• Costa Rica Real Estate

Energy Importation and Fossil Fuels

May 26, 2006

As the skies open and dump precipitation onto the fertile Costa Rican earth, rivers swell and more water churns through the nation’s hydroelectric plants, which account for approximately 80% of Costa Rica’s energy infrastructure. But in the dry summers, those rivers shrink and less electricity surges into the national grid. Like wind energy and solar energy, hydropower is prey to the whims of the weather.

To regulate and maintain a reliable supply of power for the nation, the Costa Rican Electricity Institute (ICE) has included in its infrastructure of mostly renewable resources thermal plants that burn fossil fuels when the energy supply dips. A second option is toimport electricity from neighboring Nicaragua or Panama, thanks to a treaty signed in 1996 that established the framework for a Central American energy market among Guatemala, Honduras, El Salvador, Nicaragua, Costa Rica and Panama.

In 2005, ICE imported 81.2 gigawatthours (GWh) of electricity, principally from Panama. A gigawatt-hour is the measurement of 1 billion watts of electricity running for one hour. Throughout 2005, the Costa Rican electric system produced a total of 7,825 GWh. ICE also exported 69.8 GWh, to Honduras, El Salvador, Nicaragua and Panama.

According to Javier Orozco, Director of Electric Planning and Expansion at ICE, Costa Rica generally exports electricity to other Central American countries that have more thermal-based production during the rainy season when there is a surplus of energy here, and imports it in the dry season if the supply is short. During the particularly rainy year of 2004, Costa Rica exported 312 GWh while importing only 82 GWh, Orozco said.

While some have questioned whether Costa Rica should be exporting energy, Orozco says to not do so would be a wasted opportunity, since the energy is produced anyway and cannot reasonably be stored.

For Marco Tapia, the director of the proposed Boruca Hydroelectric Project, the inconsistency of Costa Rica’s electric system between the wet and dry seasons is exactly why a project the size of Boruca is important.

According to Tapia, the Boruca project would allow ICE to hold onto water from the winter rains and use it to generate more energy in the dry seasons, making Costa Rica independent of fossil fuels and energy importation.

Environmental and indigenous groups, however, oppose the project, saying it will harm the environment and threaten the livelihood of area indigenous people, and say Costa Rica must try to decrease its demand and find alternative sources for its energy production (see separate article).

The business daily La República recently reported that Costa Rica’s use of fossil fuels rose dramatically between 2004 and 2005. According to the daily, thermal plants produced 295 GWh in 2005, compared with only 66 the year before.

A recent conference on the nation’s energy policy, which included representatives of ICE, the Ministry of Environment and Energy and others from the energy industry was held at the Harvard-affiliated Central American Institute of Business Administration (INCAE) northwest of San José in Alajuela. The conference concluded with a statement criticizing the recent surge in fossil-fuel use in Costa Rica, and urging the government to tap more renewable resources.

Dr. René Castro, an INCAE professor in environmental design and economy, criticized ICE plans to use more fossil fuels, all of which must be imported, in the coming years. According to Castro, between the imported petroleum and imported electricity, ICE is spending $50 million more than it should. He insisted that by 2016, 100% of Costa Rica’s energy needs could be covered with renewable resources.

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