The Guatemalan Association of Renewable Energies (AGER) has identified an impressive renewable capacity potential of 3,700 MW that could be incorporated into Guatemala’s electricity grid between 2024 and 2040.
To achieve the integration of this new capacity, AGER highlights the key challenges that must be overcome:
- Transmission network upgrades: The current transmission network needs to be modernized and expanded to handle the higher load from renewable energy.
- Bureaucratic processes: Current bureaucratic processes slow down the rapid development of new renewable projects, hindering the transition to a cleaner energy mix.
The importance of long-term bidding
Long-term bidding processes have proven to be crucial for the success of the energy transition in Guatemala. Through these bidding processes, the country has achieved:
- Construction of new plants: Since the implementation of these bids, 86 new generation plants have been built, over 80% of which use renewable sources.
- Reduction of electricity rates: The bidding processes have allowed a reduction of up to 45% in electricity tariffs, benefiting consumers and stabilizing energy prices.
- Attractiveness to investors: Recent bids have shown significant interest from investors, with demand exceeding initial projections.
Proposals to strengthen the energy transition
AGER proposes several measures to accelerate the integration of renewable energy in future bidding processes:
- Prioritization of renewable sources: Set clear targets for a high percentage of contracted energy to come from renewable sources.
- Separation by technology: Divide bids by technology types (solar, wind, hydro, and geothermal), which would allow for a more detailed evaluation and more accurate project allocation.
- Participation of operating plants: Allow operational renewable plants to participate in the bidding process, facilitating a faster integration of clean energy.
- Inclusion of storage systems: Consider incorporating energy storage systems, which would enhance the flexibility and efficiency of the electrical system, optimizing the use of renewable energy.
The path to regional leadership
By implementing these strategies, Guatemala could establish itself as a regional leader in the adoption of renewable energy, contributing both to energy sustainability and the country’s economic growth.
carlos.tellez@garciabodan.com
Managing Partner
García & Bodán
Guatemala