RENEWABLEENERGYROADMAPFORCENTRALAMERICA:TOWARDSAREGIONALENERGYTRANSITIONRENEWABLEENERGYROADMAPFORCENTRALAMERICA:TOWARDSAREGIONALENERGYTRANSITION©IRENA2022Unlessotherwisestated,materialinthispublicationmaybefreelyused,shared,copied,reproduced,printedand/orstored,providedthatappropriateacknowledgementisgivenofIRENAasthesourceandcopyrightholder.Materialinthispublicationthatisattributedtothirdpartiesmaybesubjecttoseparatetermsofuseandrestrictions,andappropriatepermissionsfromthesethirdpartiesmayneedtobesecuredbeforeanyuseofsuchmaterial.CITATIONIRENA(2022),RenewableEnergyRoadmapforCentralAmerica:TowardsaRegionalEnergyTransition,InternationalRenewableEnergyAgency,AbuDhabi.ISBN:978-92-9260-415-8Availablefordownload:www.irena.org/publicationsForfurtherinformationortoprovidefeedback:publications@irena.orgABOUTIRENATheInternationalRenewableEnergyAgency(IRENA)servesastheprincipalplatformforinternationalco-operation,acentreofexcellence,arepositoryofpolicy,technology,resourceandfinancialknowledge,andadriverofactiononthegroundtoadvancethetransformationoftheglobalenergysystem.Aglobalintergovernmentalorganisationestablishedin2011,IRENApromotesthewidespreadadoptionandsustainableuseofallformsofrenewableenergy,includingbioenergy,geothermal,hydropower,ocean,solarandwindenergy,inthepursuitofsustainabledevelopment,energyaccess,energysecurity,andlow-carboneconomicgrowthandprosperity.www.irena.orgACKNOWLEDGEMENTSThispublicationwaspreparedbyIRENA’sRenewableEnergyRoadmap(REmap)andPowerSectorTransformationStrategies(PSTS)teams,underthesupervisionofDolfGielen.Thetoolkitandmodellingofenergyscenarios,includinginvestmentneeds,andreportweredevelopedbyRicardoGorini,RodrigoLeme,MaríaVicenteGarcía,MaisarahAbdulKadir,KrislyGuerra,SeánCollinsandtheflexibilityanalysisinFlexToolbyEmanueleTaibiandCarlosFernández.Valuableinput,supportandcommentswereprovidedbyIRENAexperts:SeungwooKang,HeribBlanco,JoséTorónandFabiánBarrera,SimonBenmarrazeandPaulaNardone,PabloRalón,LuisJaneiro,NicholasWagner,WalterSánchez,GabrielCastellanos,PaulKomor,AhmedBadrandUteCollier.AnimportantfeatureofthisprojectwasthehighlevelofengagementwiththecountriesoftheCentralAmericaregion,theirnationalrepresentatives,andregionalorganisms.Inthissense,IRENAappreciatesthedatasupport,insights,virtualsessions,andcommentsfromthefollowingstakeholders:RyanCobb,LennoxGladden,GeonHansonandDeonKelly(Belize),LauraLizano,VíctorBazán,ArturoMolina,MarianelaRamírezandEstebanZeledón(CostaRica),JuanJoséGarcía,AdonayUrrutia,JosuéPalacios,MarioÁngelCáceresandJoelFlores(ElSalvador),GabrielVelásquezandHéctorOrozco(Guatemala),SindySalgado,MoisésMartínez,TaniaVindel,LesviMontoyaandJorgeCárcamo(Honduras),SantiagoBermúdez,CarlosSánchez,HoracioGuerraandHaroldMadriz(Nicaragua),JorgeRiveraStaff,GuadalupeGonzález,RosilenaLindo,MartaBernalandCarlosRivera(Panama),andthecorrespondenttechnicalanddiplomaticstaffofeachcountry.SpecialthankstoSICAfortheirsupportinfacilitatingtheprojectimplementationandcontributionsduringtheprocess.IRENAalsoappreciatesthecontributions,supportandparticipationinworkshopsoftheregionalorganismsOLADE,ECLACandEOR,andmultilateralpartnersIDB,UNFCCC,UNEPandWorldBank.Thepublication,communicationsandeditorialsupportwereprovidedbyLingLingFederhen,StephanieClarkeandManuelaStefanides.Thereportwascopy-editedbyElisabethMastny.ThegraphicdesignwasdonebyPhoenixDesignAid.IRENAisgratefulforthegeneroussupportoftheGovernmentofNorway,whichmadethepublicationofthisdocumentareality.DISCLAIMERThispublicationandthematerialhereinareprovided“asis”.AllreasonableprecautionshavebeentakenbyIRENAtoverifythereliabilityofthematerialinthispublication.However,neitherIRENAnoranyofitsofficials,agents,dataorotherthird-partycontentprovidersprovidesawarrantyofanykind,eitherexpressedorimplied,andtheyacceptnoresponsibilityorliabilityforanyconsequenceofuseofthepublicationormaterialherein.TheinformationcontainedhereindoesnotnecessarilyrepresenttheviewsofallMembersofIRENA.ThementionofspecificcompaniesorcertainprojectsorproductsdoesnotimplythattheyareendorsedorrecommendedbyIRENAinpreferencetoothersofasimilarnaturethatarenotmentioned.Thedesignationsemployed,andthepresentationofmaterialherein,donotimplytheexpressionofanyopiniononthepartofIRENAconcerningthelegalstatusofanyregion,country,territory,cityorareaorofitsauthorities,orconcerningthedelimitationoffrontiersorboundaries.RENEWABLEENERGYROADMAPFORCENTRALAMERICA:TOWARDSAREGIONALENERGYTRANSITION4RENEWABLEENERGYROADMAPFORCENTRALAMERICATABLEOFCONTENTSFIGURES................................................................................................................................6TABLES...................................................................................................................................8BOXES...................................................................................................................................8FOREWORD...........................................................................................................................9ABBREVIATIONS..................................................................................................................10COUNTRYCODES................................................................................................................11KEYFINDINGS.....................................................................................................................12SUMMARY...........................................................................................................................141INTRODUCTION...............................................................................................................201.1Focusofthereport..................................................................................................................201.2Methodology............................................................................................................................211.3Energytransitiongoalsandrecentprogress.........................................................................252THEROADMAPFORCENTRALAMERICA.........................................................................342.1Renewableenergyroadmap..................................................................................................342.2Investmentopportunity............................................................................................................362.3End-usesectortechnologycosts............................................................................................372.4Emissions...................................................................................................................................403RENEWABLESINTHEPOWERSECTOR.............................................................................433.1Renewableenergycapacity...................................................................................................433.2Regionalpowersystemintegration.........................................................................................474ELECTRIFICATIONINTHEEND‑USESECTORS...................................................................534.1Electricityuseintotalfinalenergyconsumption...................................................................534.2Electricityuseinthetransportsector......................................................................................564.3Electricityuseincooking..........................................................................................................61TOWARDSAREGIONALENERGYTRANSITION55RENEWABLESDIRECTUSEINTHEEND-USESECTORS......................................................655.1Renewablesdirectuseinindustry...........................................................................................675.2Renewablesdirectuseinbuildings.........................................................................................675.3Renewablesdirectuseintransport........................................................................................686ENERGYCONSERVATIONANDEFFICIENCY....................................................................727HYDROGENANDITSDERIVATIVES..................................................................................768SECTORACTIONNEEDEDNOW......................................................................................818.1Buildings....................................................................................................................................818.2Transport...................................................................................................................................848.3Industry......................................................................................................................................868.4Powersector..............................................................................................................................88REFERENCES........................................................................................................................91ANNEXA.OVERVIEWOFMAINONGOINGINITIATIVESANDPLATFORMSIDENTIFIEDINCENTRALAMERICA.............................................................................................................94ANNEXB.KEYASSUMPTIONSOFTECHNOLOGYCOSTSANDFOSSILFUELPRICES............95ANNEXC.DATAREFERENCESFORTHEREMAPANALYSIS...................................................986RENEWABLEENERGYROADMAPFORCENTRALAMERICAFIGURESFigure1:ReductionofCO2emissionsthroughREmapmeasuresintheDESby2030and2050.........18Figure2:CentralAmericancountriesconsideredintheREmap-FlexToolanalysis....................................20Figure3:DescriptionofthescenariosintheREmapstudy..............................................................................21Figure4:Overviewoftheregionalelectricalinterconnectionsystem(SIEPAC)........................................22Figure6:Descriptionofinvestmentandcostsintheanalysis..........................................................................23Figure5:Rationaleforpowersectorsimulations..................................................................................................23Figure7:Powersystemflexibilityenablersintheenergysector....................................................................24Figure8:REmaptoolsforanalysisoftheend-useandpowersectors.........................................................24Figure9:Totalfinalenergyconsumptionbysector,2018.................................................................................25Figure10:Totalfinalenergyconsumptionbycountry,2018..............................................................................25Figure11:Percapitaelectricityconsumptionbycountry,2000to2050........................................................26Figure12:Percapitaregionaltotalfinalenergyconsumptionin2018andunderthePESin2030and2050..........................................................................................................................................26Figure13:AnnualcapacityinstallationsandrenewableshareingenerationinCentralAmerica,2011-2020........................................................................................................................................................27Figure14:Sharesofinstalledcapacityandelectricitygenerationbycountry,2019..................................28Figure15:SolarPVtotalinstallationcost,levelisedcostofelectricityandcapacityfactorforLatinAmericaandtheCaribbean,2010-2019.....................................................................................28Figure16:Historicalemissions(excludingland-usechangeandforestry)inCentralAmericabysector,1990-2018.........................................................................................................................................29Figure17:Historicalemissions(excludingland-usechangeandforestry)inCentralAmericabycountry,1990-2018......................................................................................................................................29Figure18:GlobalcarbonemissionsabatementunderIRENA’sWETO1.5°CScenario..............................30Figure19:Totalfinalenergyconsumptionin2018andundertheDESin2050...........................................35Figure20:Renewable,traditionalrenewableandnon-renewablesharesoftotalprimaryenergysupplyin2018andunderthePESandDESin2030and2050.....................................................36Figure21:Powersectorcumulativeinvestment(left)andcumulativeinvestment,operationsandmaintenance,andfuelcosts(right)forthe2018-2050periodunderthePESandDES..................37Figure22:Cumulativeend-usetechnologycosts,fuelcosts,andend-usetechnologyandfuelcostsforthe2018-2050periodunderthePESandDES.................................................................38Figure23:CumulativedifferencebetweenenergysystemcostsandsavingsfromreducedexternalitiesoftheDEScomparedtothePESforthe2018-2050period.........................................39Figure24:HistoricalemissionsandemissionsunderthePES(left)andDES(right),bycountryandsector,2000-2050.................................................................................................................................40Figure25:End-useandpowersectoremissionspercapitawithrespecttoGDPpercapita,bycountry,in2018andundertheDESin2050.......................................................................................41Figure26:Directelectricityconsumptionbyend-usesectorin2018andunderthePES,TESandDESin2030and2050.................................................................................................................................43Figure27:Installedgenerationcapacitybytechnologyandsharesin2018andunderthePES,TESandDESin2030and2050................................................................................................