ENERGIZING GROWTH

Costa Rica 2018 | ENERGY | INTERVIEW

TBY talks to Carlos Obregón, CEO of Costa Rican Electricity Institute (ICE), on the issue of electricity prices and looking into alternative sources of generating energy.

Carlos Obregón
BIOGRAPHY
Carlos Obregón is CEO of ICE. He holds a degree in civil engineering from the University of Costa Rica and completed a post-graduate in hydrology at the University of Padua, Italy. He has completed specialized courses in areas such as hydroelectric project engineering in the US, Japan, and Spain. He held leadership positions in various areas of the electricity sector, until occupying the Electricity Sub-Directorate and the General Management of ICE. Among other professional activities, he was Project Manager of INVU, President of the Federated College of Engineers and Architects, and Professor at the University of Costa Rica.

Has clean energy generation technology improved in order to make electricity cheaper?

We do not know the full effect that climate change may have on a country as small as Costa Rica. There will be an effect, namely heavy rains with potential hurricanes related to climate change. However, if we continue to guarantee the capacity of our water reservoirs, we will be able to guarantee the electricity generation required by the country. Regarding solar energy sources, we need to wait until the capacity of energy accumulators improves. As for our pricing structure, each power generation method has its own characteristics. Countries that have natural gas sources can offer a lower pricing strategy. However, we do not have such sources here. Our energy matrix gives us a competitive pricing structure in Central America and with some Latin American countries.

ICE offers services in electricity and telecommunications. Have you considered splitting the company into two separate entities?

We have accounting separation for both core business; there are no money transfers between them. They are two independent companies from an administrative, economic, and financial point of view. We do not plan to split into two completely different companies since there are synergies; we manage them under a business group strategy including electricity, telecommunications, and the 13 subsidiary companies that we have. These include state power utility CNFL, cloud computing provider RACSA that is mainly for state institutions services, and Cable Visión. These all report to ICE. Part of our actual strategy is acquiring companies in other countries in order to enter foreign markets.

What do you look to achieve with the new initiative you are developing with Japan?

We have a financial program with Japan for geothermal energy development in Costa Rica. Now, we are building a new geothermal generation power station and researching the geothermal potential for another one. The financial program used is with the Inter-American Development Bank (BID) jointly with the Japan International Cooperation Agency (JICA). We have historically worked with the Central American Bank for Economic Integration (BCIE) and, to a lesser degree, with the Commercial Bank.

Are there any plans to reduce the cost of electricity in the near future?

If our users compare prices to those in countries with cheaper energy sources we would not be competitive. Yet, I do not know of any comprehensive study that demonstrates that our prices are not competitive. There is also a discussion regarding construction costs as we build our own power generation stations. We have analyzed our construction costs scheme and it is similar to comparative projects in other countries, taking into account our topographical and geological conditions. The discussion is mainly based on the fact we are building hydroelectric power stations instead of solar power parks. When a country has no petroleum resources, it cannot guarantee that its alternative power generation systems will be completely stable. Therefore, there must be a primary element, a power source large enough to answer demand variations. We have our strong hydroelectric power generation system to supply our country's demand; when there is a shortage for any reason, we support it through wind, solar, or geothermal power. In fact, we need to develop a new hydroelectric station to continue growth in our hybrid system.

Are there any other exciting new energy methods that ICE is looking into?

Hydroelectric will always be our most important resource. However, its share will lessen gradually over time. Meanwhile, geothermal, wind, solar, and biomass will grow in share. There is an important global trend in energy right now called distributed generation resources, which consists of developing electrical energy generation by means of many small sources of energy in places as close as possible to the loads. Costa Rica is working on this as well.