THE FUTURE IS SUNNY

Panama 2017 | ENERGY | INTERVIEW

TBY talks to Victor Carlos Urrutia, Secretary of the National Secretariat of Energy, on the country's long-term energy plan, investment, and promoting renewables.

 Victor Carlos Urrutia
BIOGRAPHY
Victor Carlos Urrutia has vast experience in the energy sector, having served as an independent consultant, completing numerous market and feasibility studies over his career. He graduated from Purdue University in Indiana, US, and holds a doctorate and master’s degree in physics from the same university. He has also taught electrical engineering, communications, and physics at the University of Panama. He has served as administrator of the Autoridad Nacional de los Servicios Públicos ASEP, allocating concessions and licenses for electricity generation and the reintroduction of tendering rounds for assigning resources. He is a member of the Panamanian Society of Engineers and Architects and the Institute of Electrical and Electronics Engineers (IEEE).

What are the key highlights for the secretariat in 2017?

It is essential to have a long-term plan to guide the energy development of Panama in a sustainable way and in the sense of leaving future generations an economic system that is able to increase the well-being of its inhabitants in a harmonious way with the physical and social environment, while also promoting a more just and equitable society. The elaboration of a long-term energy plan, based on a participatory process, is the main achievement of this period. The preparation of an energy plan is a permanent task that will have to be updated frequently to adapt to the economic, political, and constant technological changes.

What key projects is the government currently focusing on and investing in the most?

Over the last 40 years the energy system in Panama has undergone dramatic changes. Despite the fact that energy prices have increased significantly throughout this period, energy consumption has grown overwhelmingly, achieving a general improvement in the standard of living. Life expectancy at birth, infant mortality, the literacy and schooling rate, as well as the percentage of the population with access to safe drinking water and electricity have risen sharply, as has healthcare coverage, while poverty rates dropped significantly. This level of progress, far from being satisfactory, is related to the levels of energy consumption. Between 1970 and 2013 electricity consumption multiplied by 11 and that of petroleum products by four and a half times due to the increase in disposable income of citizens, which allowed them to increase their purchasing power. These figures show that all the energy the country consumed throughout 1970 is being consumed today in just over two months. As a result of increased energy consumption, the country has become more dependent on oil imports with the consequent negative effects on the economy and the local and global environment.

How much is the current government investing in and promoting renewables?

According to figures from the National Energy Secretariat, Panama handles approximately 70% of its electricity from renewable sources, much of it from hydroelectric power plants and recently from wind or wind energy, the contribution of which, although modest, is timely and complements the service during the dry season, when the best wind regime is recorded and hydroelectric generation decreases due to the lack of precipitation during this period. The wind farm near the city of Penonomé just completed its expansion; the operations began in 2014 and by 2017 will operate at 100% capacity. It will have an installed capacity of 270MW.

What is the potential for Panama to turn into an energy hub in the region?

Undoubtedly, our geographical position, the expansion of the Panama Canal, and the proliferation in the use of LNG, due to the advantages of its properties, are the greatest opportunities for Panama to be an energy hub. Natural gas reserves have expanded greatly with the exploitation of non-conventional gas deposits (shale gas) thanks to the hydraulic fracturing technology better known as fracking. It is estimated that, with the contribution of new reserves and their lower impact on the environment, natural gas can become the most important fuel in the first half of the 21st century.

Can you anticipate your priorities and goals for 2017?

An important achievement to date is to negotiate contracts under equal conditions to conduct seismic studies on Panamanian coasts, under the multi-client mode. This is to obtain information on the possibility of the existence of oil and natural gas in our country, without incurring costs by the state. The multi-client mode allows companies to take the risk by trying to recover their investment, through the sale of the information collected for a defined term space.