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Renewable energy in Honduras

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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. However, leaving out the large generation from hydro resources, the potential for the development of renewable energy (RE) is yet to be explored in depth. [1]

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 cost) 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 sales taxes on equipment, and a five-year income tax holiday. [2]

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. [3]

Potential and resources

Hydro

In Honduras, there is a large potential for electricity generation based on hydro. 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 between 0 MW and 30 MW. The two existing large plants (Cajon and Lindo) account, however, for more than 70% of the total capacity. [4]

The preference of private developers for small projects is due to the existing tax breaks. More 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 for projects below 50 MW currently in place. Fiscal incentives have created a bias toward this type of development and against other renewable options, such as the use of photovoltaic, wind, and geothermal systems. [5]

Currently, there are 16 new hydro projects to be commissioned before 2011, which will add an overall capacity of 206.5 MW. Only two of those projects (Cangrejal and Patuca 3) qualify as large, being the rest below 50 MW. [6]

Wind

Due to the diversity of the Honduran landscape, the potential for wind development varies considerably. Currently, there is a 60 MW wind project under study (included in the Generation Expansion Plan) which is expected to begin operation in 2009. [7]

Solar

Honduras has a large potential for solar photovoltaic (PV) generation. In fact, it is a practical solution for servicing energy-isolated rural communities. Currently, there are about 5,000 individual SHSs (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. [8]

The growth of a wider PV market in Honduras has been hampered by a combination of high unit prices, absence of financing assistance and a lack of government support. [9]

Biomass

Honduras has a large potential for electricity generation from biomass, 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.[10]

Geothermal

The three existing 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. [11]

Sources

References

  1. ^ (World Bank, 2007)
  2. ^ (World Bank, 2007)
  3. ^ (World Bank, 2007)
  4. ^ (World Bank, 2007)
  5. ^ (World Bank, 2007)
  6. ^ (World Bank, 2007)
  7. ^ (World Bank, 2007)
  8. ^ (World Bank, 2007)
  9. ^ (World Bank, 2007)
  10. ^ (World Bank, 2007)
  11. ^ (World Bank, 2007)

See also

Electricity sector in Honduras

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