Siepac continues to move forward amid challenges

System of Electrical Connection of Central American Countries (Siepac) it has been paid and now benefits are being obtained for its members, emphasized Arturo Alarcón, an expert on Energy from the Inter-American Development Bank (IDB).

Alarcón pointed out that more than 40 years ago, given that the line connecting the six countries created a Regional electricity market (MER) or regulatory institutions seemed like a pipe dream, however, it is currently realized and working.

“If you compare how it is the region would develop in the opposite scenario, with each country independently developing its resources, relative to the actual scenario where they can be exchanged, there are benefits. These benefits already exceed interconnection cost,” Alarcón explained.

For his part, he Regional electricity market, on which exactly The Siepac project works like that and as intended: a seventh market that overlaps existing national systems.

However, there are also issues for improvement in this electrical integration. Alarcón emphasized that some countries manage to transfer these benefits users, while others are trapped in some market segments.

“We need to take short-term steps. There are issues that need to be resolved, such as continuing work on national reinforcement, i.e. maintaining the 300 MW with which it was built September. Keep the freeway clear for international transit and not fill it with national traffic,” Alarcón added during the forum Renewable energywhich brought together representatives and experts from the sector.

Another market challenge points to rights transfer, which are short-lived and if they can be contracted for longer periods, they can open the door to other types of contracts and transactions.’

80%

part of the consumption of this market is served from renewable sources.

6%

represents the regional market in electricity transactions between countries.

“The contract states that we must progress gradually. We cannot stay where we are. Thinking about 2050, we must put Siepac as well as something big for Mexico, Belize and Colombia,” Alarcón said.

from his side Rodrigo Rodríguez, from MERhe pointed out that the annual consumption in this market is more than 50,000 Gwh, of which 80% of the consumption is achieved through conventional or non-conventional renewable sources.

This share of renewable energy technologies in the total electricity production in the region varies significantly from country to country. For example, the national electricity grid in Honduras contains one of the highest percentages of solar energy in the world (18%), while in Costa Rica, the share reaches only 0.15%.

“Countries have different energy matrices. In some, hydraulic production predominates, in others with volcanic zones, there is even geothermal production,” Rodríguez said.

This difference is explained by the diversity of renergy regulations and policiestogether with inequalities in the availability of resources.

In the meantime, the intervention of the private sector can be seen influenced by local policies and regulations. In 2020, private participation in the electricity market varied between 21% in Costa Rica 94% in Panama.

Transactions between countries account for approximately 6%. There are still a few technical hurdles to overcome, including the regulatory framework, which makes it difficult to obtain contracts in the medium and long term.