................44Figure28:Electricitygenerationbytechnologyandsharesin2018andunderthePES,TESandDESin2030and2050.................................................................................................................................44Figure29:Powergenerationinstalledcapacityandgeneration,bycountry,undertheDESin2030and2050...............................................................................................................................................45Figure30:InstalledcapacitybytechnologyinthetwointerconnectionscenariosundertheDESin2050...48TOWARDSAREGIONALENERGYTRANSITION7Figure31:ReductionofthemarginalsystempriceintheincreasedinterconnectionscenarioundertheDESin2050................................................................................................................................49Figure32:Electricityshareintotalfinalenergyconsumptionbysectorin2018andunderDESin2030and2050,andsharebycountryin2018andunderDESin2050......................................53Figure33:Energydemandbytransportsub-sectorin2018andunderthePESandDESin2030and2050..........................................................................................................................................................55Figure34:Energydemandbyenergyserviceintheresidentialandcommercialbuildingssectorin2018andunderthePESandDESin2030and2050...................................................................55Figure35:Shareofroadtransportvehiclesbytypein2018andunderthePESandDESin2030and2050...............................................................................................................................................57Figure36:ElectricvehiclestockbyvehicletypeundertheDESin2030and2050....................................57Figure37:ShareofelectricvehiclesinthefleetbycountryunderthePESandDESin2050................58Figure38:Emissionsbytransportsub-sectorin2018andunderthePESandDESin2030and2050..........................................................................................................................................58Figure39:Shareofhouseholdsusingtraditionalcookstovesbycountryin2018andundertheDESin2030and2050.................................................................................................................................61Figure40:Shareofcookingtechnologiesbytypein2018andunderthePESandDESin2050...........61Figure41:ShareofcleantechnologiesforcookingunderthePESandDESin2050.................................63Figure42:Shareofmodernrenewablesintotalfinalenergyconsumptionin2018andundertheDESin2030and2050.................................................................................................................................65Figure43:Totalfinalenergyconsumptionintheend-usesectorsbyenergycarrierin2018andunderthePESandDESin2030and2050...........................................................................................66Figure44:Demandformodernrenewablesbyend-usesectorin2018andunderthePESandDESin2050....................................................................................................................................................66Figure45:Industryenergydemandbycarrierin2018andunderthePESandDESin2050..................67Figure46:SupplycurveexampleforethanolfromsugarcaneinCentralAmerica......................................69Figure47:EnergyIntensityin2018andunderthePESandDESin2030and2050..................................72Figure48:Cumulativeemissionsfromindustryfortheperiod2018-2050underthePESandDES......73Figure49:Cumulativeenergyefficiencycostsbysub-sectorforthe2018-2050periodunderthePESandDES...........................................................................................................................................73Figure50:Stockoflargetrucksusinghydrogen,electrolysersrequiredforfuelproduction,andhydrogenstorageundertheDESin2040and2050.................................................................76Figure51:ElectricitygenerationandinstalledcapacityrequiredtoproducerenewablehydrogenbytechnologyundertheDES,2020-2050........................................................................77Figure52:Shareofhydrogenanditsderivativesusedforshippingin2050.................................................78Figure53:Hydrogenenergysupplybytransportmode,2020-2050................................................................79Figure54:Electricitysupplyandinstalledcapacityofelectrolysersthatwouldberequiredfordomestichydrogenproduction,2020-2050..................................................................................79Figure55:Buildingsenergydemandin2018andundertheDESin2030and2050,andenergysavedcomparedtothePES........................................................................................................81Figure56:Totalfinalenergyconsumptionbycarrier,emissionsandshareofrenewableenergyinbuildingsin2018andundertheDESin2030and2050..............................................81Figure57:Transportenergydemandin2018andundertheDESin2030and2050,andenergysavedcomparedtothePES........................................................................................................84Figure58:Totalfinalenergyconsumptionbycarrier,emissionsandshareofrenewableenergyintransportin2018andundertheDESin2030and2050..............................................84Figure59:Industryenergydemandin2018andundertheDESin2030and2050,andenergysavedcomparedtothePES........................................................................................................86Figure60:Totalfinalenergyconsumptionbycarrier,emissionsandshareofrenewableenergyinindustryin2018andundertheDESin2030and2050................................................87Figure61:Electricitygenerationbytechnology,emissionsandshareofrenewableenergyinthepowersectorin2018andundertheDESin2030and2050..................................................888RENEWABLEENERGYROADMAPFORCENTRALAMERICATABLESTable1:RegionalpopulationandGDP,2018,2030and2050........................................................................25Table2:Electricitysectorindicatorsbycountry,2020.....................................................................................27Table3:ContentsofNDCsofCentralAmericancountries,asofNovember2021..................................31Table4:Keyscenariopathwayfordecarbonisationoftheenergysector..................................................34Table5:AnnualaveragehistoricalandprojectedinvestmentforthePESandDES...............................36Table6:Cumulativecapitalinvestmentneedsingenerationcapacitybytechnologybetween2021and2050inthePES,TESandDES..............................................................................................46Table7:Cumulativeend-usetechnologycostsforelectrificationofend-usesectorsthe2018-2050periodundertheDES.....................................................................................................54Table8:Numberofelectricchargersbytypeandsizein2030,2040and2050undertheDES..............59Table9:Cumulativecostincookingtechnologiesintheresidentialsectorforthe2018-2050periodunderthePESandDES................................................................................................................62Table10:Residentialsolarwaterheaterunitsin2018,andin2030and2050underthePESandtheDES,andrelatedinvestmentneeds................................................................................................68Table11:Bioethanol,biodieselandbiojetconsumptionin2018andunderthePESandDESin2030and2050...............................................................................................................................................68Table12:Regionalactionsforthebuildingssector.............................................................................................82Table13:Regionalactionsforthetransportsector.............................................................................................85Table14:Regionalactionsforindustry....................................................................................................................87Table15:Regionalactionsforthepowersector...................................................................................................89Table16:Keyassumptionsoftechnologycostsandfossilfuelprices...........................................................95BOXESBox1.REmapandflexibilityanalysisandtools...............................................................................................24Box2.Transitioncostbenefitanalysis................................................................................................................39Box3.Reducingremainingemissionsinindustry(IRENA,2021b)............................................................41Box4.Innovationoutlook:Smartchargingforelectricvehicles.................................................................50Box5.Statusofbatterytechnology....................................................................................................................59Box6.SugarcanebioenergyinCentralAmerica–largeandcompetitivepotentialforenergyproductionandgreenhousegasemissionmitigation........................................................................69Box7.ThePanamaCanalandapossiblehydrogenhub..............................................................................78Box8.InsightsofcountriesandregionalinstitutionsoftheRenewableEnergyRoadmapforCentralAmericaanalysis............................................................................................................................90TOWARDSAREGIONALENERGYTRANSITION9FOREWORDIRENA’scontributiontowardsaresilientandmoreequitableworldispresentedinitsWorldEnergyTransitionsOutlookandPost-CovidRecovery:anagendaforresilience,developmentandequality.Mindfulthattheenergytransitiontakesdifferentshapesaccordingtoeachregionandcountry,IRENA’seffortsarenowmovingtowardstheimplementationoftheenergytransitionattheregionallevel.InspiredbytheWorldEnergyTransitionsOutlooktechnologicalavenues,IRENA’sRenewableEnergyRoadmapforCentralAmerica:towardsaregionalenergytransitiondivesintotheCentralAmericaregiontocontributetothedebateofimplementinglocalenergytransitionpathways.Withanintegratedenergytransitionplanningapproach,theroadmaphasaspecialfocusonevaluatingrenewableenergytechnologyoptionsinthepowerandend-usesectors.ItservesasaninputforgovernmentpolicymakersandstakeholderstoupdateordefinetheirenergyplanningandNationallyDeterminedContributionstrategies,aswellasinputsforlocalinfrastructureplansandinvestmentpackages.CentralAmericaisenteringacrucialdecadeforshapingitsfutureenergysystemandisstronglyengagedintheenergytransition.AlthoughthecontributionbytheCentralAmericancountriestotheglobalCO2emissionsin2018wasjustof0.2%,theregionstillexpectstoexperienceclimatechangeadverseeffectssuchasshiftsinprecipitationpatternsandaveragetemperaturerise.Providinguniversalaccesstoelectricityandcleancookingtechnologiesarekeychallengesthattheregionisfacing.Itsgrowingpopulationandeconomicprogresswilldriveanincreaseinenergydemandinthecomingdecades.EnergysecurityandfossilimportdependencemitigationwillbecrucialinthecontextofenergypricesvolatilityandglobalCO2pricingdiscussions.TheregionhasauniqueopportunitytodevelopasustainableenergysystembasedonrenewableenergyresourcesthatcanhelpsocioeconomicrecoveryfromtherecessioncausedbytheCOVID-19pandemic,addressclimatechangemitigationandadaptationstrategies,whileaccomplishingenergysecurity,universalisationandaffordabilitygoals.TheRenewableEnergyRoadmapforCentralAmericaprovidesacomprehensivepathwayforthedevelopmentofasustainableandcleanerregionalenergysystem.Itexplorestheroleofend-usesectorselectrification,thefeasibleexpansionofrenewablegeneration,energyefficiencysolutionsaswelltheimportanceofexpandingtheexistingregionalpowersectorintegration.Specificsectortechnologicalpathwaysandinvestmentopportunitiesandtailoractionsareimportantoutcomesthatwillenrichtheregionaldebateandhelpacceleratetheenergytransformation.TheengagementwiththeCentralAmericancountriesandthecloseco-operationwiththemandourlocalpartnersSICA,OLADE,ECLACandIDB,hasbeenkeyfortheoutcomesofthisstudy.Oursharedfuturewillonlybebrightifwemoveforwardtogether,takingeveryonealongtowardsamoreresilient,equal,andjustworld.FrancescoLaCameraDirector-General,IRENA10RENEWABLEENERGYROADMAPFORCENTRALAMERICA°CdegreesCelsiusBESBaseEnergyScenarioCO2carbondioxideDESDecarbonisingEnergyScenarioECLACEconomicCommissionforLatinAmericaandtheCaribbeanEES2030EstrategiaEnergéticaSustentable2030delospaísesdelSICA(SustainableEnergyStrategy2030ofSICAcountries)GIZDeutscheGesellschaftfürInternationaleZusammenarbeitGDPgrossdomesticproductGWgigawattGWhgigawatthourICEInternalcombustionengineIDBInter-AmericanDevelopmentBankIRENAInternationalRenewableEnergyAgencyktCO2ekilotonnesofCO2-equivalentkWkilowattkWhkilowatthourLCOElevelisedcostofelectricityLPGliquefiedpetroleumgasLULUCFlanduse,land-usechangeandforestrym3cubicmetreMtCO2emilliontonnesofCO2-equivalentMOVELatamMovilidadEléctricadeLatinoaméricayelCaribe(ElectromobilityofLatinAmericaandtheCaribbean)MWmegawattMWhmegawatthourMtmilliontonnesNDCNationallyDeterminedContributionOLADEOrganizaciónLatinoamericanadeEnergía(LatinAmericaEnergyOrganization)PESPlannedEnergyScenarioPJpetajoulePVphotovoltaicRErenewableenergyREmapRenewableEnergyRoadmapSDGSustainableDevelopmentGoalSICASistemadelaIntegraciónCentroamericana(CentralAmericanIntegrationSystem)SIEPACSistemadeInterconexiónEléctricadelosPaísesdeAméricaCentral(CentralAmericanElectricalInterconnectionSystem)TESTransformingEnergyScenarioTWhterawatthourUSDUnitedStatesdollarABBREVIATIONSTOWARDSAREGIONALENERGYTRANSITION11SHORTNAMEOFFICIALNAMECOUNTRYCODEBelizeBelizeBZCostaRicaRepublicofCostaRicaCRElSalvadorRepublicofElSalvadorSVGuatemalaRepublicofGuatemalaGTHondurasRepublicofHondurasHNNicaraguaRepublicofNicaraguaNIPanamaRepublicofPanamaPACOUNTRYCODES12RENEWABLEENERGYROADMAPFORCENTRALAMERICAKEYFINDINGSIntegratedregionalplanningfortheenergytransitioniskey,linkingenergypolicywithclimatepolicyandcountrycommitments.TheenergytransitioninCentralAmericamustfocusontransformingthetransportsectortogetherwiththepowersector.Adecarbonisationstrategycanbringbenefitstotheregionatthesametotalenergysystemcost(includinginvestment,operationandmaintenance,endusetechnologycosts,andfuelcosts)asthecurrentplanningstrategy.Regionalpowersystemintegrationshouldbefosteredandimprovedtofurtherexploitatotalrenewableenergypotentialofaround180gigawatts(GW).Nationaltransmissionanddistributiongridswillneedexpansionandreinforcementtomeetgrowingelectricityconsumptionandenablemoreefficientandreliablesystemoperation.TOWARDSAREGIONALENERGYTRANSITION13Financingfeasibilitystudiesofbankablerenewablegenerationprojectsandexpandingtheinterconnectioncapacityarevital,aswellassurveystofurthercharacterisethedemandfromend-usesectorsinthecountries.Electrificationofthetransportsectoriscrucial,aswellastheuseofbiofuelsandtheimplementationofmodalchangestodecreasetransport-relatedemissions.Improvedcookstovesandelectriccookstovesneedtoincrease8.6timesby2050comparedto2018levelstohelpachievethegoalofprovidingaccesstocleancookingtechnologiesandfuelsforallhouseholdsintheregion.Thedirectuseofmodernbioenergy,solarthermalandgeothermalcanhelpreducefossilfueluseinallend-usesectors,representingaround11%oftotalfinalenergyconsumptionby2050.Energyefficiencymeasuresandtechnologystandards,withcorrespondingcumulativeinvestmentsofaroundUSD8.7billionforthe2018-2050period,shouldbefurtherfosteredintheregiontobringenergyintensitydown43%by2050,comparedto2018levels.Greenhydrogenprovidesanalternativesolutionfordecarbonisingheavycargoroadtransportintheregion,aswellasanopportunityforacleanerenergysupplyininternationalshipping.14RENEWABLEENERGYROADMAPFORCENTRALAMERICASUMMARYAdecarbonisationstrategycanbringbenefitstotheCentralAmericaregionatthesameenergysystemcostasthecurrentplanningstrategy.Transformingtheenergysystemisanopportunitytofillexistingsocio-economicgapsandmeetincreasingneedsforenergyservicesinamoreefficient,competitiveandsustainableway.ThetotalenergysystemcostsoftheDecarbonisingEnergyScenario(DES)–includinginvestmentinnewinstalledpowercapacityandgrids,operationsandmaintenance,fuelcosts,andend-usetechnologycosts–arecomparabletoenergysystemcostsinthePlannedEnergyScenario(PES).ThesecostsreachanestimatedUSD1930billionintheDESversusUSD1950billioninthePES,fortheperiod2018-2050.Attractingtheinvestmentneededtodecarbonisetheregion’senergysystemcanfosternationaleconomiesandsupportbothCOVID-19recoveryandclimateresilience.Theinstallation,operationandmaintenanceofmoreandnewtechnologiestofulfildecarbonisationtargetswouldrequiretrainedpersonnel,leadingtothecreationoflocalemployment(IRENA,2020).Usinglocalrenewableresourcesforbothpowergenerationandend-useenergyserviceswouldreducefossilfuelconsumptioninthepowersector90%andintheend-usesectors65%by2050intheDEScomparedto2050PES.Thiswouldreducefossilfuelimportsandenhanceenergysecurity.Theuseofcleanerfuelsinthetransportandresidentialsectorsalsodecreaseslocalandhouseholdpollution.Carbondioxide(CO2)emissionsfromthepowerandend-usesectorswoulddecline72%inthe2050DEScomparedtothe2050PES.Diversifyingtheenergymixthroughcompetitiverenewableenergyandgreaterregionalintegrationwouldcontributetoreducedvolatilityinenergycosts,asthesebecomelessaffectedbyfluctuationsinthepriceoffossilfuels.Togetherwithenergyefficiency,thiswouldreducetherelativecostofenergyforconsumers,improveenergyaffordabilityandbringothermacroeconomicbenefits.Greaterdiversityintheprimaryenergysupplyandindemandmanagementsolutions(bothdistributedandutility-scale,integratedandprovidedbydifferentlocalities)alsocontributestoenhancedresiliencytoclimatechange.Integratedregionalplanningfortheenergytransitioniskey,linkingenergypolicywithclimatepolicyandcountrycommitments.Thediversebenefitsofdecarbonisationareunlikelytobegainedwithoutincreasingco-ordinationattheregionallevel.Thisimpliesjointcountryeffortsonmanyfronts,suchasdevelopinginfrastructurefortheelectrificationoftransportintheregion,expandingandreinforcinggridstotaprenewableenergypotential,andmaximisingtheuseofresourcesamongcountries.Itrequiresmakinguseofalltypesofinstruments:regionalgovernance,planning,marketimprovements,policiesandregulation.TOWARDSAREGIONALENERGYTRANSITION15TheenergytransitioninCentralAmericamustfocusontransformingthetransportsectortogetherwiththepowersector.Thekeydriversofregionaldecarbonisationareelectrificationofthetransportfleet(around75%ofthevehiclesby2050intheDES),sustainablemobilityandtheincreasingpenetrationofrenewablesinthepowersector(around90%oftotalinstalledcapacityby2050intheDES).Together,thesecancontributemostofthereductioninthetransportsectorCO2emissionsby2050intheDEScomparedwiththePES2050(around70%,equivalentto43milliontonnesofCO2).Scalinguptheannualdeploymentofrenewablesintheregionthree-fold(byaround1.4gigawatts(GW)peryear)comparedtoplanneddeploymentisrequiredinordertoincreasetherenewableenergycapacitysharefrom67%in2018tonearly75%by2030andmorethan90%by2050.UndertheDES,theshareofrenewables-basedtechnologiesinCentralAmerica’spowersectorwouldincreasefrom67%ofthetotalinstalledcapacityin2018to91%by2050;ofthisincrease,around45%wouldbevariablerenewableenergy,i.e.solarandwind.Toachievethishighrenewableshare,annualinvestmentofUSD3.5billioninnewinstalledcapacity(74%)andgrids(26%)1willbeneeded,correspondingto1.6%oftheregion’sgrossdomesticproduct(GDP)in2018.IntheDES,hydropowerwouldincreaseby350megawatts(MW)peryear,risingfrom7GWtodayto18GWin2050,reachingaround35%oftotalgeneration.Solarphotovoltaic(PV)andwind,mainlysolarPV,wouldincreaseby870MWperyear,risingfrom2GWtodayto30GWin2050toreacharound25%oftotalgeneration.Bioenergyandwastewouldreacharound20%,geothermal15%andnaturalgastheremaining5%ofgenerationin2050.Thisinstallationof59GWofrenewableenergycouldhelpdecreasetotalpowersystemcostsby7%perunitofelectricitydeliveredbetween2018and2050.2Thedeclineinpowersystemcostsreflectsthesignificantreductioninrenewablegenerationcostsobservedinthelastdecade(IRENA,2021a)aswellastheexpectedoptimalregionalsystemoperationstrategy.Inallscenarios,nationaltransmissionanddistributiongridswillneedtobeexpandedandreinforcedtomeetgrowingelectricityconsumption.Thiswillenablemoreefficientandreliablesystemoperationbyunlockingawiderrangeoftechnologiesforuse,includingdistributedenergyresourcessuchasrooftopsolar,distributedstoragesolutionsandsectorcoupling.Regionalpowersystemintegrationcouldthenbefosteredandimprovedtofurtherexploitatotalrenewableenergypotentialofaround180GW.IntheDES,increasingtheinterconnectioncapacityto2GWcanhelpscaleupthecurrentlystrandedlower-costforrenewablepowergeneration.Financingfeasibilitystudiesfordevelopingapipelineofbankablerenewablegenerationprojectsaswellasdevelopingprojectstoexpandtheinterconnectioncapacityamongcountrieswouldcontributetofullerexploitationoftheregion’savailablerenewableresources.Gridenergystoragesolutionscouldalsobeconsideredtobolstersystemflexibilityandprovidevaluablesystemservices.Acloserintegrationofmarketoperationsisrequiredtomaximisethesebenefits,whichwouldenablemoreeffectivecollectiveuseofassets.Inaddition,jointco-ordinationinregionalenergyplanningforthemediumandlongterms,includinginend-usesectorsandtheselectionofprojects,willberequiredtodevelopthesysteminthemostcost-efficientandsecureway,whichisnotpossibleifeachnationalsystemisseparatelyplanned.1Gridsincludetheinvestmentintransmissionanddistribution,SIEPACexpansionandstorage.2Calculatedastotalpowersystemcosts(investmentinnewinstalledcapacity,transmissionanddistribution,internationalgridexpansion,storage,operationsandmaintenance,andfuelcosts)dividedbytotalgeneration.16RENEWABLEENERGYROADMAPFORCENTRALAMERICAIntheDES,theshareofelectricityuseintheregion’stotalfinalenergyconsumptionwouldincreasefrom13%in2018to50%in2050.Thiswouldhelpreducethefossilfuelsharefrom50%in2018to34%in2050,withrequiredcumulativeend-usetechnologycostsofaroundUSD500billionfortheperiod2018-2050.ToreachthiselectrificationtargetintheDES,effortswillbeneededinallend-usesectors,withthegreatesttransformationintransport.Thissectorwillrequirearound97%ofthecumulativeend-usetechnologycostsinelectrification3estimatedfrom2018to2050.Theincreaseinelectricitydemandwillbeaccompaniedbyaneedtoreinforcethetransmissionanddistributiongridaswellasincreaseelectricitygeneration.Electrificationinthetransportsectorwouldbecrucial,covering77%ofthepassengerfleetand53%ofthecargofleetby2050,aspartofmitigationpoliciestodecreasesector-relatedemissions.TheCO2emissionreductionintheDES2050wouldbearound70%comparedtothatinthePES2050.Thetransportsectoristheregion’smainemitterofenergy-relatedCO2,contributingaround55%oftheestimated55milliontonnesofCO2releasedin2018.Undercurrentnationalmitigationplansandprogrammes,fossilfuelconsumptioninthesectorwouldstillbe1.8timeshigherin2050,comparedto2018levels.AfurtherreductioncouldbeachievedthroughtheapplicationofthemeasuresproposedintheDES,withtotalend-usetechnologycostsofaroundUSD485billionfortheperiod2018-2050,includingfortheelectricvehiclefleetandrelatedinfrastructure.Programmestopromoteelectricvehiclesanddeveloptherelatedinfrastructurewouldbenecessarytofosterthemarket.Thedevelopmentofcharginginfrastructure,standardsandbusinessmodelsforelectricvehiclescouldbedonejointlyatthenationalandregionallevels.IntheDES,improvedcookstovesandelectriccookstoveswouldincrease8.6timesby2050comparedto2018,tohelpachievethegoalofprovidingaccesstocleancookingtechnologiesandfuelsforall.Currently,37%ofhouseholdsintheregiondonothaveaccesstocleancookingtechnologiesandfuels.IntheDES,thissharewouldfallto1%thankstotheintroductionofimprovedcookstovesandelectricstoves,whichwouldrequiretechnologycostsofaroundUSD12.5billionduringtheperiod2018-2050.Additionalhealthandsocio-economicbenefitswouldincludereducingthepollutionfromcookingactivities,benefitingwomenandchildreninparticular.3Electrificationcostsincludetheintroductionofelectriccookstovesandspaceheatersintheresidentialandcommercialsectorsandtheintroductionofelectricvehiclesandtheircharginginfrastructure.Therefore,thetotalcostsrelatedtothetransportsectorareconsiderablyhigherthanthoserelatedtothebuildingssector.Duetothelowcharacterisationoftheindustrysector,electrificationmeasurescouldnotbedefinedintheanalysis.TOWARDSAREGIONALENERGYTRANSITION17Thedirectuseofmodernrenewables4canhelpreducefossilfueluseinallend-usesectors,representingaround11%oftotalfinalenergyconsumptionin2050intheDES.Theintroductionofmodernrenewables–i.e.modernbioenergy,solarthermalandgeothermalinindustry;solarwaterheatersforwaterheatingandmodernbiomassforcookinginbuildings;andbiofuelblendinginthetransportsector–wouldcontributetoa65%reductioninfossilfueldemandinthe2050DEScomparedtothe2050PES.Theshareofmodernbioenergyintheend-usesectorswouldincreasefromthecurrent3%oftotalfinalenergyconsumptionto7%by2050intheDES,servingasatransitionalsolutionaselectrificationisgraduallydeployedinthemainsectoralactivities.Cumulativeenergyefficiencytechnologycosts5wouldincreasefromUSD2.2billioninthePEStoUSD8.7billionintheDEStobringenergyintensitydown43%by2050comparedto2018levels,measuredastotalfinalenergyconsumptionperunitofGDP.TheenergyefficiencytechnologycostswouldtriggerfuelandelectricitycostsavingsofUSD82billionoverthe2018-2050period,whichwouldcompensatefortheupfrontcostsneeded.Definingandupdatingregionalstandardsfortheuseofefficienttechnologiesandunits–i.e.technicalcodesforairconditioning,refrigeration,lightingandmotors–couldfosterfurtherregionalintegration.Greenhydrogenisanalternativesolutionfordecarbonisingheavycargoroadtransportintheregion,aswellasanopportunityforacleanerenergysupplyininternationalshipping.Greenhydrogenisacleanfuelthatcouldbeusedtodecarbonisehard-to-abatesectorssuchastransportandindustry.Theintroductionof22300heavy-dutyhydrogentruckswasconsideredintheDESby2050,helpingtoreducefossilfueldemandmainlyincaseswhereelectro-mobilityoptionsarecomplex.Additionally,duetotheregion’sstrategiclocationandthepresenceofthePanamaCanal,thepossibilityofprovidinghydrogentofuelcargoshipsaswellasexportscouldbefurtherstudiedtobetterunderstanditsimplicationsforthesupplychainandinfrastructureneeds,consideringpotentialstakeholdersacrossLatinAmerica.KeyactionsareneedednowtoimplementtheDESandtostabilisetheincreaseinCO2emissionsinCentralAmericaby2030.By2050,theactionsindicatedcanhelptoavoidaround80milliontonnesofCO2,bringingenergy-relatedemissionsdownfromaround55milliontonnesofCO2todaytoaround30milliontonnesofCO2in2050,despiteagrowingpopulationandenergydemandneeds.Figure1illustratestheactionsandmeasuresthatwillneedtohappenthisdecadeandinthefollowingdecadestoacceleratethedecarbonisationoftheCentralAmericaregion.Thetransportandpowersectorsarethekeycontributorstothetotalemissionreductionby2050.4Directuseofmodernrenewablesincludesthefollowingenergycarriers:modernbioenergy(bagasse,biodiesel,bioethanol,biogas,biomassandcharcoal),geothermalandsolarthermal.5Cumulativeenergyefficiencycostsrefertotheincrementalcostofefficientequipmentinbuildings,mainlyairconditionersandrefrigerators,comparedtothestandardonesandtoefficiencymeasuresoftheindustrysector.18RENEWABLEENERGYROADMAPFORCENTRALAMERICAFigure1:ReductionofCO2emissionsthroughREmapmeasuresintheDESby2030and2050-80-60-40-200204060201820302050Note:PositivevaluescorrespondtoabsoluteCO2energy-relatedemissionsintherespectiveyears.NegativevaluesdepictavoidedemissionsintheDEScomparedtothePES.Resultsarecategorisedbysector.PowerDESPoweravoidedemissionsIndustryDESIndustryavoidedemissionsTransportDESTransportavoidedemissionsBuildingsDESBuildingsavoidedemissionsOthersDESOtheravoidedemissionsInstall9GWofcumulativerenewablepowerby2030,with72%ofthisbeingsolarPV,onshorewindandgeothermalContinuetodeployhydropower