Image: IRENA

IRENA has proposed a multi-point action plan to accelerate the transformation of El Salvador’s electricity sector with renewables.

El Salvador, the smallest country in Central America, is heavily reliant on imported fossil fuels, accounting for almost three-quarters of its total energy supply and one third of its electricity supply.

Renewables, mainly hydropower and geothermal, make up the majority of the balance of energy supply and almost half of the electricity supply. Yet despite their potential, renewables have shown little growth in the past decade, data from IRENA indicates in a new country assessment.

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For example, in 2010 renewables provided approximately 3,900GWh of electricity generation increasing to about 4,100GWh in 2018, driven primarily by growth in solar and bioenergy.

IRENA in the assessment, which was undertaken with the Executive Hydroelectric Commission of the Lempa River (CEL) and National Energy Council (CNE), notes that significant progress has been made in the diversification of El Salvador’s domestic energy mix, particularly with the growth of solar.

But the country’s diverse renewable resource potential is still to be tapped.

El Salvador’s masterplan for renewable energy development indicates that up to 682MW of renewable capacity could be added by 2026. This would be comprised of approximately 160MW of small hydro, 200MW of solar thermal, 90MW of solar PV, 60MW of wind and 60+MW of geothermal along with smaller capacities of biomass and biogas.

According to the analysis, competitive tendering processes and various fiscal incentives for renewable electricity have helped to create favourable business conditions for renewable power generation in the country.

However, a lack of coordination and long-term energy planning is one of the main barriers to further progress. A comprehensive national energy plan should encompass all energy technologies, suppliers and consumers and should also consider the integration of renewable energy technologies for end uses in buildings, heat and transport.

Another barrier is the fragmented nature of institutional responsibilities and a possible option is the creation of an entity that centralises sector development and directives. Renewable project development also could be fostered through a central office handling licencing and permitting in order to reduce delays and development costs.

Geothermal energy development

Among the recommendations is a focus on the conditions for geothermal energy development, which has stagnated in recent years. Resources need to be classified and project finance options should be enhanced to enable its use in both power generation and direct use applications.

The implementation of distributed power generation also needs to be assessed. A 2017 net metering scheme resulted in a successful promotion of rooftop solar PV generation but there is no clear understanding of its effects on the reliability of the power system and the overall energy market.

To improve this, all existing use of self-generation should be registered. This exercise could provide a better assessment of the existing regulatory framework, while considering the stability of the grid and the existing distribution market, as well as empowering end users for relatively flexible energy management.

“With the arrival of President Nayib Bukele, El Salvador has taken irrefutable steps, ordering the national electricity sector and seeking to diversify the energy matrix, promoting renewable energy resources such as hydroelectric, geothermal, solar photovoltaic and wind,” says Daniel Alvarez, president of CEL.

“The development of renewable energy will allow the country to reduce the use of energy sources coming from fossil fuels and rely less on energy imports. The assessment provided by IRENA will provide input and serve as a guide for the continued advancement of renewable energy development in our country.”