and,
o develop specific solutions to meet each country’s needs.
But the key barriers to investment in sustainable energy also remain, including:
• a lack of availability of capital;
• a lack of expertise;
• investment insecurity; and,
• expensive administrative processes.
It is here that Leonardo Gonzalez Dellan, feels the investment community can make a real difference. “Investors needs to look at the potential in the alternative energy sector and be prepared to take a risk over the long term.
States can help by making the investment process easier, and the alternative energy industry can also do more to explain its products better but in the end it is the confidence of the investors that matters most. These energy sources are the future and in the long run they will be profitable and beneficial to society, so we need to embrace them now.”