,with2.3GWofnewadditionsby2030Establishintegrated,regionalenergytransitionplanningforthepowerandend-usesectors(especiallytransport),consideringdigitalisationandgridexpansion,anenablingframeworkforvariablerenewableenergyandsectorcoupling(planningandregulation)Promotehighelectrificationofcars,motorcycles,andbuses,withthecorrespondingdevelopmentofcharginginfrastructure,toreachan17%electrifiedfleetby2030Usebiofuelsintransportandindustry,withblendsof5-10%by2030Deploydistributedpowergenerationinbuildings,with1.8GWofrooftopsolarPVinstalledby2030Install39GWofcumulativerenewablepowerby2050,with62%ofthisbeingsolarPV,onshorewindandgeothermalFurtherdeployhydropower,toachievea2.6foldincreasefrom2018,adding9GWfrom2030to2050Implementaregionalintegratedenergytransitionplanby2050FurtherexpandSIEPACinanoptimalmanner,installing2GWby2050Achievenear-completeelectrificationofcars,motorcycles,andbuses,plusahighshareofelectro-mobilityintheroadcargofleet(75%ofthetotalfleetelectricby2050)UsebiojetfuelinaviationImplementmodalchangemeasuresinpassengertransport(shiftingfromcarstobikesandelectricbuses)Mainactionsforthisdecade(until2030)intheDESMainactionsforsubsequentdecades(2030-2050)intheDESUsemodernbiomassforcooking,whileshiftingtowardselectrification(mainlyinhouseholds),todeployaminimumof4millionelectriccookingstovesby2030Begintodeploysolarthermalandgeothermalenergyforwaterheatinginbuildingsandindustry,toaccountfor2.4%ofthesesectors’totalfinalenergyconsumptionby2030ImplementenergyeciencyindexesforairconditioningandrefrigerationinbuildingsImplementenergyeciencyandconservationmeasuresinindustrytodecreaseenergyintensityDeveloparegionalplantoassessthemarketpotentialofagreenhydrogenhubinCentralAmericaDeveloparegionalplantoexplorebioenergyproductionopportunities,includingforinternationalmarketsIntroducegreenhydrogeninthetransportenergymixforheavy-dutytrucksExpanddistributedgenerationtocover10%ofthetotalelectricitydemandinbuildingsby2050(6.6GWofinstalledcapacityby2050)Achievemassiveelectrificationincookingandphaseouttheuseoffuelwood,deploying10.6millionelectriccookstovesby2050Furtherdeploysolarthermalandgeothermalenergyinbuildingsandindustry,toaccountfor6.5%ofthesesectors’totalfinalenergyconsumptionby2050IncreaseenergyeciencyindexesforairconditioningandrefrigerationinbuildingsIncreaseenergyeciencyandtheuseofcleanerfuels(biogas,biomass,electricity)forthermalprocessesinindustryTOWARDSAREGIONALENERGYTRANSITION191INTRODUCTION20RENEWABLEENERGYROADMAPFORCENTRALAMERICAINTRODUCTIONTheWorldEnergyTransitionsOutlook,releasedbytheInternationalRenewableEnergyAgency(IRENA)in2021,showsthatadrasticreductioningreenhousegasemissionsisneededinordertomeettheParisAgreementgoalofkeepingtheriseinglobaltemperaturewellbelow2degreesCelsius(°C).Keytothisemissionreductionoverthecomingdecadeswillbeincreasedinvestmentsintheenergytransition,includinggreaterdeploymentofrenewableenergyandchangesintheenergyinfrastructure.IRENA’srenewableenergyroadmapsprogramme,REmap,providesstrategiesfortheenergytransitionatthecountryandregionallevels,withperspectivesfor2030and2050.Theaimofdevelopingregionalstudiesistounderstandhowaregioncanpromoteanenergytransitionpathway,respectingcountries’uniqueenergyresources,socio-economicstatus,aswellasinstitutionalandregulatoryendowments,whileatthesametimecontributingtotheglobalemissionreductionobjectiveandleveragingopportunitiestomeetregionalenergyandinvestmentgoals.CentralAmericaisamongtheregionsconsideredintheongoingworkofIRENA’sREmapprogramme.1.1FOCUSOFTHEREPORTThisreportevaluatestheintegrationofrenewableandlow-carbontechnologiesintotheend-useandpowersectorsofsevenCentralAmericancountries(Figure2),includingaflexibilityanalysisoftheregionalpowersystem.Thisanalysisservesastechnicalguidancethatcansupportthedecision-makingprocessofpolicymakers,energyplanners,governmentinstitutionsandtheprivatesectortodefinelow-carbondevelopmentintheregion.Thefindingscancastlightonthedesign,elaborationandimplementationofenergyplans,NationallyDeterminedContributions(NDCs),nationalmitigationplansandinvestmentplansthatareongoingorinthepipeline.Low-carbondevelopmentisalsoacornerstoneofthepost-COVID-19recoverystrategiesofgovernmentsintheregion.Thestudycontributestoongoingdiscussionsontheenergytransitionintheregion,andrelatedinitiatives.Theseinclude,amongothers:the2030SustainableEnergyStrategyforcountriesintheCentralAmericanIntegrationFigure2:CentralAmericancountriesconsideredintheREmap-FlexToolanalysisBelizeRepublicofCostaRicaRepublicofElSalvadorRepublicofGuatemalaRepublicofHondurasRepublicofNicaraguaRepublicofPanamaDisclaimer:Thismapisprovidedforillustrationpurposesonly.BoundariesandnamesshowndonotimplytheexpressionofanyopiniononthepartofIRENAconcerningthestatusofanyregion,country,territory,cityorareaorofitsauthorities,orconcerningthedelimitationoffrontiersorboundaries.TOWARDSAREGIONALENERGYTRANSITION21System(SICA)6(SICA,2020);SICAprogrammesrelatedtotherationaluseoffuelwood,thedeploymentofgeothermalenergyandenergyefficiency(i.e.regionaltechnicalcodesforelectricdevices)(COMIECO,2020);theMOVEplatform(MOVELatam,2021);thegeothermalprogrammeofGermany’sDeutscheGesellschaftfürInternationaleZusammenarbeit(GIZ)(GIZ,2020);anelectro-mobilityprogrammesupportedbytheUnitedNationsEnvironmentProgramme;Euroclima+;aswellasprogrammestofostertheuseofbiofuels,nationaldecarbonisationplansandtheNDCrevisionprocess(seetheAnnexformoreinformationontheseinitiatives).Theengagementprocessforthisanalysisincludedseveralmultilateralandbilateralmeetingswithinternationalandregionalentitiesaswellascountry-basedrepresentativesandenergyspecialists,throughoutdifferentstagesoftheproject.Theoutcomesincluded:providingavisionandstrategiesforanenergytransformationpathway;proposingtechnologiesapplicabletotheenergysupplyandend-usesectors,whilerespectingthecontext,statusandcharacteristicsofeachcountryandtheregion,consideringactivity-levelparametersandinvestmentneeds;identifyingdataandinformationgapsandprovidingrecommendations;andsupportingthedevelopmentofenergytransitionstrategiesthroughworkshopsandoutreachandtheprovisionofinputstotheenergysectorNDCprocesses.1.2METHODOLOGYTheanalysisofeachcountryincludedfourenergyscenarioscoveringtheperiod2018-2050,asdescribedinFigure3.Toanalysetheend-usesectors,abottom-upapproachwasimplementedusingatooldevelopedbytheREmapteam.ThepowersectorwasmodelledinMESSAGE,andaflexibilityassessmentwasperformedusingIRENA’sFlexToolproduct(Box1).6Theobjectivespresentedinthe2030SustainableEnergyStrategyforcountriesintheCentralAmericanIntegrationSystem(SICA)weredefinedforthesevenCentralAmericancountriesandDominicanRepublic.Figure3:DescriptionofthescenariosintheREmapstudyBaseEnergyScenario(BES)TheBESreflectstheexistingpoliciesofeachcountryandtheregionasofaspecifiedbaseyear,maintainingthistrendintothelongterm.Itassumesthatnonewpoliciesareappliedintheyearsleadingupto2050(similartoa"business-as-usual"scenario).PlannedEnergyScenario(PES)ThePESreflectsthecurrentplansandotherexpectedobjectivesandpolicies(mainlyapprovedasofthebaseyearoftheanalysis)ofeachcountryandtheregion.SuchplansincludetheNDCssubmitteduptoDecember2020undertheParisAgreement.TransformingEnergyScenario(TES)TheTESdescribesanambitiouspathwayforeachcountryandtheregionintermsoftechnologymaturityandinvestment.Itischaracterisedbyrenewableenergyexpansion,energyefficiency,andnewtechnogiesandcarriers,atapacethatmeetsclimatetargets.DecarbonisingEnergyScenario(DES)Amoreambitioustransformingscenario,theDESdiscussesalternativestofurtherreduceCO2emissionsintheenergysystem,asmuchastheenergycontextofcountriesallows,inadditiontosuggestionsprovidedduringtheengagementprocess.Thisisnotnecessarilyanetzeroscenarioby2050.Howcanenergytransformationimprovethechallengesfacingtheregion?Whatwouldbethebestenergytransformationstrategyintheregion?Whatarethegaps?Whichbenchmarksshouldbefollowed?Whichsectoristhemostrelevanttoprioritise?Whatistheroleofregionalenergyintegration?Isitpossibletoincreasetheelectrificationofactivitieswithrenewablesintheregion?Whatistheroleofvariousrenewableenergycarriers?22RENEWABLEENERGYROADMAPFORCENTRALAMERICACentralAmerica’spowersectorisintegratedthroughanelectricalinterconnectionsystemknownasSIEPAC,whichentailsasingle230-kilovoltcircuittransmissionlinewithacapacityof300megawatts(MW)coveringsixcountries(Figure4).IRENA’spowersectorsimulationwasguidedbytwomainquestions:1)Whatistheroleoftheinterconnectionsystemandregionalintegrationinunlockingthepotentialbenefitsofajointenergytransitionstrategy,withallcountriesonboardasasinglemarket?and2)Howresilientwouldthenewsystembetodryperiodsandtothevolatilityoffuelprices?Totheextentpossible,thestudyfocusedonmodellingtheregion’soperationasanindependentpowersystemratherthanasonethatisreliantonitsnorthernorsouthernneighbours,giventhatthesecountrieswereoutsidethescopeofthestudyandthatsuchanalysiswouldbestbeanalysedinafullyintegratedstudy.Thepowersystemmodellingwasperformedtodelivertheseandrelatedinsights.Figure4:Overviewoftheregionalelectricalinterconnectionsystem(SIEPAC)SIEPACLINE,FIRSTREGIONALTRANSMISSIONSYSTEM300MWOFCAPACITY+300MW28BAYSIN15SUBSTATIONSOPGWCABLEOF36FIBRESLINEROUTEAT230KVINTERCONNECTIONSUBSTATIONNATIONALSUBSTATIONCOUNTRYkmsGuatemala293ElSalvador286Honduras269Nicaragua307CostaRica493Panama150Total1799INCLUDESPREVIEWFORTHESECONDCIRCUITSource:(GlobalInfrastructureConnectivityAlliance,2017)Disclaimer:Thismapisprovidedforillustrationpurposesonly.BoundariesandnamesshowndonotimplytheexpressionofanyopiniononthepartofIRENAconcerningthestatusofanyregion,country,territory,cityorareaorofitsauthorities,orconcerningthedelimitationoffrontiersorboundaries.Thepowersectorsimulationsspanfourpillars,asdescribedinFigure5.Theseare:1)showingwhattheplannedcapacityandpresent-dayinterconnectionwoulddeliverintheBaseEnergyScenario(BES)andinthePlannedEnergyScenario(PES)to2050;2)showingwhatcanbeachievedintheTransformingEnergyScenario(TES)andtheDecarbonisingEnergyScenario(DES)throughthedeploymentofrenewableenergyprojectstodisplacefossilfuelunits,whileconstrainedbypresent-dayinterconnectionlevels;3)showingwhatcanbeachievedwithhigherlevelsofinterconnectioninallfourscenarios;and4)showinghowthedevelopedscenariosrespondoperationallytochangesintheavailabilityofrenewablesandinfuelprices.TOWARDSAREGIONALENERGYTRANSITION23Theanalysisofthedifferentpowersectorcasesfoundthatexpandingthelevelofinterconnectionisakeyenablingtechnologyforahighshareofrenewableenergyinthepowersectorandthereduceddeploymentoffossilfuelprojects.Thus,maintainingtheexisting300MWinterconnectionsystemoutto2050andallplannedfossilfuelprojectswasconsideredonlyfortheBESandPEScases.ForthemoreambitiousTESandDEScases,thisinterconnectionwasexpandedto2gigawatts(GW),withfewerfossilfuelprojectscommissionedby2050inordertofacilitatetheeffectiveintegrationofrenewablesandenablecost-efficientsystemoperation.Theflexibilityoftheelectricalsystem,assessedusingIRENA’sFlexTool,consideredtheroleofhydropower,storagesolutions,smartchargingofelectricvehiclesandtheintroductionofhydrogentotheenergymix.Forthelatter,asupplementaryanalysiswasdoneconsideringhydrogen’sapplicationinroadcargotransportandinternationalshippingthroughthePanamaCanal.Theenergyassessmentoftheregionwascomplementedwithananalysisofinvestmentneedsandthecostsassociatedwithvarioustechnologiesintheend-usesectors(Figure6).Investmentneedsrefertotherequiredinvestmentininstalledcapacityandgridsinthepowersector,andend-usetechnologycostsrefertothetechnologyacquisitioncostsinthebuildings,transportandindustrysectors.TheREmaptoolusedfortheenergyanalysisalsoallowsforcalculatingtherelatedcarbondioxide(CO2)emissionsofcountriesandtheirevolutionundertheproposedscenarios.Figure6:DescriptionofinvestmentandcostsintheanalysisInvestmentEnd-usetechnologycostsOperationandmaintenancecostsFuelcostsCapitalrequiredforthenewinstalledcapacityandgridsinthepowersectorAcquistionorpurchasecostsoftechnologiesintheend-usesectorsRelatedtocarriersusedinthepowerandendusesectorsRelatedtooperationandmaintenanceinthepowersectorThisreportincludestheenergyassessment,investment,costsandemissionsresultsfortheend-useandpowersectors.BoththePESandtheDESarehighlighted,whereastheTESandtheBESarediscussedmainlyinthosecasesrelatedtothepowersector.Furtherdetailispresentedinanonlinecontentofthestudyshowingmorecountryinformationandscenarioresults.Figure5:RationaleforpowersectorsimulationsTES/DESExistingplansHigherrenewabledeploymentTestingresilience–jointregionalrenewableexpansionJointregionalrenewableexpansionBES/PESBES/PES/TES/DESBES/PES/TES/DESRelevantscenarios:Relevantscenarios:Relevantscenarios:Relevantscenarios:•Existing300MWSIEPAC•Existingpipelineofrenewableenergyprojectsineachcountry•Fossilfuelexpansionbasedonnationalplans•Limitedexchangebetweenmarketplayers–countries•Existing300MWSIEPAC•Expandingpipelineofrenewableenergyprojectsineachcountry,displacingfossilfuelexpansionaswellasadditionalelectricityconsumption,duetoelectrificationofend-uses•Limitedexchangebetweenmarketplayers–countries•SIEPACcapacityupto2000MWby2050•Additionalexpansionofrenewablecapacitybasedonanoptimalexpansionoftheinterconnection,simulatedtocovertheincreasingelectrificationoftheregion•Norestrictiononimportsandexportsfrommarketplayers–countries•Whatistheimplicationofnaturalgaspricesfortherobustnessoftheresults?