Renewable energy in Honduras
Encyclopedia
In Honduras, there is an important potential of untapped indigenous renewable energy
resources. Due to the likely long-term trend of high oil prices, such resources could be developed at competitive prices.
Currently only hydropower and biomass are used on a large scale for electricity generation. While the potential of large generation from hydropower
and geothermal energy has been studied in detail, the potential for the development of other renewable energy resources is yet to be explored in depth.
This article covers renewable energy as a source of electricity generation and does not cover other aspects of renewable energy (biofuel
s in transport, solar heating etc.).
) for the electricity generated when the installed capacity is below 50 MW. This framework has facilitated the negotiation of about 30 public/private partnerships with ENEE for small renewable energy plants. In addition, Decree No. 85-98 also establishes tax exemptions in favor of developers: import and salestaxes on equipment, and a five-year income tax holiday.
The penetration of renewable energy technologies into rural electrification
programs is still lagging behind due to a lack of clear and consistent policy framework in the field. As a result, most of the rural electrification activities are still grid extensions.
In Honduras, there is a large potential for electricity generation based on hydropower
. In 2003 then President Ricardo Mauduro put in place a Special Commission for the Development of Hydroelectric Projects.
There are 16 new hydro projects that are expected to be commissioned before 2011, with an overall capacity of 206.5 MW. The two largest projects are the Cangrejal and Patuca 3. There are also other large hydropower project that are not included in the power expansion plan. These large projects have attracted some criticism. Some of the most prominent projects are:
Concerning medium-size and small dams, private developers receive tax breaks. Specifically, private producers are benefiting from fiscal incentives, tax exemptions, and the recognition of 10 percent of the short-term marginal cost per kWh as a premium. Fiscal incentives for small and medium-size hydropower have created a bias toward this type of development and against other renewable options, such as the use of photovoltaic, wind, and geothermal systems.
. Mesoamerica seems to be actively controlled by the Actis Infrastructure Fund.
The growth of a wider photovoltaic market in Honduras has been hampered by a combination of high unit prices, absence of financing assistance and a lack of government support.
, mainly from the sugar industry. Currently, there are nine biomass projects in operation, with a total of 81.75 MW installed capacity. These plants are estimated to supply 2.3 percent of the total demand of energy in Honduras for 2007.
Renewable energy
Renewable energy is energy which comes from natural resources such as sunlight, wind, rain, tides, and geothermal heat, which are renewable . About 16% of global final energy consumption comes from renewables, with 10% coming from traditional biomass, which is mainly used for heating, and 3.4% from...
resources. Due to the likely long-term trend of high oil prices, such resources could be developed at competitive prices.
Currently only hydropower and biomass are used on a large scale for electricity generation. While the potential of large generation from hydropower
Hydropower
Hydropower, hydraulic power, hydrokinetic power or water power is power that is derived from the force or energy of falling water, which may be harnessed for useful purposes. Since ancient times, hydropower has been used for irrigation and the operation of various mechanical devices, such as...
and geothermal energy has been studied in detail, the potential for the development of other renewable energy resources is yet to be explored in depth.
This article covers renewable energy as a source of electricity generation and does not cover other aspects of renewable energy (biofuel
Biofuel
Biofuel is a type of fuel whose energy is derived from biological carbon fixation. Biofuels include fuels derived from biomass conversion, as well as solid biomass, liquid fuels and various biogases...
s in transport, solar heating etc.).
Legal and policy framework
Decrees No. 85-98 and 267-98 promote the development of renewable energy-generating plants. The decrees include tax breaks to developers and a secure buyer for energy at prices equivalent to the system’s short-term marginal cost. The national integrated utility ENEE, which is the default buyer, must pay a premium (10 percent of the same short-run marginal costMarginal cost
In economics and finance, marginal cost is the change in total cost that arises when the quantity produced changes by one unit. That is, it is the cost of producing one more unit of a good...
) for the electricity generated when the installed capacity is below 50 MW. This framework has facilitated the negotiation of about 30 public/private partnerships with ENEE for small renewable energy plants. In addition, Decree No. 85-98 also establishes tax exemptions in favor of developers: import and salestaxes on equipment, and a five-year income tax holiday.
The penetration of renewable energy technologies into rural electrification
Rural electrification
Rural electrification is the process of bringing electrical power to rural and remote areas. Electricity is used not only for lighting and household purposes, but it also allows for mechanization of many farming operations, such as threshing, milking, and hoisting grain for storage; in areas...
programs is still lagging behind due to a lack of clear and consistent policy framework in the field. As a result, most of the rural electrification activities are still grid extensions.
Hydropower
Currently, 33 percent (502 MW) of the installed capacity of the national interconnected system is hydro plants. There has been an intensive use of small- and medium-scale hydro energy, with 14 out of 16 existing hydro plants with capacity below 30 MW. Two large plants (El Cajon and Rio Lindo) account, however, for more than 70% of the total capacity.In Honduras, there is a large potential for electricity generation based on hydropower
Hydroelectricity
Hydroelectricity is the term referring to electricity generated by hydropower; the production of electrical power through the use of the gravitational force of falling or flowing water. It is the most widely used form of renewable energy...
