Hydroenergy: The Renewable Sources of Energy, contribute to the
Sustainable Economic Development in Guatemala.



Alleviating the longing for oil in the world has become more and more difficult. The insatiable thirst of the United States and of the emerging markets such as China and India, and the limited capabilities for drawdown and refining have created, among other factors, the continuous changes in prices of oil and oil derivatives. An economic development based on remote, alien and limited source of energy cannot be sustainable. The Renewable Sources of Energy “RSE” have attracted special attention and interest. The third report on the evaluation conducted in 2001 by the Inter-governmental Board on Climatic Changes “IPCC” (for its initials in Spanish) recognized the “increase of the greenhouse effect” due basically to the growing efflux of carbon dioxide in the environment. Maybe this phrase has no meaning for people who live in the cities because they do not have direct contact with nature, but it is of the utmost importance to recognize the statements made by scientists from all over the world that the continuous and steadfast increases in temperature, due to the accrual of fumes with a greenhouse effect, will result in serious and unexpected changes in our environment and our health. As a renewable source of electric energy, hydro-energy is and will always be very important for stability and sustainable economic development, because it is a source of energy, reduces the dependency on fossil fuels, does not pollute the environment and creates local jobs.

Guatemala has a wealth of renewable sources of energy as shown in this chart and we can say that it has a background in the promotion of RSE’s as a reaction to the increments in oil prices. This promotion started in 1985 with the issuance of Decree 17-85 on alcohol fuel, and continued with Decree 20-86 both of which were nullified in 1997. Again, another effort was made in 2003 with the issuance of Decree 52-2003, and of its regulations in August, 2005. The latter refer to incentives for the development or projects of renewable energy.
The approval of the General Law on Electricity in 1996 opened the electric market and created the opportunity for the participation of the private sector. What has happened since then if the participation in the production of electricity through renewable sources has decreased from 85% at the beginning of the nineties, to 36% in 2005? One of the key factors for the effective promotion and development of the RSE’s is the political and legal stability as well as a long term approach. The development of projects for the generation of energy with renewable sources has the characteristic of a slow capital return (in some cases up to 20 years) and the changes in the rules of the game do not provide security for the investments. The present administration promotes the development of the RSE’s to obtain in the short, medium and long terms an optimum balance of the technologies of electric generation. We have to also consider (and later analyze) the hidden costs of the fossil fuels to understand that the effects on our economy are still more important than what we presently understand. The hidden costs are found: in the environment, in the security of the supplies and in the limited competitiveness both in the region and in the world.


During 2004, 39.1% of the electricity generated, equivalent to 2,741.4 GWh came from Hydro-electric and Geo-thermal plants. This amount of energy generated is equivalent to over one million eight hundred thousand tons of carbon dioxide that did not pollute the environment in Guatemala.

At present the hydro-electric potential utilized is 650.3MW of which 227MW come from a group of private hydro-electric plants that supply the national system, and there are several private hydro-electric projects being developed for an additional increase of 605MW. In addition, the National Electrification Institute –INDE- has expressed an interest in promoting other hydro-electric projects. Geothermic also has an unexploited potential, however, efforts are being made to use it in a new construction project. This effort of the private and public sectors for the development of the RSE’s will place Guatemala in a strategic position for its sustainable development: a healthy energy balance. The stability and transparency of the sector is the key to inspire trust for long term investments.

In the XXI century, 17% of Guatemala’s population still has no access to the electricity distribution networks. The use of the RSE’s, which for their nature are in situ, are key elements to increase the coverage, creating jobs and favoring development and economic activity of neighboring communities because of the demand for goods and services. A subsidy to electric consumption is not equitable since a large part of the population still does not have access to the service and some environmental organizations criticize and oppose the development of the RSE’s. They do not see the benefits resulting from a responsible use of our resources.

Many countries of the region are facing the same situation. Within the Central American Integration System “SICA” (for its initials in Spanish) the States of the region have stated their desire to initiate a gradual process of electric integration and to develop a Regional Electricity Market through a project called System for Electric Inter-Connection of the Central American Countries “SIEPAC” (for its initials in Spanish). In addition, within the Plan Puebla Panama, Guatemala will work on an electric inter-connection with Mexico. All these initiatives should not set the RSE’s aside. During February 2006 the Federation of Renewable Energies of Central America and the Caribbean “FERCCA” (for its initials in Spanish) was created, the incorporators being the National Associations of each country, that have been working in the promotion and development of renewable sources to generate electricity. One of the regional objectives is to promote initiatives oriented to eliminating the obstacles for the development of renewable energy projects and share the good experiences to promote and improve regional rules and regulations.

Guatemala is facing a challenge: To promote a real approach to sustainable development and create the political stability, both of which are essential for social and economic development and to guarantee long term stability. Renewable natural resources are valuable and should be used properly.