•Whatistherobustnessoftheresultstoadryperiodintheregion?24RENEWABLEENERGYROADMAPFORCENTRALAMERICABox1.REmapandflexibilityanalysisandtoolsTheREmapActivityToolisasoftwareapplicationusedtodevelopenergyscenariosatthecountryandregionallevels.ItwasdevelopedbyIRENA’sREmapteamandisfullybasedinExcelinitscurrentversion.Whilethetoolisdesignedprimarilyforenergyanalysis,italsoallowsfortheestimationofgreenhousegasemissions–specifically,CO2basedonvaluesfromtheIntergovernmentalPanelonClimateChange(IPCC)–usingemissionfactorstoconvertenergyflowstoemissionflows.Thetoolapproachesenergymodellingfromtheactivitylevelsindifferentsectors,sub-sectorsandenergyservices.Activity-levelinformationisusedtoestimatefullenergybalancesandemissions.Becausethetoolappliesasimilarrationaleforallsectors/sub-sectorstoestimateenergyconsumption,numerousindependentanalysesareneeded(oneforeachsector/sub-sector).TheIRENAFlexTool,developedwiththeVTTTechnicalResearchCentreofFinlandLtd.,performspowersystemflexibilityassessmentsbasedonnationalcapacityinvestmentplansandforecasts.Thetoolassessmentsreflectfullpowersystemdispatchandofferadetailedviewofflexiblegenerationoptions,demandflexibilityandenergystorage,alongwithsector-couplingtechnologiessuchaspower-to-heat,electricvehiclesandhydrogenproductionthroughelectrolysis(Figure7)(IRENA,2018).Figure8showstheinteractionofthedifferenttoolstoperformenergyanalysesoftheend-useandpowersectors,aswellasestimationsofinvestmentandCO2emissions,fortheregionalassessment.Figure7:PowersystemflexibilityenablersintheenergysectorHTransmissionDistributionPowerSystemFlexibilitySectorcouplingStorageGas(e.g.Hydrogen)HeatElectricVehiclesGenerationDemand-SideManagementSource:(IRENA,2018)Figure8:REmaptoolsforanalysisoftheend-useandpowersectorsREmapToolkit•End-usesectorsanalysis•Energyandemissionsbalance•Stockturnovermodel•Capitalanalysisperend-usesector,perscenario•CarrierexpenditureEnergyAnalysis•PossibleSoftware:MESSAGE,FlexTool,PLEXOS,etc.ActivityToolAggregationframeworkEnergysupplyresultsareaggregatedintheActivityTooltohaveabigpictureofthecountry’senergysectorActivityToolInvestmentToolExpansionoptimisationmodelandflexibilityanalysisTOWARDSAREGIONALENERGYTRANSITION251.3ENERGYTRANSITIONGOALSANDRECENTPROGRESSIn2018,CentralAmericawashometoaround48millionpeople,witharegionalgrossdomesticproduct(GDP)ofnearlyUSD225billion.Basedonthedataprovidedbycountriesforthisstudy,by2050theregion’spopulationwillincreaseto65millioninhabitantsandregionalGDPwilldouble,increasingatacompoundannualgrowthrateof2.8%(Table1).Totalfinalenergyconsumptionintheregionwasaround1245petajoules(PJ)in2018,withthebuildingssectorbeingthemajorconsumer,followedbythetransportsector(Figure9).Bycountry,Guatemalawasthehighestenergyconsumer,accountingfor47%ofthetotal,whileBelizewasthelowest,atonly1%(Figure10).Figure9:Totalfinalenergyconsumptionbysector,2018TransportIndustryBuildingsAgriculture,fishingandmining1%37%47%15%Figure10:Totalfinalenergyconsumptionbycountry,2018PanamaNicaraguaHondurasGuatemalaElSalvadorCostaRicaBelize9%14%11%1%14%10%41%Table1:RegionalpopulationandGDP,2018,2030and2050STATUSANDPERSPECTIVES201820302050Population[Million]485565GDP[MillionUSD-2010]224753297439541737GDPpercapita[USD/capita]47035419833526RENEWABLEENERGYROADMAPFORCENTRALAMERICAPercapitaannualelectricityconsumptionintheregionhasincreasedoverthelasttwodecades(Figure11),reachinganaverageof1390kilowatthours(kWh)in2018;thisisaroundone-fifthofthepercapitaelectricityconsumptioninmembercountriesoftheOrganisationforEconomicCo-operationandDevelopment(OECD).Percapitatotalfinalenergyconsumptionintheregionwasanestimated26gigajoulesin2018andisexpectedtoincrease7%by2030and27%by2050undercurrentnationalenergypolicies(thePES)(Figure12).Thesedemographicandenergystatisticsdemonstratetheneedforintegratedenergyplanningnotonlyonthesupplyside(tocoverrisingenergydemandinanoptimalway),butalsointheend-usesectors,ensuringtherationaluseofenergywhilealsoconsideringpotentialenvironmentalandsocio-economicimpacts.Figure11:Percapitaelectricityconsumptionbycountry,2000to2050010002000300040005000600070008000205020402030202020102000Electricityconsumptionpercapita(kWh/capita)PanamaNicaraguaHondurasGuatemalaElSalvadorCostaRicaBelizeSource:(ECLAC,2021)forvaluesuntil2020,PESfor2030-2050.Figure12:Percapitaregionaltotalfinalenergyconsumptionin2018andunderthePESin2030and205005101520253035201820302050Energyconsumptionpercapita(GJ/capita)TOWARDSAREGIONALENERGYTRANSITION27Althoughcountriesintheregionhavereachedhighsharesofelectricityaccess(Table2),effortsarestillneededtoreachthetargetof100%accessby2030,assetbyregionalbodies.Table2:Electricitysectorindicatorsbycountry,2020COUNTRYACCESSTOELECTRICITYINSTALLEDCAPACITYELECTRICITYGENERATIONELECTRICITYPEAKDEMANDBelize95%159MW364GWh103MWCostaRica99%3537MW11534GWh1738MWElSalvador98%2312MW5811GWh1010MWGuatemala92%4109MW11122GWh1787MWHonduras85%2817MW9001GWh1618MWNicaragua97%1600MW3333GWh689MWPanama94%4132MW10721GWh1969MWNote:GWh=gigawatthours.Source:(ECLAC,2021).Ascountrieshaveaddedrenewableenergycapacity,theshareofrenewablesinthecentralisedelectricitygenerationsystemhasremainedabove55%forthepastdecade(Figure13).In2019,renewableenergyaccountedformorethan50%oftotalgenerationintheregion,withmuchhighersharesinindividualcountriessuchasCostaRica(nearly87%renewablegeneration)(Figure14).Figure13:AnnualcapacityinstallationsandrenewableshareingenerationinCentralAmerica,2011-20200%10%20%30%40%50%60%70%80%90%02004006008001000120014001600201220132014201520162017201820192020ShareingenerationAnnualinstalledcapacity(MW/year)AdditionsNon-REAdditionsREShareREingenerationNote:Theregionsawmajoradditionsinhydro(295MW),onshorewind(355MW),biomass(260MW)andsolarPV(520MW)in2015;andinhydro(727MW)andbiomass(316MW)in2016.Note:RE=renewableenergySource:(ECLAC,2021)28RENEWABLEENERGYROADMAPFORCENTRALAMERICAFigure14:Sharesofinstalledcapacityandelectricitygenerationbycountry,201987%70%67%66%64%62%58%56%46%13%31%34%34%36%38%42%44%54%0%20%40%60%80%100%InstalledcapacitysharesInstalledcapacitycompositionin201999%70%66%61%58%55%55%53%52%1%30%34%39%42%45%45%47%48%0%20%40%60%80%100%GenerationsharesGenerationcompositionin2019CostaRicaGuatemalaElSalvadorSIEPACHondurasBelizeSICAPanamaNicaraguaCostaRicaGuatemalaElSalvadorSIEPACHondurasBelizeSICAPanamaNicaraguaRenewableNon-renewableSource:(ECLAC,2021)Theintegrationofadditionalrenewableenergycapacityinthepowersectorsofcountriesisfeasible,consideringthecompetitivegenerationcostsanddecliningcosttrendsforthemainrenewabletechnologiesinstalledintheregion:hydro,onshorewindandsolarPV.Theweighted-averagelevelisedcostofelectricity(LCOE)forlargehydropowerplantsinCentralAmericaandtheCaribbeanreachedaroundUSD0.10/kWhintheperiod2016-2020.Foronshorewindpower,installationcostsfell23%inthelastdecadetoUSD2060/kWin2020,andtheLCOEfell38%toUSD0.059/kWhIRENA.(2021a),“RenewablePowerGenerationCostsin2020.”SolarPVhasbeendeployedevenmorewidelyacrosstheregion–withadditionsofaround150MWannuallybetween2015and2020(ECLAC,2021)–andhasexperiencedmajorcostreductions.ForallLatinAmericanandCaribbeancountries,totalsolarPVinstallationcostsfell80%inthelastdecadetoUSD1300/kWin2019,whiletheLCOEfell84%toUSD0.078/kWh(Figure15).Figure15:SolarPVtotalinstallationcost,levelisedcostofelectricityandcapacityfactorforLatinAmericaandtheCaribbean,2010-201901000200030004000500060007000SolarPVweightedaverageinLatinAmericaandtheCaribbeanSolarPVglobalweightedaverage2019USD/kW20112012201320142015201620172018201910%12%14%16%18%20%22%24%26%0.000.050.100.150.200.250.300.350.400.450.502019USD/kWh201120122013201420152016201720182019201120122013201420152016201720182019CapacityfactorTotalinstallationcostLCOESource:IRENARenewablecostdatabase.TOWARDSAREGIONALENERGYTRANSITION29Inarecentexampleofcompetitiveprocurementintheregion,Panamaheldashort-termrenewableenergyauctioninmid-August2021thatresultedinapricerangeforlargehydropoweroffersofbetweenUSD0.0584/kWhandUSD0.075/kWh,andforsolarPVofbetweenUSD0.0595/kWhandUSD0.083/kWh.ThelowestofferattheauctioninonshorewindwasatUSD0.09/kWh(EnergíaEstratégica,2021).In2018,CentralAmericacontributedjust0.3%ofglobalgreenhousegasemissions(ClimateWatch,2021).However,theregion’semissionshavegraduallyincreasedsince1990(ClimateWatch,2021).Agriculturecontributedthehighestshareofemissionsinthe1990s,andthesector’semissionsincreasedslightlyuntil2018.Inrecentdecades,emissionsfromtheenergysectorhaveincreasedmorerapidlytobecomethehighestcontributingsector.Thelargestsourcesoftheseemissionswerethetransportsector,bunkerfuels,andelectricityandheatproduction,highlightingtheneedforgreaterfocusonthesesub-sectors(Figure16).HistoricalemissionsbycountryareshowninFigure17.Figure16:Historicalemissions(excludingland-usechangeandforestry)inCentralAmericabysector,1990-20181990199219941996199820002002200420062008201020122014201620180306090120150TransportationOtherFuelCombustionManufacturing/ConstructionFugitiveEmissionsElectricity/HeatBuildingWasteIndustrialProcessesBunkerFuelsAgricultureEmissions(MtCO2eq)Source:(ClimateWatch,2021)Figure17:Historicalemissions(excludingland-usechangeandforestry)inCentralAmericabycountry,1990-20181990199219941996199820002002200420062008201020122014201620180306090120150PanamaNicaraguaHondurasGuatemalaElSalvadorCostaRicaBelizeEmissions(MtCO2eq)100%growth(2018vs1990)Source:(ClimateWatch,2021)30RENEWABLEENERGYROADMAPFORCENTRALAMERICASeveralcountriesinCentralAmericaaredevelopingtheirnewenergyplansandenergytransitionagendasundertheframeworkoftheUnitedNationsSustainableDevelopmentGoals(SDGs),withtheaimofachievingcleanandaffordableenergyfortheirpopulations(SDG7)whilealsoconsideringtheimpactsoftheenergysectoronsocio-economicopportunitiessuchaspromotinglocaljobsandeconomicgrowth(SDG8)andenhancingtheroleofwomen(SDG5).Thecountriesarealsoassessingthecontributionoftheenergysectortogreenhousegasinventoriesaswellasdefiningpoliciestodecreaseemissions(SDG13)aspartofdecarbonisationplansandtheprocessofsubmittingNationallyDeterminedContributions(NDCs)towardsreducingemissionsundertheParisAgreement.InthecontextoftheCOVID-19pandemic,energytransitioninitiativesconstituteafundamentaldriverforthesocialandeconomicrecoveryoftheregion,whichhasalsobeenaffectedbyrecentenvironmentalevents(hurricanesEtaandIota,November2020)(PAHO,2020).Thissuggeststheneedtodevelopinfrastructureandnationalplansthatareresilienttoclimatechangeandarestrengthenedbygreaterregionalintegrationofresourcedevelopmentandmanagement.Ajointefforttoreduceregionalemissionswouldbebeneficialtoallcountriesandcouldrepresentanopportunitytocreatearegionalcleanenergyindustryandenhanceoverallco-operationamongcountries.Toreduceenergy-relatedemissionsintheregion,particularlyintheemission-intensivetransportandpowersectors,countriesneedtopromotetheuseofrenewablesandfosterenergyefficiencyandelectrification,amongothersteps.Figure18shows,atagloballevel,howeachoftheseactionlineswouldcontributetoreducinggreenhousegasemissionsinlinewiththeParisAgreementgoalofkeepingglobaltemperaturerisebelow1.5°C(IRENA,2021b).Figure18:GlobalcarbonemissionsabatementunderIRENA’sWETO1.5°CScenarioAbatements20506%Renewables(poweranddirectuses)EnergyconservationandeciencyElectrificationinendusesectors(direct)BECCSandothercarbonremovalmeasuresHydrogenanditsderivativesCCSandCCUindustry20%10%25%25%14%-36.9GtCO2/yrSource:(IRENA,2021b)CountriesinCentralAmericahavebeentakingstepsinthatdirection,submittingNDCsthatincludetargetsforincreasedrenewableenergyintegrationinthepowersector,aswellasdecarbonisationplansforend-usesectorsthataimtoachieveemissionreductionsby2030or2050.Table3summarisesthecountries’progresstowardsimplementingtheParisAgreementandprovidesanoverviewoftheelementscoveredinrelatedNDCdocumentssubmittedtotheUnitedNationsFrameworkConventiononClimateChange(UNFCCC)asofNovember2021.BesidesnationalplansandtheNDCssubmittedbymostofthecountriesconsideredintheanalysis,regionalinitiativesarebeingpursuedonsimilartopics,suchasthedeploymentofnewandcleanerenergyresources,electro-mobility,energyefficiencyandexpansionoftheelectricgrid,amongothers.Theseprogrammesarealreadycontributingtotacklingseveralchallengesintheregion,suchasreducingfossilfuelimportsanddecreasinglocalandhouseholdpollution.TOWARDSAREGIONALENERGYTRANSITION31Table3:ContentsofNDCsofCentralAmericancountries,asofNovember2021COUNTRYMITIGATIONTYPECOVERAGESECTORALSCOPEMITIGATIONTARGETMITIGATIONDETAILSBelizeRelativeemissionreductionEconomy-wideEnergy,Transport,Waste,LUCF,AgricultureTargetsareestimatedtoavoidacumulativeemissionstotalof5647ktCO2ebetween2021and2030•ReduceGHGemissionsandincreaseGHGremovalsrelatedtolandusechangetotalling2053kilotonnesofCO2-equivalentcumulative(ktCO2e-cumulative)overtheperiodfrom2021to2030.•Enhancethecapacityofthecountry'smangroveandseagrassecosystemstoactasacarbonsinkby2030,throughincreasedprotectionofmangrovesandbyremovingacumulativetotalof381053ktCO2ebetween2021and2030throughmangroverestoration.•Reducemethaneemissionsfromlivestockby10%by2030andavoidemissionsofatleast4.5ktCO2erelatedtoagriculturallydrivenlandusechangeby2025•Avoidemissionsfromthepowersectorequivalentto19053ktCO2e/yearthroughsystemandconsumptionefficiencymeasuresamountingtoatleast100GWh/yearby2030•Avoid44053ktCO2einthenationalelectricitysupplyby2030throughtheintroductionofexpandedcapacityfromrenewableenergysources•Avoid117053ktCO2e/yearfromthetransportsectorby2030througha15%reductioninconventionaltransportationfueluseby2030andachieve15%efficiencyperpassenger-andtonne-kilometrethroughappropriatepoliciesandinvestments•Improvewastemanagementprocessestoavoidemissionsofupto18053ktCO2e/yearby2030,inlinewiththenationalwastemanagementstrategyCostaRicaAbsoluteemissionreductionEconomy-wideEnergy,agriculture,transport,waste,LULUCF,industry9.11MtCO2eby2030;106.5MtCO2ebetween2021and2030•Committedtoanetemissionlimitof9.1milliontonnesofCO2-equivalent(MtCO2e)by2030,whichincludesallgasesandallsectorscoveredbytheNationalGreenhouseGasInventoryreport.Thisgoalisconsistentwiththecountry’slong-termPlanNationalDecarbonisationStrategy,presentedin2019,whichcallsfornetzeroemissionsby2050,aswellasthe1.5°Ctrajectory.