PARIS, France -The International Energy Agency (IEA) defines “energy poverty” as a basic lack of access to resources, such as electricity and clean fuel, which hampers socioeconomic development. Therefore, eradicating energy poverty is crucial if emergent nations hope to actualize the UN Millennium Development Goals.
Recognizing this, Central America has made important progress with the Central American Electrical Interconnection System (SIEPAC) Project, a regional effort that links six countries electrically. SIEPAC has boosted access to electricity for many Central Americans, while reducing the region’s reliance on foreign energy sources.
In 1998, Honduras, El Salvador, Guatemala, Costa Rica, Nicaragua and Panama ratified the Framework Treaty of Central American Electricity Market, officially initiating the Central American Electrical Interconnection System (SIEPAC) Project. A regional effort, SIEPAC invests in infrastructure that, with assistance from the private sector, will reduce reliance on foreign energy sources, while bringing electricity to millions.
According to the Framework Treaty, the SIEPAC Project will invest in a massive overhaul of infrastructure that, with assistance from the private sector, will result in energy independence and a drastic reduction in energy poverty.
According to RE News, “The Inter-American Development Bank has provided $253.5 million in financing for the $494 million scheme and also contributed $25 million in technical assistance to create the regional market.”
SEIPAC, completed in 2012, is a 300 megawatt system that is now completely set up and is projected to help Central America reduce it’s energy costs while providing the foundation for a growing renewable energy push. An RE Newsreport from June 2013 states that the project will grow in coming years, with a Colombian expansion in the works. Already, the system helped Panama avert disaster when, “…an energy crisis in May caused by reduced reservoir levels at hydroelectric dams…” threatened the nation. SEIPAC allowed Panama to quickly obtain power from neighboring countries.
Avoiding an energy crisis such as the one in Panama in 2013 is crucial for Central America, which has seen it’s dependence on foreign oil and energy increase since 1990. In 2008, the need for a regional electric marketplace that created homegrown energy solutions was realized by the aforementioned six countries. Before SIEPAC took hold, each was it’s own marketplace with varying levels of electrical infrastructure and energy mix. The agreement between the six saw a nearly 2,000 km connection run from Panama to Guatemala, marked with 15 substations and the connections for future transnational additions.
Years prior to this historic undertaking, geopolitics and competition made such cooperation nearly impossible, however the benefits of regional energy independence have exceeded national sovereignty; what’s good for Central America is good for each nation. This is especially poignant when considering things like the volatility of oil prices over the years and the potential savings of renewable options with the right infrastructure.
In late October 2013, the consulting engineering outfit Dessau garnered praise for it’s work on the SIEPAC endeavor. The Montreal-based firm was key in the design and management of the connections put in place, including the 15 substations. Dessau won an Award of Excellence at the Annual Canadian Consulting Engineering Awards Gala for their work on, “…a mega-project that physically interconnects six countries through shared infrastructure […, making the project] a revolutionary, peace-building endeavour in an area known for its tumultuous past riddled with conflicts and civil wars.”
Central America has placed geopolitics aside to create something truly unprecedented in the region; a massive effort aimed at energy independence, the growth of renewables, electricity for all, and private sector investment. In 2013, SIEPAC has already prevented a national energy crisis, what will come next?