Elemental energy: How renewables could drive a sustainable Guatemalan economy

Guatemala has natural resources in abundance, and is now looking to exploit them to help develop renewable energy, both to protect its environment and promote economic development. By Marta X. Rivera.

The mountainous, forested and windy country of Guatemala offers a wealth of natural resources that could power the nation, but until now its inhabitants have scarcely begun to exploit their resources and have relied instead on their trees – and imported oil – to supply their energy needs.

Firewood is the most important source of the nation’s energy and 80% of rural families in Guatemala still use it to cook. More than 50 thousand hectares (about 124,000 acres) of forest are lost each year due to the consumption of firewood, and public and private reforestation programmes struggle to keep pace with the tree loss, only recovering 25 thousand hectares (around 62,000 acres) each year. If logging continues at this rate, the woodlands will become depleted, and either the availability of firewood will diminish or its price will rocket. In the meantime, other resources are neglected as the nation also imports fossil fuels for up to 60% of its electric energy generation needs.

It is a situation that cannot go on indefinitely, and campaigners and politicians are now urging alternative solutions. Iván Azurdia, a representative of Fundación Solar, a private development organization, believes the use of all its natural resources is a key building block to strengthening the Guatemalan economy and making it more sustainable. ‘We can’t think of competitiveness without first making sustainable efforts to reduce poverty. We cannot think about globalization if people are still carrying firewood on their backs to subsist, and there are no possibilities for development,’ he says.

Ironically, the nation has the capacity to generate all its own energy using renewable and non-renewable sources. Reviewing the data, the Guatemalan Ministry of Energy and Mines has pointed out Guatemala’s huge range of untapped resources. Indeed the country could generate around 13,800 MW itself using hydro, wind, biogas, biodiesel, bioethanol as well as fast-growing energy crops, sustainable forestry, industrial and agroforestry waste.

Guatemala’s water, sun, wind, biomass and geothermal resources are abundant enough to produce, supply and export energy to all of Central America. Available water resources and the large, small, private and state-owned hydroelectric projects have the capacity to generate some 10,000 MW of energy for nearly 40 million Central Americans, but to date only 7% of this capacity has been tapped. The Guatemalan sun could generate up to 5 kWh per m²/day – if properly tapped it could provide clean energy for years to come.

Guatemala has abundant potential for small hydro projects which could generate hundreds, even thousands of megawatts of power all images fundación solar

Work is in progress, though, and one of Guatemala’s forgotten energy sources will become visible when a 15 MW wind farm, the first in the country, starts to operate. Construction of the plant, about to begin, could mark the first of a potential 7800 MW produced by wind alone.

As the government considers a new sustainable energy policy, Emmanuel Seidner, sub-commissioner for the national Competitiveness Initiative, emphasizes the role that new energy can play and advocates that all the sectors should reach agreements to make use of its potential. ‘As part of the National Agenda of Competitiveness we are promoting clean energy generating projects that can compete in the international market, not only through hydroelectric projects, but also with carbon projects, utilizing bagasse,’ he says.

One of the first concerns will be to reduce dependency on ‘traditional’ biomass. Two billion people worldwide still depend on biomass to obtain energy, including a high proportion of Guatemalans. They are also, nearly always, the poorest. The use of firewood also creates bronchial pulmonary diseases when smoke is inhaled from open fires. This could be remedied by providing firewood from energy woods planted for that purpose, or introducing new cooking fuels such as vegetable coal (which has a high energetic content and is more efficient), propane gas and others.

Energy access in poor regions

To improve its energy policy and help it to construct a stronger economy and reduce poverty, Guatemala is one of twenty-four countries from around the word benefiting from financial and technical aid from the Renewable Energy and Energy Efficiency Partnership – REEEP. The international alliance of governments, NGOs and businesses is helping to accelerate policies and regulations in support of sustainable energy. REEEP is supporting Fundación Solar to assist Guatemalan policy makers in developing a new energy framework which would build in three components: energy efficiency, sustainable development and a competitive economy.

Speaking after REEEP workshops arranged to discuss the issues, Ivan Azurdia, whose organisation is a key REEEP partner, said: ‘We are facilitators supporting the state with a proposal that will be consulted by multiple stakeholders from civil society, and we believe in renewable energy as a route or means towards sustainable development, and not only as a goal itself. Fundación Solar is recognized by its accumulated experience in this subject area. We have worked together with the government to develop a renewable energy and energy efficiency project that may reach economic, social and environmental development to cover basic social needs: housing, food, health, education, while working in one of the poorest areas of the country.’