•Committedtoanetemissionsbudgetof106.5MtCO2efrom2021to2030,whichincludesallgasesandallsectorscoveredbytheNationalGreenhouseGasInventory.32RENEWABLEENERGYROADMAPFORCENTRALAMERICACOUNTRYMITIGATIONTYPECOVERAGESECTORALSCOPEMITIGATIONTARGETMITIGATIONDETAILSElSalvadorRelativeemissionreductionEconomy-wideEnergy,agriculture,transport,LULUCF46%reduction(unconditional),61%reduction(conditional)•InOctober2016,establishedagoalofa46%reductioningreenhousegasemissionsrelativeto“businessasusual”(growthwithoutspecificmitigationactions).Thecountrycouldachieveafurther15%reductioniffinancialsupportisobtainedtodevelopanadditional92MWofgeothermalgeneration.GuatemalaAbsoluteemissionreductionEconomy-wideEnergy,agriculture,transport,waste,LULUCF,industry11.2%reduction(unconditional),22.6%reduction(conditional)•Unconditional:Reducegreenhousegasemissions11.2%from2005levelsby2030.Thisimpliesthatprojectedbusiness-as-usualemissionsof53.85MtCO2ein2030wouldbereducedto47.81MtCO2e.•Conditional:Reduceemissionsevenmoreaggressively,upto22.6%from2005levelsby2030.Thisimpliesthatprojectedbusiness-as-usualemissionsof53.85MtCO2ein2030wouldbereducedto41.66MtCO2e.HondurasRelativeemissionreductionEconomy-wideEnergy,agriculture,transport,waste,industry16%reductionexceptforLULUCF•Committedtoreduceemissions16%by2030relativetoabusiness-as-usualscenario,excludingLULUCF.•Committedtopromotingthe“conservationandfunctionalrestorationoftherurallandscape”,withagoalofrestoring1.3millionhectaresofforestby2030.•Committedtoreducinghouseholdfuelwoodconsumption39%by2030,helpingtoslowdeforestation.NicaraguaPoliciesandactionsN/AEnergy,LULUCF65%renewableelectricity•Increasetheshareofrenewableelectricitygenerationto65%by2030.PanamaRelativeemissionreductionEconomy-wideEnergy,LULUCFInenergysector,11.5%emissionsreductionby2030and24%by2050•Achieveaminimum24%reductionintotalenergy-sectoremissionsby2050andaminimum11.5%reductionby2030,comparedtothetrendscenario.•Committedtorestoring50000hectaresofforest,resultingintheabsorptionofaround2.6MtCO2eby2050.Table3:ContentsofNDCsofCentralAmericancountries,asofNovember2021(continued)TOWARDSAREGIONALENERGYTRANSITION332THEROADMAPFORCENTRALAMERICA34RENEWABLEENERGYROADMAPFORCENTRALAMERICATHEROADMAPFORCENTRALAMERICA2.1RENEWABLEENERGYROADMAPIntheREmapanalysisforCentralAmerica,aseriesofscenariosweredevelopedthatprovideinnovativeandalternativedecarbonisingsolutionswhilegraduallyincreasingcountryambitions.Thescenariostakeintoaccountthecurrentsituationofthecountriesintermsoftheireconomicevolution,energyintensity,nationalandregionalpowersectorcontexts,andongoinginitiatives,plansandpledgestotacklesectoralemissions.Thescenariosoutlineasetofmeasuresandassesstheirimpactsonenergyandemissionswhilealsodeterminingtheinvestmentandcostsrequired.Themeasuresaregroupedinfivecategories,followingselectedactionlinesofIRENA’sWorldEnergyTransitionsOutlook(IRENA,2021b)thatareapplicabletotheregion.Thecategoriesarerenewablesinthepowersector,renewablesdirectuseinend-usesectors,electrificationintheend-usesectors,energyconservationandefficiency,andhydrogen.Withinthesefivecategories,Table4summarisesthekeyindicatorsoftheDES–thedecarbonisingpathwayfortheregion’senergysector–andcomparesthemtocurrentenergysectorplans(thePES),withperspectivesto2030and2050.Table4:KeyscenariopathwayfordecarbonisationoftheenergysectorINDICATORHISTORICALPESDES20182030205020302050RenewablesinthepowersectorRenewableenergyshareinpowergeneration(%)70%66%59%82%97%AnnualsolarPVadditions(MW/yr)-145280375780Annualhydroadditions(MW/yr)-135130190355RenewablesdirectuseinendusesectorsShareofmodernrenewablesinTFEC(%)5%4%4%9%15%Solarthermalcollectorsinresidentialhouseholds(thousandunits)9.2413205342803ModernbioenergyinTFEC(PJ)3654737185ElectrificationintheendusesectorsShareofelectricityinTFEC(%)13%16%23%22%49%Passengerelectricvehiclesontheroad(millionunits)0.00.32.92.318.8EnergyconservationandefficiencyEnergyintensityintermsofenergydemandperGDP(TJ/millionUSD)5.55.14.04.22.3HydrogenNumberofhydrogenheavydutytrucks(units)0N/AN/A11904830Note:TFEC=totalfinalenergyconsumption;TJ=terajoule.TOWARDSAREGIONALENERGYTRANSITION35IntheDES,theshareofelectricitygenerationfromrenewableenergysourceswouldgrowfromaround70%in2018to97%in2050,drivenmainlybycapacityadditionsinsolarandhydropower.7Astheshareofrenewablegenerationgrows,sotoodoestheshareofelectrificationintheend-usesectors.IntheDES2050,nearly50%ofdemandintheend-usesectorswouldbecoveredbyelectricity(Figure19).Electrificationofthetransportfleetwouldbeessentialtomeetthisshare.TherenewableenergyshareinthetotalprimaryenergysupplyincreasesmorerapidlyintheDESthaninthePES,reaching62%inthe2050DES(Figure20).Renewablesdirectuseintheend-usesectorswouldcontributetofurtherreducingtheuseoffossilfuelsandtheirassociatedCO2emissions.Relevanttechnologiesincludetheintroductionofsolarwaterheatersinbuildingstocoverwaterheatingneeds,andtheuseofbioenergyinindustrytosupplyheatforlow-temperaturethermalprocesses,amongothers.Theuseofbioenergycouldbefurtherexploredwiththeintroductionofbiofuelsandbiomass,amongothers.Theimplementationofenergyefficiencymeasuresandtheintroductionofmoreefficienttechnologieswouldalsohaveanimportantimpact,reducingtheenergyintensitybyhalfin2050undertheDESandthusreducingtheamountofenergyresourcesneededtocoverregionalenergyneeds.Innovativetechnologiessuchastheintroductionofhydrogentruckswouldalsobeexploredtofurtherreducetheemissionsofhard-to-abatesectorssuchascargotransport,includinginternationalshipping(Box5).ToachievethesharesoutlinedinTable4,higherupfrontinvestmentinthepowersectorwouldbeneeded,andconsumerswouldfacehighercostsforend-usetechnologies.8However,thesecostscouldbecompensatedwiththesavingsobtainedthroughtheuseofmoreefficienttechnologiesandcheaperfuels,asexplainedinthesectionsbelow.7Capacityadditionsfor2030and2050representannualaveragevaluesforthe2018-2030and2018-2050periods,respectively.8End-usetechnologycostsrefertothedifferenttechnologiesusedinbuildings,transportandindustry(e.g.electricvehiclesandrelatedinfrastructure,cookstovesandairconditioners).Figure19:Totalfinalenergyconsumptionin2018andundertheDESin20501200PJTotalFinalEnergyConsumption–2050DES1235PJTotalFinalEnergyConsumption–201850%Fossilfuels33%Traditionalbiomass13%Electricity49%Electricity34%Fossilfuels12%Renewables,includingbioenergy4%Renewables,includingbioenergy6%TraditionalbiomassRenewableshareinelectricitygeneration70%Renewableshareinelectricitygeneration97%Note:Traditionalbiomassreferstothetraditionaluseofbiomassforcookingandheatingpurposesinbuildings.Bioenergyrepresented100%oftherenewablessharein2018and61%in2050DES,beingtheremaining39%modernrenewablesi.e.solarthermalandhydrogen.36RENEWABLEENERGYROADMAPFORCENTRALAMERICAFigure20:Renewable,traditionalrenewableandnon-renewablesharesoftotalprimaryenergysupplyin2018andunderthePESandDESin2030and20509Historicalvaluesforhydro,biomass,windandgeothermalfrom(BNEF,2021a).SolarPVrepresentspublicinvestmentaccordingtoIRENA(2021c).10InvestmentintheelectricitynetworkincludesinvestmentintransmissionanddistributionandtheexpansionofSIEPAC.12%15%19%25%62%32%26%19%17%5%55%59%62%58%32%0500100015002000250020182030PES2050PES2030DES2050DESTotalprimaryenergysupply(PJ)RenewableTraditionalrenewableNon-renewableNote:Totalprimaryenergysupplyincreases70%by2050undercurrentpolicies(PES).However,areductionof45%inthe2050DEScomparedtothe2050PEScouldbeachievedbyacceleratingrenewables,electrificationandenergyefficiencymeasures.Traditionalrenewablereferstothetraditionaluseoffuelwoodinbuildings.2.2INVESTMENTOPPORTUNITYTheaverageannualinvestment9inrenewableenergytechnologiesforelectricitygenerationandingridsandflexibility10to2050wouldincreasecomparedtothehistoricalpublicinvestmentduring2015-2020(Table5)(IRENA,2021c).Thishigherannualinvestmentwouldbededicatedtohydropowerfollowedbysolar,geothermal,biomass,onshorewindandconcentratedsolarpower(CSP).Fromthedataavailable,thegreatestincreaseininvestmentisexpectedtobeinhydro,followedbybiomass.IntheDES,thefutureannualinvestmentinsolarPVandgeothermalwouldberoughlydoublethehistoricallevel,whiletheannualinvestmentinwindtechnologieswouldbe3.8timeshigher.Table5:AnnualaveragehistoricalandprojectedinvestmentforthePESandDESANNUALAVERAGEINVESTMENTS(MILLIONUSD/YEAR)SCALEFACTORSHISTORICAL(2015-2020)PES(2021-2050)DES(2021-2050)PESVSHISTORICALDESVSHISTORICALPowergenerationcapacityHydro9832010153.310.4SolarPV(utilityandrooftop)2151724990.82.3SolarCSPN.A.N.A.95--Biomass74N.A.268-3.6Windonshore781841022.41.3Geothermal1683364192.02.5TOWARDSAREGIONALENERGYTRANSITION37ANNUALAVERAGEINVESTMENTS(MILLIONUSD/YEAR)SCALEFACTORSHISTORICAL(2015-2020)PES(2021-2050)DES(2021-2050)PESVSHISTORICALDESVSHISTORICALGridsandflexibilityElectricitynetworkN.A.610907--Flexibilitymeasures(e.g.storage)N.A.N.A.9--11Partofthefuelcostscorrespondstoelectricitycosts,whichwouldbededicatedtorecovertheinvestmentcarriedoutinincreasingthepowersectorinstalledcapacitytomeettheconsumerselectricitydemand.Note:CSP=concentratedsolarpower.Thecumulativeinvestmentinthepowersectoroverthe2021-2050periodintheDESwouldbealmostdoublethatinthePES,duemainlytotheneedtomeetthehigherelectricitydemandcreatedbyelectrificationofthefleet.However,ifthecostsofoperationsandmaintenanceaswellasfuelareconsideredtogetherwiththeinvestment,thenthetotalpowersystemcostsintheDESarejust8%higherthanthoseinthePES(Figure21).Fuelcostsinparticularareconsiderablylowerduetotheadditionaluseoflocalrenewableenergyresourcessuchashydro,solarandwindtechnologies,whichhavenoassociatedfuelcosts,aswellastheuseofbiomassandwastessuchasmunicipalsolidwasteandresiduesfromregionalindustries,includingbagassefromsugarcane(thesecostswerebeyondthescopeoftheanalysis).Figure21:Powersectorcumulativeinvestment(left)andcumulativeinvestment,operationsandmaintenance,andfuelcosts(right)forthe2018-2050periodunderthePESandDES020000400006000080000100000120000140000160000180000PESDESCummulativeinvestment,O&Mandfuelcosts(millionUSD)NewinstalledcapacityO&MFuelcostsT&DSIEPACexpansionStorage020000400006000080000100000120000140000160000180000PESDESCummulativeinvestment(millionUSD)NewinstalledcapacityT&DSIEPACexpansionStorageOperationsandMaintenance2.3END-USESECTORTECHNOLOGYCOSTSInboththePESandtheDES,thebulkoftheend-usetechnologycosts(period2018-2050),areinthetransportsector,accountingfor81%and82%ofthesetotalcosts,respectively.AsshowninFigure22,thecumulativeend-usesectorfuelcosts11for2018-2050decrease18%intheDEScomparedtothePES,duetotheimplementationofenergyefficiencymeasures,theuseofmoreefficienttechnologiesandcheaperfuels.Therefore,iftheend-usetechnologycostsandfuelcostsareconsideredtogetherforthe2018-2050period,thetotalendusesectorcostsintheDEScouldbe1.5%lowerthaninthePES.Table5:AnnualaveragehistoricalandprojectedinvestmentforthePESandDES(continued)38RENEWABLEENERGYROADMAPFORCENTRALAMERICAFigure22:Cumulativeend-usetechnologycosts,fuelcosts,andend-usetechnologyandfuelcostsforthe2018-2050periodunderthePESandDES0120000240000360000480000600000720000840000960000PESDESCummulativeend-usetechnologycosts(millionUSD)Cummulativefuelcosts(millionUSD)TransportIndustryCommercialResidential020000040000060000080000010000001200000PESDES0400000800000120000016000002000000PESDESCummulativeend-usetechnologyandfuelcosts(millionUSD)AcquisitioncostsFuelCostsEndusetechnologycostsFuelcostsNote:EUS=end-usesector;O&M=operationsandmaintenanceInaddition,theend-usetechnologycostsrequiredforrenewableandmoreefficienttechnologiesduringthe2018-2050period,inparticularinthelateryearsoftheanalysis,willalsoresultinfuelsavingspost-2050,benefitsthatarenotconsideredinthecurrentanalysis.Moreover,theend-usetechnologycostsneededintheDESfocusonexploitinglocalenergyresourcesandnewtechnologies,whichwouldrequiremaintenanceandserviceprovisionon-site,therebycreatinglocaljobsandboostingtheregion’seconomy.Theresultsofthisanalysisofinvestmentandend-usetechnologycostscouldprovidevaluableinputstodefiningtheinvestmentandfinancialneedsforSICA’sInvestmentPlanInitialPlatform(SICA,2020).TOWARDSAREGIONALENERGYTRANSITION39Box2.TransitioncostbenefitanalysisEstimatesoftheexternalitiesrelatedtooutdoorandindoorpollutionandclimatechangewerecalculatedfortheCentralAmericanregion.TheoverallbalanceofinvestingintheDESscenarioincomparisonwiththePESestimateispositive,withbenefitsexceedingcosts.Iftheinvestmentinpowersector,end-usesectortechnologiescostsandfuelcostsareconsideredtogether,theoverallenergysystemcostforthescenariosPESandDESwouldbecomparable.ThismeansthatthesameamountofmoneywouldflowinPESandDES,howeveritwouldbedistributeddifferently.InvestmentintheDESscenariocouldyieldacumulativepaybackthroughreducedexternalitiesfromhumanhealthandtheenvironmentofbetweenUSD360billionand1trillionby2050(Figure23).Thesavingsfromreducedexternalitiesfallintotwobroadcategories:outdoorairpollutionandclimatechange,andindoorpollution:•Outdoorairpollutionandclimatechangerepresenthalfofthetotal.ClimatechangeexternalitiesarequantifiedusingthesocialcostofcarbonapproachfortheCO2emissions.