Renewable Energy Roadmap for Central America: Towards a Regional Energy Transition

© IRENA 2022

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CITATION

IRENA (2022), Renewable Energy Roadmap for Central America: Towards a Regional Energy Transition, International Renewable Energy Agency, Abu Dhabi.

ISBN: 978-92-9260-415-8

eBook ISBN: 978-92-9260-508-7

Available for download: www.irena.org/publications

For further information or to provide feedback: [email protected]

ABOUT IRENA

The International Renewable Energy Agency (IRENA) serves as the principal platform for international cooperation, a centre of excellence, a repository of policy, technology, resource and financial knowledge, and a driver of action on the ground to advance the transformation of the global energy system. A global intergovernmental organisation established in 2011, IRENA promotes the widespread adoption and sustainable use of all forms of renewable energy, including bioenergy, geothermal, hydropower, ocean, solar and wind energy, in the pursuit of sustainable development, energy access, energy security, and low-carbon economic growth and prosperity. www.irena.org

ACKNOWLEDGEMENTS

This publication was prepared by IRENA’s Renewable Energy Roadmap (REmap) and Power Sector Transformation Strategies (PSTS) teams, under the supervision of Dolf Gielen. The toolkit and modelling of energy scenarios, including investment needs, and report were developed by Ricardo Gorini, Rodrigo Leme, María Vicente García, Maisarah Abdul Kadir, Krisly Guerra, Seán Collins and the flexibility analysis in FlexTool by Emanuele Taibi and Carlos Fernández.

Valuable input, support and comments were provided by IRENA experts: Seungwoo Kang, Herib Blanco, José Torón and Fabián Barrera, Simon Benmarraze and Paula Nardone, Pablo Ralón, Luis Janeiro, Nicholas Wagner, Walter Sánchez, Gabriel Castellanos, Paul Komor, Ahmed Badr and Ute Collier.

An important feature of this project was the high level of engagement with the countries of the Central America region, their national representatives, and regional organisms. In this sense, IRENA appreciates the data support, insights, virtual sessions, and comments from the following stakeholders: Ryan Cobb, Lennox Gladden, Geon Hanson and Deon Kelly (Belize), Laura Lizano, Víctor Bazán, Arturo Molina, Marianela Ramírez and Esteban Zeledón (Costa Rica), Juan José García, Adonay Urrutia, Josué Palacios, Mario Ángel Cáceres and Joel Flores (El Salvador), Gabriel Velásquez and Héctor Orozco (Guatemala), Sindy Salgado, Moisés Martínez, Tania Vindel, Lesvi Montoya and Jorge Cárcamo (Honduras), Santiago Bermúdez, Carlos Sánchez, Horacio Guerra and Harold Madriz (Nicaragua), Jorge Rivera Staff, Guadalupe González, Rosilena Lindo, Marta Bernal and Carlos Rivera (Panama), and the correspondent technical and diplomatic staff of each country.

Special thanks to SICA for their support in facilitating the project implementation and contributions during the process. IRENA also appreciates the contributions, support and participation in workshops of the regional organisms OLADE, ECLAC and EOR, and multilateral partners IDB, UNFCCC, UNEP and World Bank.

The publication, communications and editorial support were provided by Ling Ling Federhen, Stephanie Clarke and Manuela Stefanides. The report was copy-edited by Elisabeth Mastny. The graphic design was done by Phoenix Design Aid. IRENA is grateful for the generous support of the Government of Norway, which made the publication of this document a reality.

DISCLAIMER

This publication and the material herein are provided as is. All reasonable precautions have been taken by IRENA to verify the reliability of the material in this publication. However, neither IRENA nor any of its officials, agents, data or other third-party content providers provides a warranty of any kind, either expressed or implied, and they accept no responsibility or liability for any consequence of use of the publication or material herein.

The information contained herein does not necessarily represent the views of all Members of IRENA. The mention of specific companies or certain projects or products does not imply that they are endorsed or recommended by IRENA in preference to others of a similar nature that are not mentioned. The designations employed, and the presentation of material herein, do not imply the expression of any opinion on the part of IRENA concerning the legal status of any region, country, territory, city or area or of its authorities, or concerning the delimitation of frontiers or boundaries.

TABLE OF CONTENTS

FIGURES

TABLES

BOXES

FOREWORD

ABBREVIATIONS

COUNTRY CODES

KEY FINDINGS

SUMMARY

1INTRODUCTION

1.1 Focus of the report

1.2 Methodology

1.3 Energy transition goals and recent progress

2THE ROADMAP FOR CENTRAL AMERICA

2.1 Renewable energy roadmap

2.2 Investment opportunity

2.3 End-use sector technology costs

2.4 Emissions

3RENEWABLES IN THE POWER SECTOR

3.1 Renewable energy capacity

3.2 Regional power system integration

4ELECTRIFICATION IN THE END-USE SECTORS

4.1 Electricity use in total final energy consumption

4.2 Electricity use in the transport sector

4.3 Electricity use in cooking

5RENEWABLES DIRECT USE IN THE END-USE SECTORS

5.1 Renewables direct use in industry

5.2 Renewables direct use in buildings

5.3 Renewables direct use in transport

6ENERGY CONSERVATION AND EFFICIENCY

7HYDROGEN AND ITS DERIVATIVES

8SECTOR ACTION NEEDED NOW

8.1 Buildings

8.2 Transport

8.3 Industry

8.4 Power sector

REFERENCES

ANNEX A. OVERVIEW OF MAIN ONGOING INITIATIVES AND PLATFORMS IDENTIFIED IN CENTRAL AMERICA

ANNEX B. KEY ASSUMPTIONS OF TECHNOLOGY COSTS AND FOSSIL FUEL PRICES

ANNEX C. DATA REFERENCES FOR THE REMAP ANALYSIS

FIGURES

Figure 1: Reduction of CO 2 emissions through REmap measures in the DES by 2030 and 2050

Figure 2: Central American countries considered in the REmap-FlexTool analysis

Figure 3: Description of the scenarios in the REmap study

Figure 4: Overview of the regional electrical interconnection system (SIEPAC)

Figure 6: Description of investment and costs in the analysis

Figure 5: Rationale for power sector simulations

Figure 7: Power system flexibility enablers in the energy sector

Figure 8: REmap tools for analysis of the end-use and power sectors

Figure 9: Total final energy consumption by sector, 2018

Figure 10: Total final energy consumption by country, 2018

Figure 11: Per capita electricity consumption by country, 2000 to 2050

Figure 12: Per capita regional total final energy consumption in 2018 and under the PES in 2030 and 2050

Figure 13: Annual capacity installations and renewable share in generation in Central America, 2011-2020

Figure 14: Shares of installed capacity and electricity generation by country, 2019

Figure 15: Solar PV total installation cost, levelised cost of electricity and capacity factor for Latin America and the Caribbean, 2010-2019

Figure 16: Historical emissions (excluding land-use change and forestry) in Central America by sector, 1990-2018

Figure 17: Historical emissions (excluding land-use change and forestry) in Central America by country, 1990-2018

Figure 18: Global carbon emissions abatement under IRENA’s WETO 1.5°C Scenario

Figure 19: Total final energy consumption in 2018 and under the DES in 2050

Figure 20: Renewable, traditional renewable and non-renewable shares of total primary energy supply in 2018 and under the PES and DES in 2030 and 2050

Figure 21: Power sector cumulative investment (left) and cumulative investment, operations