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

(partial edtion from September 2006 article)

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.
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.

The Guatemala background in the promotion of RSE’s has been as reaction to the increments in oil prices. 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. 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.

In the year 2008, only the 45.7% was produce by hydropower when the hydro potential is more than seven times our present total energy demand. Only the 3.4% was produce by geothemal and also has an high unexploited potential.

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.

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.

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.

The 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.