Green Shoots on the Isthmus

Jul 1, 2011

The need to reverse Central America’s reliance on fossil fuels is expected to spur an investment boom in renewable energy. Foreign companies have responded, but challenges lie ahead.

by Adam Williams
A drive along the Inter-American Highway through Central America provides a glimpse of what the isthmus hopes the regional energy market will soon become. On the lone intercontinental roadway that runs the Pacific coast from Guatemala to Panama City, windmills, hydroelectric dams and geothermal stations at the bases of volcanoes periodically pock the landscape.

Yet as more renewable energy projects pop up throughout the region, Central America finds itself in a battle to reverse the trend of its recent reliance on petroleum. According to the Costa Rican Electricity Institute (ICE), in the early 1990s, renewable energy sources provided the region with about 90% of its electricity, with the rest coming from petroleum generation. By 2010, ICE estimates that only about 58% of regional electricity was generated from renewable sources, while petroleum and carbon produced about 42%.

The reason for this, according to ICE, has been a surge...

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