. In 2003 then President Ricardo Mauduro put in place a Special Commission for the Development of Hydroelectric Projects.
There are 16 new hydro projects that are expected to be commissioned before 2011, with an overall capacity of 206.5 MW. The two largest projects are the Cangrejal and Patuca 3. There are also other large hydropower project that are not included in the power expansion plan. These large projects have attracted some criticism. Some of the most prominent projects are:
- Cangrejal: This planned dam on the Rio Cangrejal near La CeibaLa CeibaLa Ceiba is a port city on the northern coast of Honduras in Central America. It is located on the southern edge of the Caribbean, forming part of the south eastern boundary of the Gulf of Honduras...
, with an associated 40 MW power plant, has attracted international criticism due to its potential environmental impact, including the flooding of rapids that are a well-known whitewater sports destination and attract many tourists
- Patuca 3: The Patuca 3 dam on the Patuca RiverPatuca RiverThe Patuca is a river in northeastern Honduras, formed southeast of Juticalpa by the merger of the Guayape and Guayambre rivers. It is the second largest river in Central America....
in the Department of Olancho, with an associated 100 MW power plant, is to be built in a protected area that is part of the Mesoamerican Biological CorridorMesoamerican Biological CorridorThe Mesoamerican Biological Corridor is a large habitat corridor in Mesoamerica, stretching from Mexico southeastward through most of Central America, connecting several national parks. It was started in 1998 to keep 106 critically endangered species from going extinct...
and is inhabited by indigenous people whose livelihoods would be affected.
- Los Llanitos: The Los Llanitos Hydroelectric Power Project is planned on the Ulua RiverUlúa RiverThe Ulua River is a river in western Honduras. It rises in the central mountainous area of the country close to La Paz and runs 150 miles approximately due northwards to the east end of the Gulf of Honduras at . En route, it is joined by the Sulaco River, the Otoro River and the Chamelecon River....
. The plant was initially expected to have a capacity between 94 and 135 MW, but has later been reduced to 50 MW. Initial plans had been drawn up as part of the Sula Valley Water Management Plan, but the project had not been implemented.
- The Jicatuyo dam (170 MW) on the river of the same name, a tributary of the Ulua RiverUlúa RiverThe Ulua River is a river in western Honduras. It rises in the central mountainous area of the country close to La Paz and runs 150 miles approximately due northwards to the east end of the Gulf of Honduras at . En route, it is joined by the Sulaco River, the Otoro River and the Chamelecon River....
.
Concerning medium-size and small dams, private developers receive tax breaks. Specifically, private producers are benefiting from fiscal incentives, tax exemptions, and the recognition of 10 percent of the short-term marginal cost per kWh as a premium. Fiscal incentives for small and medium-size hydropower have created a bias toward this type of development and against other renewable options, such as the use of photovoltaic, wind, and geothermal systems.
Wind
Due to the diversity of the Honduran landscape, the potential for wind development varies considerably. Currently, there is a 100 MW wind project under way, finance was agreed with US EXIM Bank in mid 2010 (EXIM bank project reference AP083987xx) and is expected to begin construction in late 2010. This project, sponsored by Mesoamerica Energy, will be located in Cerro de Hula, in the municipalities of Santa Ana and San Buenaventura, 20km South of TegucigalpaTegucigalpa
Tegucigalpa , and commonly referred as Tegus , is the capital of Honduras and seat of government of the Republic, along with its twin sister Comayagüela. Founded on September 29, 1578 by the Spanish, it became the country's capital on October 30, 1880 under President Marco Aurelio Soto...
. Mesoamerica seems to be actively controlled by the Actis Infrastructure Fund.
Solar
Honduras has a large potential for solar photovoltaic generation. In fact, it is a practical solution for servicing energy-isolated rural communities. Currently, there are about 5,000 individual Solar Home Systems, with an average size between 30 Wp and 50 Wp, which makes up for a total capacity of approximately 15 to 25 kW of power.The growth of a wider photovoltaic market in Honduras has been hampered by a combination of high unit prices, absence of financing assistance and a lack of government support.
Biomass
Honduras has a large potential for electricity generation from biomassBiomass
Biomass, as a renewable energy source, is biological material from living, or recently living organisms. As an energy source, biomass can either be used directly, or converted into other energy products such as biofuel....
, mainly from the sugar industry. Currently, there are nine biomass projects in operation, with a total of 81.75 MW installed capacity. These plants are estimated to supply 2.3 percent of the total demand of energy in Honduras for 2007.
Geothermal
The three planned geothermal projects in Honduras add up to 85.5 MW of installed capacity. The largest of them is called Platanares, in the Department of Copan, which is expected to begin operations in 2011 with an installed capacity of 40.5 MW and a generation of 354.8 GWh per year. andSources
- World Bank: Honduras. Power Sector Issues and Options, 2007.
- ENEE on Renewable Energy Prospects