The National Authority of Public Services (ASEP) has approved multiple licenses for renewable energy in Panama in the form of wind turbine and photovoltaic (solar) power generation. Other licenses are pending, which, when approved, will represent production of twice the current energy demand for the country, as reported in La Prensa.
This construction boom is due in part to the decreased cost of equipment and tax benefits. Also hydroelectric plant construction present increased difficulty as many communities and environmentalist oppose new plants. Currently 770 MW in licenses are approved, with another 190 MW pending. Solar power plants have 328 MW in approved licenses and another 885 MW in provisional licenses. At this moment 100 MW are under construction and will soon be part of the network. In contrast to thermal and hydroelectric plants, which produce more than 100 MW of power, solar and wind machines produce 10 MW and qualify for tax incentives.
Before this boom, the National Center of the Electricity Transmission Companies asked ASEP to temporarily suspend the granting of new licenses so that a study could be made to determine how these new plants would be installed into the current system. The concern was the new plants would create instability and fluctuations in the power grid. Many small plants installed into the system would emphasize this issue, according to experts. This study should take two months and determine the viability of including the solar and wind-turbine plants into the system.
This all occurs during the midst of an energy crisis caused by decreased rains. The El Niño effect reduces the level of the reservoirs used for the current hydroelectric power system. For Union of Industrialists of Panama President Richard Sotelo, this is a problem that can be solved. He said that Panama has a good energy matrix but forecasts that if we don’t consider the use of wind and solar power, it could limit options for strong power.