POWER PLAY

Panama 2016 | ENERGY | INTERVIEW

TBY talks to Marcelo Álvarez, Country Manager of Celsia, on investing in renewable energy, looking ahead to a mix of energy resources, and expansion plans.

Marcelo Álvarez
BIOGRAPHY
Before his current position, Marcelo Álvarez previously held various positions at Endesa, including head of the studies and projects department of the corporate production division, which included hydro, wind, combined-cycle, and gas, director of hydro and wind projects, and deputy manager of hydraulic projects. Later, he was director of project management at Endesa, responsible for the construction of expansion projects at the regional level.

What are Celsia's plans to expand into non-conventional renewables?

We plan to build solar farms in Chiriquí on land that we already own to take advantage of existing substations and transmission lines. The plan is to install 40 MW-60 MW of photovoltaic capacity that we hope will be completed in 2017. One of Panama's assets is the ability to use solar power to meet its energy needs. Peak energy demand is between 8am and 6pm, and we believe solar energy can meet this demand and relieve pressure on energy generation. The other plan is getting generated energy from Chiriquí to consumers in Panama City; we need to strengthen our transmission lines.

How do you foresee Panama's energy mix evolving, and what role will renewables play?

Panama has a strong hydroelectricity sector. Developing more hydroelectricity projects will be a challenge because of social and environmental restrictions. Solar and wind is what Panama will focus on in the future. Panama already has an important wind project: the Laudato Si wind farm in Penonomé. Since the cost of solar power has lowered significantly, it has become increasingly competitive and is likely cheaper than investing in wind. The priority should be maintaining a mix of energy sources. Renewables require a lot of effort to meet demand, and there is less security compared to either thermal or hydro. I envisage a future energy mix that incorporates thermal energy. Having said that, thermal will change. Today, it relies on bunker/fossil fuels; however, over the next few years we will see LNG coming in following a contract that Panama recently signed to develop LNG plants here. We will see LNG replacing bunker fuels, which will be a major change in the thermal sector. Thermal is changing and becoming much cleaner.

Celsia was recently named one of the leading companies in the world for sustainability. What is this in recognition of?

We have the largest thermal electric plant here in the country and the best relationship with the local community, both in terms of our social and environmental initiatives. We have always met requirements and we continuously work with local communities. We have a number of projects, from reforestation to community and social work programs. In terms of our thermal projects, we are in the process of renewing and updating our technology to make it more efficient and competitive. We have a restructuring plan in place for our plants in Colon whereby we hope to transform all our plants that are 40 years or older into newer, more modern, cleaner plants within the next three years. We are looking to convert our diesel plants to LNG, following the country's cleaner energy policy.

What are the company's plans for expansion in the region?

Celsia is the fourth-largest generator in Colombia and the fifth-largest distributor. In Panama we are the second generator and in Costa Rica we have a wind project with a capacity of 50 MW, which makes us the fifth or sixth generator. Right now, we have Mexico in our upcoming projects, where we intend to develop our own projects. We are considering Honduras, the Dominican Republic, Haiti, and Guatemala. Our policies are looking northward to the US, and we will evaluate any great opportunities we see arising in this region.

What are your expectations for 2016?

In 2016, we will consolidate our operations here in Panama and Costa Rica. We hope to move forward with the Chiriquí solar project and position ourselves as leaders in distribution of energy as well as in installation of solar panels in the country. We hope to consolidate our wind farm in Costa Rica and expand our capacity by 60 MW through some tender opportunities. We are also moving into transport and mobility; for example, we have a project to convert buses into electric buses with the authorities in Cali. If this works, we want to replicate this in the rest of the region.