Geothermal energy also has the potential to provide locally produce energy

One of the key target areas in the drive to increase energy access – which is a key lever to economic growth – is the Franja Transversal del Norte (Northern Transversal Strip), a great portion of land that crosses the northern part of the country. The United Status Agency for International Development (USAID) and the United Nations Development Program (UNDP) conducted a study in 74 rural communities across six municipalities to produce an action plan, supported by energy and other ministries.

Economic competitiveness

Having the most expensive electricity prices in the region also hampers Guatemala. This is one of the first problems that must be remedied in order to improve energy diversity as well as create a more competitive economy. ‘Having the highest electricity rate is a limiting factor,’ says Seidner.

But he is confident that private participation in energy generation will increase more and more and in that process, companies will have to comply with environmental regulations and use more renewable energy. Guatemala is dealing with a short-term market-oriented privatization programme, and this is one of the causes of the pricing issue.

Oscar Coto, an expert on energy services and member of Fundación Solar, explains: ‘In the middle of the nineties, Guatemala decided to structure a supply-demand based market model for the energy sector. Fossil fuel generators found a means to pay back their investments efficiently, however market deregulation generated distortions which have not made it possible for renewable energy projects to compete, until the recent publication of the regulations that govern the incentive law for generation with renewable resources.’

Women crossing a river in Guatemala

Energy policies are patchy and this also contributes to some of the erratic pricing, as there is no coherent overview. REEEP’s advisors could help review the process and, if necessary, overhaul the system. There is currently no national energy law and the term ‘energy policy’ has been used as synonym for the regulations and standards within the electrical sub-sector, which forms only a part of the whole energy jigsaw. Energy used for other purposes, which occupies a prominent place in the energetic consumption, is not yet regulated.

The Constitution of the Republic of Guatemala does establish a fundamental duty of the State to guide the national economy using natural resources and adopting the necessary measures to use them efficiently.

A few years ago, the National Electrification Institute (INDE, in Spanish) set an Electrification Master Plan into motion and this was the closest the nation came to an energy policy. However, there has been no route map indicating the fastest means of reducing poverty and maintaining competitiveness.

‘The government is aware of how important it is to seek new renewable energy sources that make it possible for us to reduce costs and make Guatemala a more competitive economy in the region’, says Guatemala’s Energy and Mines Minister, Carmen Urizar. ‘The issue of a sustainable policy goes far beyond reaching electricity supply goals. Therefore we want to motivate investment in energy generation with renewable resources. We see that as an urgent matter’.

The route map has still not been drawn up, but REEEP’s work has helped to sketch its first outlines. The possibilities are wide ranging: ‘Decisions we make today regarding energy will affect people who will be studying or working, 30 years from now’, says Azurdia. ‘It is our responsibility and that of all Guatemalans to keep the country in better or at least the same conditions we received it, since it is the same country of those who are not born yet’.

Marta X. Rivera is Executive Director at Fundación Solar
e-mail: fsolar@fundacionsolar.org.gt

A new routemap: REEEP’s commitment to Guatemala

Through the Fundación Solar, REEEP has provided Guatemala with resources to put in place a long-term sustainable energy policy. The objective is to bring together the following commitments:

  • The renewable energy incentive law, tied in with the Electricity Supply Act and creating a framework for the development and most efficient use of renewable resources.
  • Energy security – a critical theme in all countries and in particular in countries like Guatemala that are dependent on fossil fuel. Prices are dictated on the global market and Guatemala has no control over them. The supply and delivery of oil creates vulnerability. Diversifying energy resources adds to increased security and lower costs on a long term basis.
  • Energy access and energy efficiency.

Guatemala’s renewable energy in figures

Hydro: The gross potential of all rivers in the country has been estimated in 10,900 MW, and the technical profitable potential is close to the 5000 MW.

Wind: The estimated potential to generate electricity is 7800 MW, based on wind speeds (3 to 7). These have been estimated by the SWERA Project at the United Nations Environment Program.

Geothermal: The estimated potential to generate electricity with geothermic resources is approximately 1000 MW.

Solar: Estimated annual global radiation values for the entire country are 5.3 kWh/m²/ day, according to SWERA maps.

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