Panama City, Panama, 23 May 2018: Upgrades to Panama’s regulatory environment and power system management are critical to achieving the renewable energy goals set out in the country’s National Energy Plan, said the International Renewable Energy Agency (IRENA) via a Press communiqué. IRENA launched a Renewables Readiness Assessment Panama report, which was presented to Dr Victor Urrutia, Secretary of Energy, Panama, the communiqué further said.
According to IRENA, a central recommendation of the report calls for amendments to the country’s regulation of Power Purchase Agreements (PPAs) for variable renewable energy sources, such as solar and wind. The communiqué said, currently, these renewable energy technologies are attributed a value of zero ‘firm capacity’ – the actual amount of energy that a power plant can guarantee to make available under maximum operating conditions – while thermal power plants and hydropower facilities are rewarded with far higher firm capacity values. This makes solar and wind less competitive in Panama’s wholesale electricity market, and can disincentivise investment, the communiqué further said.
Adnan Z. Amin, Director-General, IRENA, said: “Enabling policies and attractive regulatory frameworks can drive renewable energy deployment, which in turn can boost low-carbon economic growth and enhance energy security. Panama’s abundant renewable energy resource potential offers the country an opportunity to cost-effectively meet its long-term energy needs and underpin its transition to a sustainable energy future.”
Panama’s National Energy Plan is a roadmap that seeks to increase the share of renewables in the power system to 70% by 2050, the communiqué said. By the end of 2016, wind and solar power capacity had reached 270 megawatts (MW) and 90 MW respectively, the communiqué further said.
Dr Urrutia said: “Panama can set a strong example for the Central American region by utilising our potential to generate 70% of our electricity from hydropower, wind and solar resources. IRENA’s support through this RRA process will facilitate the realisation of our long-term ambition. In addition to the moral and ideological imperative, we also have an enormous interest and commitment to renewable energy. Renewables are no longer an alternative option but instead offer a clear path to the future.”