35 YEARS AHEAD

Panama 2017 | ENERGY | FOCUS: NATIONAL ENERGY PLAN

The energy plan is an ambitious strategy to achieve energy savings, distribute generation plants equitably, and promote transparency and fair competition within the sector.

As a result of the continued and steady growth of its population and energy demand, the Panamanian government has focused on promoting the development of renewable sources, universal access, and rational use of energy. On March 29, 2016, the National Energy Plan (NEP) 2015-2050 was approved under the motto “Panama, the future we want” and promoted by the National Energy Secretariat. This plan is divided into two subsections: the first is a short-term operational plan for 2015-2019, specifying the specific plans for that period, while the second, the National Energy Plan Scenarios 2015-2020, includes details on price forecasts and demand, as well as the role of companies in the sector.

The NEP, which outlines the methodology of production and distribution of energy in the country, is the result of consensus reached after 16 sessions coordinated by the United Nations Development Program (UNDP) and the Energy Secretariat, which involved more than 800 people from the public sector, indigenous communities, the private sector, and civil society. Some of the key points are based on the proposal that at least 70% of the electricity matrix by 2050 will come from renewable sources, with emphasis on solar and wind energies.
Also of note is the current government's plan to achieve energy savings by 2019 equivalent to the power generation of a hydroelectric plant, as well as a strategy to distribute generation plants in an equitable and adequate way to achieve universal consumption throughout the country. These obligations for the Panamanian government also include promoting transparency and fair competition within the sector in order to achieve a fair price situation for consumers.

Panama is taking the right steps to achieve a decarbonization of its energy matrix, adapting to wind and solar projects. In addition, Panama's authorities have announced the country will no longer construct hydroelectric plants because the use of water for that purpose has reached its limits, and they advocate other renewable and clean energy sources. Panama currently has a wind farm located in the central province of Coclé and a liquefied natural gas (LNG) power generation plant in the Caribbean province of Colón, with a production of 270MW and 350MW, respectively.

National Energy Secretary Víctor Urrutia had said the energy sector will need an investment of more than USD11.2 billion by 2050 to meet an annual energy demand, which is expected to grow at a rate of 4.9%. During an interview with TBY, Secretary Urrutia stressed the importance that the application of new technologies in the field of renewables will play in the diversification of the national matrix composition. “According to our statistics, Panama today produces 70% of its electricity using renewables sources, the majority of them come from hydroelectric power stations. Wind power is imposing itself as a valid alternative towards the diversification of the matrix; it is also a great generator of energy, especially during the dry season, when the performance of our hydro plants is affected by the lack of rain. The 270MW wind farm close to Penenomè, which will be fully operative in 2017, is a great example of the importance of wind power for the country.”
To achieve all these goals, the NEP also contemplates a series of tax incentives for companies that promote and/or develop the use of solar and wind energy to reduce dependence on fossil fuels and the provision of electricity. This document will be regularly updated, both in content and in character and modifications will be made to ensure its relevance and effectiveness over time.