•Indoorpollutionresultsfromusingtraditionalbiomassinresidentialhouseholdsandrepresenttheremaininghalfoftheexternalities.Thishighlightstheimportancethatprovidingaccesstocleancookingtechnologiesandfuelstoallthepopulationhasintheregion.Figure23:CumulativedifferencebetweenenergysystemcostsandsavingsfromreducedexternalitiesoftheDEScomparedtothePESforthe2018-2050period-200000020000040000060000080000010000001200000Costs-DESSavingsfromreducedexternalities(low)-DESSavingsfromreducedexternalities(high)-DESCashflows(millionUSD)Reducedexternalities-indoorairpollutionReducedexternalities-outdoorairpollutionandclimatechangeIncrementalenergysystemcost(DESvsPES)40RENEWABLEENERGYROADMAPFORCENTRALAMERICA2.4EMISSIONSIftheestablishedenergytargetsintheDESaremetandtheinvestmentandend-usetechnologycostsareundertaken,emissionsin2050wouldbereducedaround70%intheDEScomparedtothePES(Figure24).In2018,transportaccountedforthehighestshareofregionalemissions,at54%,followedbythepowersector(23%)andindustry(15%).ThetransportsectorwillremainthehighestCO2emitterinboththePESandtheDES,contributingaround55%ofemissionsineachscenarioin2050.However,emissionsfromthesectorintheDES2050willbe72%lowerthaninthe2050PESduetothesignificanteffortstowardsfleetelectrification.UnderthePES,emissionsareexpectedtocontinueincreasingto2050inallcountries.UndertheDES,allcountrieswouldcontributetotheemissionreductions,bringingemissionsdownaround70%inDES2050comparedto2050PES(below2018levels).TransportandindustrysectorswouldbethemaincontributorstotheremainingemissionsinDES2050.Thesearederivedfromtheuseoftheremaininginternalcombustionenginevehicles,mainlylargetrucks,andtheuseoffossilfueltechnologiesintheindustrialsector.Adeep-diveanalysisinthesesectorscouldbedevelopedtocharacterisethemandproposesolutionsforafurtherdecarbonisation.Box8presentsseveralalternativestoconsiderinhard-to-abatesectorslikeindustry.Figure24:HistoricalemissionsandemissionsunderthePES(left)andDES(right),bycountryandsector,2000-205020002005201020152020202520302035204020452050PESDES200020052010201520202025203020352040204520502000200520102015202020252030203520402045205020002005201020152020202520302035204020452050PESDES020406080100120PanamaNicaraguaHondurasGuatemalaElSalvadorCostaRicaBelizeEmissions(MtCO2)010203040506070PanamaNicaraguaHondurasGuatemalaElSalvadorCostaRicaBelizeEmissions(MtCO2)020406080100120OthersPowerIndustryTransportBuildingsEmissions(MtCO2)Emissions(MtCO2)010203040506070OthersPowerIndustryTransportBuildingsSource:Emissionsfor2000-2018extractedfromClimateWatch(ClimateWatch,2021).TOWARDSAREGIONALENERGYTRANSITION41Figure25showstheevolutionofpercapitaenergy-relatedemissionsfrom2018to2050intheDES.Allcountriescontributetothedecreaseinpercapitaemissionsduringthestudyperiod.Figure25:End-useandpowersectoremissionspercapitawithrespecttoGDPpercapita,bycountry,in2018andundertheDESin2050000.51.01.52.02.5500010000150002000025000Emissionspercapita(tCO/capita)GDPpercapita(USD/capita)PanamaNicaraguaHondurasGuatemalaElSalvadorCostaRicaBelizeBox3.Reducingremainingemissionsinindustry(IRENA,2021b)CentralAmericadoesnothaveahighpresenceofcarbon-andenergy-intensiveindustries,suchasironandsteel,cement,aluminiumandchemicals.However,theregionstillhostsadiversesetofindustries,mainlyinthefoodandbeverage,pulpandpaper,andconstructionmaterialssectors(SICA,2020).Theseindustrieswillcontinuetorepresentasizeableshare(26%)oftheremainingemissionsin2050undertheDES.Giventhelimitedinformationavailableontheseindustries,aswellastheirdiversenatureandrelativelysmallscale,adetailedanalysisofmitigationoptionswasnotperformedforthisstudy.However,basedonthefeaturesofsomeoftheseindustries,itispossibletooffergeneralguidanceonmeasurestohelpfurthermitigateindustrialsectoremissions.Typically,thereislargepotentialtoimproveenergyefficiencyintheindustrialsector.Onewaytomitigateemissionsinthesectoristomaintainastrongfocusonenergyefficiencybymakingprocessesincreasinglyefficientandbysettingormandatingminimumstandardsforenergyefficiencyand/orforthecarbonintensityoffuels,processesandproducts.Incentives(e.g.throughpricesortaxes)forenergyefficiencyareoftenadoptedwithgoodresults.Ingeneral,opportunitiesariseintheimprovementofprocessefficiency,theadoptionofdemand-sidemanagementsolutions,theintroductionofhighlyefficientmotorsandthedevelopmentofmaterialrecyclingandstrengthenedwastemanagement.Industrycanalsobenefitfromcorporatesourcingandself-generationofrenewableelectricity.Inmanycountries,theconditionsarenotinplacethatallowindustrytorelyonself-generationorsourcingoutsideoftheregulatedmarket.Policyandregulationthusshouldallowformoreflexibilityiftheelectricitysupplyisfromrenewablesandrecognisethebenefitsofmovingawayfromfossil-basedgeneration.Allowingandpromotingdistributedenergyresourceson-sitewouldenableindustrialconsumerstoalsoproduceenergy(makingthemintoprosumers)andtoparticipateinancillaryservices.Largeconsumersshouldtakeanactiveroleinenergymanagementservices.Thesupplyoflow-carbonheatisanotherareawhereindustrycancontributeemissionreductions.Oneoptionistodevelopsustainablebioenergysupplychainstomeetthegrowingneedforbioenergyinindustrytosupplylow,medium-andhigh-temperatureheat.Bioenergycantaketheformofsolidandliquidfuelsandbiogas.Low-carbonheatcanalsobeachievedthroughalternativeheatingtechnologiessuchassolarthermalunits,heatpumpsandgeothermalresources,especiallyforlow-andmedium-temperatureapplications.Thesemeasureshavebeenproposedtosomeextentaspartofthescenariosdevelopedinthepresentanalysis.However,furtherresearchandanalysisareneededtounderstandthefullextenttowhicheachofthesemeasurescanbeimplemented,consideringtechnicalandeconomicallimitationsintheregion’scontext.42RENEWABLEENERGYROADMAPFORCENTRALAMERICA3RENEWABLESINTHEPOWERSECTORTOWARDSAREGIONALENERGYTRANSITION43RENEWABLESINTHEPOWERSECTOR12Totaldirectelectricityconsumptioncompriseselectricitydemandinthebuildings,transportandindustrysectorsanddoesnotaccountforindirectelectricitydemand,i.e.forhydrogenproduction.Increasingtheuseofrenewableenergytogenerateelectricityiskeyfordecarbonisingthepowersectorandforusingrenewablestoelectrifyenergyservicesintheend-usesectors.Twokeysolutionsareavailableintheregion:increasingrenewableenergycapacityandimprovingregionalpowersystemintegration.3.1RENEWABLEENERGYCAPACITYIntheDES,theannualdeploymentofrenewableenergyisscaledthree-foldcomparedtoplanneddeployment,toreachrenewablecapacitysharesofnearly75%by2030andmorethan90%by2050(comparedto67%in2018).Renewableenergyoffersthechancetomeetrisingelectricitydemandwhiledrivinglocaleconomicgrowth,unlockingsomeofthelowest-costelectricitysourcestodayandachievingcarbonneutralitygoals.Totaldirectelectricityconsumption12intheregionissettoincreaseatleast50%by2030andbetween300%and400%by2050from2018levels(Figure26,PES).Underplannedconditions,annualpowersectoremissionsdoublefrom2018levelsby2050,buttheTESandDESshowthatthisneednotbethecase.TheTESandDESshowhowemissionreductionsof80%canbereachedwhilesimultaneouslyachievingsignificantcostsavingsperunitofelectricitythroughtheincreaseduseofdomesticrenewableenergyresources.Figure26:Directelectricityconsumptionbyend-usesectorin2018andunderthePES,TESandDESin2030and2050200004000060000800001000001200001400001600001800002018203020302030205020502050PESTESDESPESTESDESElectricityconsumption(GWh)Agriculture,fishingandminingBuildingsIndustryTransportGenerationcapacityintheregionneedstoexpandgreatlyinallscenariostomeetdemand,regardlessofthepathway.InthePES,capacityisexpectedtoincrease66%to25GWby2030and300%to45GWby2050.TheTESandDESreachtotalinstalledcapacitiesof55GWand65GWrespectivelyby2050,drivenbyhigherelectricitydemandandtypicallyfewerfull-loadhoursofrenewablegenerationtechnologies,meaningthatmorecapacityisneededtodeliverthesamedemand.44RENEWABLEENERGYROADMAPFORCENTRALAMERICAGiventhevastpotentialofrenewableenergyintheregion,renewableswillexpandinallscenarios;however,intheabsenceoffurtherpolicy,fossilfuels(mostlynaturalgas)willbridgemuchofthegrowthinenergydemandfromtoday’slevels,reachingatotalinstalledfossilfuelcapacityofnearly13GWby2050.TheDESandTESshowhowthiscandroptobelow6GWby2050andimproveenergysecuritybyrelyingondomesticandregionalresources.MostnotableisthegrowthinsolarPVcapacity(to26GW)andhydropowercapacity(to13GW),whichformthebackboneofthepowersectorintheDESandTES.UnderthePES,therenewableshareofcapacityremainsattoday’slevelsdespiteconsiderablegrowthinelectricitydemandto2030and2050,indicatingthatrenewableswillfeatureinanyfuturescenarioduetotheircost-competitiveness.However,assuggestedinFigure27,capacity-basedrenewableenergytargetscanbemisleading.Figure27:Installedgenerationcapacitybytechnologyandsharesin2018andunderthePES,TESandDESin2030and20500%10%20%30%40%50%60%70%80%90%100%01020304050607080PESTESDESPESTESDES2018203020302030205020502050Installedcapacity(GW)OtherFossilNaturalGasBioenergyandwasteThermal-MunicipalSolidWasteWindSolarPVSolarCSPHydropowerGeothermalREShareVREShareNote:RE=renewableenergy;VRE=variablerenewableenergy;CSP=concentratedsolarpowerWhengenerationisconsideredinthePES,withoutnewpoliciesinplace,aroundhalfofthegrowthinelectricitydemandwillbemetwithimportedfossilfuel-basedgeneration,leavingdomesticenergysourceslargelyuntapped,withsignificanteconomicimplications.Therenewableshareofpowergenerationdropsconsiderablyunderplannedconditionseventhoughtherenewableshareofcapacityremainsbroadlythesame(Figure28).Figure28:Electricitygenerationbytechnologyandsharesin2018andunderthePES,TESandDESin2030and20500%20%40%60%80%100%050100150200250PESTESDESPESTESDES2018203020302030205020502050Electricitygeneration(TWh)OtherFossilNaturalGasBioenergyandwasteThermal-MunicipalSolidWasteWindSolarPVSolarCSPHydropowerGeothermalREShareVREShareNote:RE=renewableenergy;VRE=variablerenewableenergy;CSP=concentratedsolarpowerTOWARDSAREGIONALENERGYTRANSITION45WhileallthreescenariosshowthepotentialofsolarPV,deploymentsofarhasbeenlimited.In2018,theinstalledcapacityofsolarPVtotalledlessthan1GWacrosstheregion,suggestingthatcapacitywillneedtogrowbyseveralordersofmagnitudeinallscenarios.InthePES,solarPVcapacityreaches2.9GWby2030,butundertheTESandDESitreacheshigherlevelsof5.6GWand7.2GWrespectively.Thistrendisfurtheracceleratedby2050,whenthePESreaches11GWbuttheTESandDESreach21GWand26GWrespectively.ThiscorrespondstoanaverageannualbuildrateinthePESandDESof320MWand800MWrespectively,offeringinsightintothemobilisationofinvestmentneededinsolarPV.Thescaleofdeploymentissogreatthatharnessingbothutility-scaleanddistributedrooftopcapacitywillbecritical.HydropowerwillcontinuetoplayakeyroleinthepowersystemofCentralAmerica,growingfromatotalinstalledcapacityofaround7GWin2018to9GWin2030inallscenarios.By2050,however,thiscapacitywillincreaseto11GWinthePESand18GWintheDES,whichcorrespondstoaverageannualbuildratesof130MWand355MWrespectively.UnlikesolarPV,wherethesolarirradiancedoesnotvarygreatlyacrosstheregion,anambitiousroll-outofhydropowerwillbeconcentratedinareaswheretheresourcepotentialislocated.Thishassignificantimplicationsforhowtheregionalpowersystemoperates,thefundingmechanismsneededandtheregulationofthesystemtoensurefaircompetitionandreliableoperation.BiomassandwastewillalsobecrucialfordiversifyingtheportfolioofpowergenerationtechnologiesintheTESandDES.Theserelativelyuntappedresourceshaveacurrentinstalledcapacityofaround1.5GW,butthiswillgrowto7GWby2050intheTESandDES,comingfromarangeofsources.Whilenotablesugarcaneproductionexistsinmanycountriesintheregion,thereislargeuntappedpotentialtoexpandonandretrofitexistingcapacitybyusinghighlyefficientboilersandharnessingallwasteproductsfromharvesting.Significantpotentialalsoexiststoexpandthecollectionanduseofmunicipalsolidwasteandlandfillgastoproduceelectricitywhilesimultaneouslyavoidinglandfilling,providingenvironmentalbenefits.Whiletheseresourcesareinherentlyvariable,whencombinedwiththevariabilityofsolar,hydroandothersources,theyreducetheoverallvariabilityoftheresourcesunderpinningsystemoperation.Therenewableenergyshareinpowercapacityandgenerationinthe2030and2050DESareshowninFigure29,whichshowstheprogressbetweenthetwoyears.Figure29:Powergenerationinstalledcapacityandgeneration,bycountry,undertheDESin2030and20500%20%40%60%80%100%BZCRSVGTHNNIPAPowercapacity20300%20%40%60%80%100%BZCRSVGTHNNIPAPowergeneration2030BZCRSVGTHNNIPAPowercapacity20500%20%40%60%80%100%BZCRSVGTHNNIPAPowergeneration2050RenewableNon-Renewable0%20%40%60%80%100%46RENEWABLEENERGYROADMAPFORCENTRALAMERICATable6showstheinvestmentneedsingenerationcapacityforthepowersystemandhowthiswouldevolveunderthethreescenarios.TotalcapitalinvestmentroughlydoublesintheTESandDES,whereitreachesuptoUSD75billionby2050,comparedtotheUSD37billionneededinthePES.Hydro,solarPV(utilityandrooftop)andgeothermalpowerarethebiggestcomponentsofthisinvestment,allofwhichdeliversignificantfuelcostsavingsaswellasimprovementsinenergyindependenceto2050.Thesetechnologies,inadditiontobiomass,couldbeprioritisedinbuildingaportfolioofbankableprojectsforauctionssothatthispotentialcanberealised.FossilfuelinvestmentsarealsogreatlyreducedintheTESandDES,withbothscenariosseeingreducedoperationoffossilfuelgenerators,raisingtheseriousprospectsofstrandedassetsunlessactionistaken.Table6:Cumulativecapitalinvestmentneedsingenerationcapacitybytechnologybetween2021and2050inthePES,TESandDESBILLIONUSDPESTESDESGeothermal9.812.112.2Hydroplant9.327.629.4Nuclear---SolarCSP-1.42.8SolarPV4.39.910.1SolarPV(rooftop)0.70.94.4Thermal-Coal0.3--Thermal-Diesel---Thermal-FuelOil0.50.2-Thermal-NaturalGas7.04.45.8BiomassandWaste-6.47.8WindTurbines5.33.03.0Total37.265.975.4Thisimpliestheneedtodesignelectricitymarketsthatvaluemanyofthenon-energyservicesthatthesemarketsprovide,suchassynchronousinertialresponse,fastfrequencyresponseandrampingmargin.Suchmarketdesignwouldapplytoallmodesofgenerationthatcouldprovidetheseservices.Itwouldincentivisesmartoperationofthesystem,openingthedoortoinnovationsinthesectorsuchasaggregators,distributedgeneratorsanddemand-sidemanagement,whichcouldalsoprovidemanyoftheseservicesbyimprovingtheirbusinesscase.TOWARDSAREGIONALENERGYTRANSITION47However,theeffectiveuseoftheseserviceswillrequirehighlevelsofsystemobservability(asystemcannotbemanagedeffectivelyifonlyaportionofitismonitoredandfeaturesactivelyinoperationaldecisions)toenablesmartpowersystemoperationtoeffectivelyleveragethevalueofallofitscomponents.Thiswouldfurtherunlockthebenefitsoflow-costrenewablesbyenablingtheuseofarangeofinnovationsintheareasofenablingtechnologies,businessmodels,marketdesignandsystemoperation,asdetailedinIRENA’sinnovationlandscapereport(IRENA,2019a).Thisoperationalflexibilitywillbeakeyenableroftheincreasedintegrationofvariablerenewableenergyinthepowersystem,asseenintheTESandDES.Thiswillallowanincreasinglyweather-dependentelectricitysupplybasedonwindandsolartomeettheevolvingprofileofelectricitydemand.Crucialinprovidingthisflexibilitywillbeexpandingbothdomesticandinternationaltransmissionanddistributionsystemsinadditiontoelectricitystorageanddemandflexibility.Thehighshareofvariablerenewableenergy,mostlysolarPV,inTESandDEScouldposesystemoperationchallenges;thus,aflexibilityanalysiswasperformedinthesescenariosfor2030and2050usingtheIRENAFlexTooltoassessthesepotentialneedsataninternationallevel.Noflexibilitychallengeswerefoundinthe2030scenarios,independentoftheexistinginterconnectioncapacitybetweencountries.However,asthepenetrationofvariablerenewablesincreasesto2050,someflexibilitychallengesmightappeariftheinterconnectioncapacityremainsat300MWandpowersystemflexibilityisnotincreased.Expandingdomestictransmissionanddistributionsystemswillalsobeessentialtofacilitatethisflexibility.TheanalysisshowedthatexpandingSIEPAC’slinecapacityto2GW,asisthecaseintheTESandDES,isakeyenablingtechnology(aselaboratedinthefollowingsection).Itallowssupplyanddemandtobebalancedoverawiderareaandenablestheregiontotapintoenormouseconomiesofscaleforthepowersectorbysharingresourcesthatotherwisecouldnotberealised.Suchexpansionreducestheneedforduplicationofeffortsacrosstheregionbyallowingforincreasedsharingofcapacityratherthaneachnationalsystemneedingtoprovideitsownbalancingandsystemservices.TheSIEPACexpansiontranslatestoanadditionalinvestmentininterconnectionofUSD1.7billion,addingaround2.3%tothetotalcapitalinvestmentsshowninFigure21.Inadditiontothisinvestment,electricalstoragecapacityreachesupto810MWand1.7GWhintheDES,ataninvestmentofUSD250million,whichcorrespondstoanadditionalinvestmentof0.3%.Theproportionalshareoftheseinvestmentsbeliestherichbenefitsthattheyunlock,giventhattheycouldreducetotalpowersystemcostsby7%perunitofpowergeneratedby2050comparedtothePES.3.2REGIONALPOWERSYSTEMINTEGRATIONFosteringandimprovingregionalpowersystemintegrationcouldenabletheregiontofurtherexploitanuntappedrenewableenergypotentialofaround180GW.Co-operationamongtheCentralAmericancountriesiskeytoensureareliable,low-carbonandcheapsupplyofelectricitybyfosteringfurtherintegrationofrenewablesourcesintothesystem.ThecountriesarecurrentlyinterconnectedviatheSIEPACline,a230-kilovoltpowertransmissionlinewithanettransfercapacityofupto300MW.13ThislinehasbeeninoperationsinceOctober2014andcouldbeeasilyexpandedto600MWifrequired(IDB,2017).ThankstotheestablishmentoftheRegionalElectricityMarket(MER),systemoperatorsormarketoperatorsfromthemembercountriescanalsosubmitoffersforimportingorexportingenergymoreefficiently.13Notethatthisisthemaximumpossibletransfercapacityoftheline.Inreality,duetointernaltransmissionbottlenecksincertainsub-stationsintheregion,thetransfercapacitybetweensomecountriestendstobeconsiderablylower.48RENEWABLEENERGYROADMAPFORCENTRALAMERICABoththeSIEPAClineandtheMERbenefittheregionbydecreasingtotalsystemcostsandmarginalprices,andfosteringtheintegrationofrenewables,therebyreducingemissions(IDB,2017).However,asbothelectricitydemandandrenewableenergycapacityincrease,sotoowillthepowerflowsbetweencountries,causingcongestionoftheSIEPACline.Thiscouldleadtocurtailmentofrenewables,risingpricedifferentialsbetweencountries,higherCO2emissionsandevenlossofloadifnoadditionalmeasuresareconsidered.UndertheDES,whichhasthemostambitiouspenetrationofrenewables,theoptimaltransfercapacityoftheSIEPAClineby2050isaround2GW.Figure30showsthedifferenceininstalledcapacityandgenerationintheDESbetweenkeepingtheSIEPACcapacityat300MWandincreasingitto2GW.Figure30:InstalledcapacitybytechnologyinthetwointerconnectionscenariosundertheDESin2050010203040506070DES2050-300MWDES2050-2GWInstalledcapacity(GW)CCGTgasSolarPVSolarCSPHydroreservoirSTbiomassICEdieselHydrorun-of-riverWindSTcoalICEbiogasGTdieselICEfueloilGeothermalNote:CCGT=combined-cyclegasturbine;GT=gasturbine;CSP=concentratedsolarpower;RES=reservoir;ROR=runofriver;ICE=internalcombustionengine;ST=steamturbineIntheDESscenariowithincreasedinterconnection(2GW),theinstalledcapacityofrenewableenergyincreasesby9.6GW(mostlysolarPVandhydro),andtheinstallationof900MWofnaturalgas-firedplantsisavoided.Therenewableenergyshareincreasesfrom86%to90%,resultinginadecreaseinannualpowersectorCO2emissionsfrom8.9milliontonnesto2.6milliontonnes(i.e.around60gramsto20gramsofCO2perkWhgenerated).Becausetheemissionsresultmostlyfromnaturalgasgeneration,thedifferenceinbothinterconnectionscenariosismainlybecauseofthis.Intheabsenceofincreasedinterconnection,in2050around7terawatthours(TWh)ofmostlysolarPVcapacityiscurtailedintheDESand4TWhiscurtailedintheTES,andaverysmallshareofelectricitydemandinsomecountriescannotbemet.Inthiscase,differentflexibilityoptionswereconsideredseparatelytoanalysetheirimpactonthesystem.Simulationswerecarriedouttoconsidersmartchargingofelectricvehicles(unidirectionalcharging,notvehicle-to-grid;seeBox4),electricitystorageandincreasedinterconnectioncapacity.TOWARDSAREGIONALENERGYTRANSITION49Inallthreeofthesesimulations,thelossofloaddisappears,andthecurtailmentofvariablerenewableenergyisreducedconsiderably(e.g.electricitystoragereducescurtailmentintheDES2050from7TWhto1.5TWh).ThesesimulationsalsopresentlowerCO2emissions,higherrenewableenergyshares,lowermarginalprices,andlowertotalsystemcosts,asacapacityexpansionproblemwassolvedtoobtainthecost-optimalcapacityoftheseflexibilityoptions.Acombinedscenariowithdifferentflexibilityoptionswasalsosimulated,resultinginthemostcost-efficientscenarioandshowingthatabasketofflexibilitysolutionsiskey.Inthe2GWincreasedinterconnectioncase,curtailmentofvariablerenewableenergyisreducedfrom6.2%ofthetotalpotentialtojust2.7%,andallcustomerloadismet.Linecongestion,whichforsomelinesexceeds7000hoursannuallyinthe300MWcase,isreducedtotheminimum.Additionally,giventheimportanceofhydrogenerationintheregion,adryyearsensitivityanalysiswasconsideredinthemodel.Althoughhydrocapacityfactorsarealreadyconservativeinthemainscenarios,a25%reductionofannualinflowswasconsidered,reachinganaveragecapacityfactorofaround32%.Thissensitivityanalysisshowedthateveniftheyearofstudyisdry,thesystemhasenoughinstalledcapacityandflexibilitytobeoperated,withonly0.17%oflossofload(whichcanbereducedtozerowiththeinstallationofsolarPVandelectricitystorageinsomeregions)andverylowrenewablecurtailment.Adryyear,however,wouldhavenegativeimplicationsintermsoftotalsystemcosts,marginalprice,andCO2emissionsduetotheincreaseinfossil-fuelledgenerationtocoverthemostcriticaldemandperiodswithlowhydroand/orvariablerenewableenergyavailability.Theincreaseininterconnectionwouldalsohaveanimpactonthemarginalsystemprice,andindirectlyontheelectricitytariff.Whileinthe300MWcasetheaveragesystempriceisdifferentforeverycountryintheregion,intheincreasedinterconnectioncasethepriceisthesame14andlowerasthereisnotransmissioncongestion15andthisavoidsmarketsplitting.Figure31showsthemarginalpricereductionsintheincreasedinterconnectionscenarioundertheDESin2050.14ExceptforBelize,whichisnotinterconnectedwiththeSIEPACline,andthereforetheincreasedinterconnectionscenariodoesnotaffecttheresults.15NotethatthemodelassumesthattherearenointernaltransmissionconstraintswithinthecountriesFigure31:ReductionofthemarginalsystempriceintheincreasedinterconnectionscenarioundertheDESin2050BelizeRepublicofCostaRicaRepublicofElSalvadorRepublicofGuatemalaRepublicofHondurasRepublicofNicaraguaRepublicofPanama72%11%73%71%71%72%0%Note:Marginalsystempricereferstothepriceofthetechnology/powerplantwhichwouldhavetoincreasegenerationifdemandisincreasedDisclaimer:Thismapisprovidedforillustrationpurposesonly.BoundariesandnamesshowndonotimplytheexpressionofanyopiniononthepartofIRENAconcerningthestatusofanyregion,country,territory,cityorareaorofitsauthorities,orconcerningthedelimitationoffrontiersorboundaries.50RENEWABLEENERGYROADMAPFORCENTRALAMERICAIncreasingthenettransfercapacityoftheSIEPAClinealsohasconsiderablecostbenefits.16Expansionofthelineplaysakeyroleinachieving7%lowercostsperunitofelectricitygeneratedby2050intheDEScomparedtothePES(wherethelineisnotexpanded).Mutualrelianceinregionaloperationandplanningthushassignificantefficiencybenefitsandcanhelplowerthecostsforallwhilemeetingahigherelectricitydemand.Inadditiontothetechnicalandeconomicbenefits,increasedinterconnectioncouldimproveenergysecurityintheregion,withlessmacroeconomicriskforcountriesastheiruseoffossilfuelsdecreases.Box4.Innovationoutlook:SmartchargingforelectricvehiclesIRENA’sInnovationoutlook:Smartchargingforelectricvehicles(IRENA,2019b)showsthatsteadyreductionsinthecostsofrenewablepowergenerationaremakingelectricityanattractivelow-costenergysourcetofuelthetransportsector.Scalingupthedeploymentofelectricvehiclesalsorepresentsanopportunityforpowersystemdevelopment,withthepotentialtoaddmuch-neededflexibilityinelectricitysystemsandtosupporttheintegrationofhighsharesofrenewables.However,achievingthebestuseofelectricvehiclesrequiresacloselookatwhichusecaseswouldalignbestforboththetransportandelectricitysectors.Optimally,electricvehiclespoweredbyrenewablescanspawnwidespreadbenefitsforthegridwithoutnegativelyimpactingtransportfunctionality.Forthat,smartchargingandsmartcharginginfrastructurearekey,providinganintelligentinterfacethatenableschargingcyclesthatareadaptabletoboththeconditionsofthepowersystemandtheneedsofvehicleusers.Amongotheraspects,IRENA’sinnovationoutlookdiscussesthepotentialimpactofelectricvehiclechargingontheelectricitydistributionsystemsincitiesandshowcaseshowsmartchargingcouldreducetheinvestmentassociatedwithreinforcinglocalgrids.Thereportalsohighlightstheabilityofsmartchargingofelectricvehiclestofacilitatetheintegrationofvariablerenewableenergysources,includinginandaroundcities.Thediscussionfurtherexploresthepossibleimpactofotherdisruptivetechnologiesthatcanpotentiallytransformurbantransport,suchasautonomousvehiclesandmobility-as-a-service.16Operationalreserveswerenotmodelledindetail;however,itwouldbeusefultoanalysethepossibilityofsharingreservesthrougharegionalancillaryservicesmarket,asisdoneinEuropeanbalancingmarkets,bringingadditionalbenefits(ENTSO-E,2018).TOWARDSAREGIONALENERGYTRANSITION51Renewablesinthepowersector:actionsneededfortheperiod2018-2030and2030-2050•Buildaportfolioofbankablerenewableenergyprojectspreparedforauctions.•Encourageroll-outofdistributedenergyresources.•Expandtransmissionanddistributionsystemswithincountriestountaptherenewableenergypotential,allowinglowemissionsandlow-costgeneration.•Increaseinterconnectioncapacitybetweencountriesintheregionby1.5GW.•Createaregionalbalancingandancillaryservicesmarkettoshareoperationalrequirementsamongcountries.•Developstrategiesforsmartchargingofelectricvehicles.CONTRIBUTIONSTOTHEREGION•Increasedinvestmentandstimulustotheeconomies–post-COVID-19recoveryprocess.•Generationofemploymentfortheinstallationandoperationsandmaintenanceofstock.•Increasedenergysecuritybyreducingfossilfueldependency.•Avoidanceoffossilfuellock-inandpositionstheregiontotakeadvantageofhighlyinnovativetechnologies,spurringlocalinnovation.•Reductionoftotalsystemcosts,aswellasmarginalsystemprice.•Reductioninlocalpollution.COMPLIANCEWITHCURRENTREGIONALSTRATEGIES•EES2030•Euroclima+TECHNICAL/FINANCIALPARTNERS•WorldBank•Inter-AmericanDevelopmentBank•CABEI–CentralAmericanBankforEconomicIntegration•CAF–DevelopmentBankofLatinAmericaACTIONSDONEBY2030•Enablesmartoperationoftransmissionanddistributionsystemssothatdistributedenergyresourcesandappliancescanbeharnessed.•Installenergystoragetofurtherintegraterenewableenergy,especiallysolarPV.•Enabledemand-sideflexibilitywithtime-of-usetariffsandaggregators.•Establishregionalintegratedmarketandsystemoperation.•Enhanceregionaljointgovernanceonenergyplanning,markettradeandsystemoperation.•Installelectrolysersfordomesticproductionofgreenhydrogenandpowersystemflexibility.ACTIONSDONEBY205052RENEWABLEENERGYROADMAPFORCENTRALAMERICA4ELECTRIFICATIONINTHEEND-USESECTORSTOWARDSAREGIONALENERGYTRANSITION53ELECTRIFICATIONINTHEEND‑USESECTORSWhentheelectricitygenerationmixispredominantlyrenewable,theelectrificationofcertainenergyservicesintheend-usesectorscouldtriggernumerousbenefits,asdescribedinthefollowingsections.4.1ELECTRICITYUSEINTOTALFINALENERGYCONSUMPTIONIntheDES,theshareofelectricityintotalfinalenergyconsumptionincreasesfrom13%in2018to50%in2050,helpingtoreducethefossilfuelsharefrom50%in2018to33%in2050,withend-usetechnologycostsofaroundUSD500billion.Theelectrificationofenergyservicesintheend-usesectorswillresultinagreatershareofelectricityintotalfinalenergyconsumption,comparedtofossilfuels,asshowninFigure32.Figure32:Electricityshareintotalfinalenergyconsumptionbysectorin2018andunderDESin2030and2050,andsharebycountryin2018andunderDESin20500%10%20%30%40%50%60%70%80%90%100%201820302050201820302050201820302050IndustryTransportBuildingsElectricityFossilRenewable2050DES201810%20%30%40%50%60%70%PanamaNicaraguaHondurasGuatemalaElSalvadorCostaRicaBelizeElectricityshareinTFEC(%)54RENEWABLEENERGYROADMAPFORCENTRALAMERICAElectrificationofthetransportsectorisexpectedtobemoderateinthePES,withtheshareofelectricityintransportenergydemandreachingjust4%in2050from0%in2018.IntheDES,incontrast,strongelectrificationeffortsoccurandtheelectricityshareintransportenergydemandrisesto44%in2050.Theshareofelectricityuseinthebuildingssectorincreasesfrom20%in2018to40%inthePES2050and70%intheDES2050.Thisisduemainlytothedecreaseindemandfortraditionalrenewables,specificallyfuelwood,triggeredbyreductionsintheuseoftraditionalcookstovesTheelectricityshareintheindustrysectorisexpectedtogrowfrom23%in2018to26%inthePES2050and28%intheDES2050.Despitethisslightdifferenceinelectricitysharesin2050,thecontributionoffossilfuelsdecreasesintheDEScomparedtothePES,whiletheshareofmodernrenewablesincreases.Technologycosts17ofUSD500billionwouldberequiredtocovertheelectrificationofend-usesectorsintheDES,forperiod2018-2050.Nearlyallofthis(97%)wouldbespentinthetransportsector,forthepurchaseofelectricvehicles(82%)andrelatedcharginginfrastructure(18%).Table7showsthespecificcostneedsforeachsector.17Costsintransportinfrastructurerefertopublicandprivatechargersforelectricvehicles,andinresidentialandcommercialcookingandheatingrefertoelectricheatersandelectriccookstoves.Industryelectrificationmeasurescouldnotbedefinedintheanalysisduetothelowcharacterisationoftheregionalindustrysector.18ThesetofmeasuresproposedintheDESforthetransportsectorareindicatedinthesection“Sectoractionrequirednow”.Table7:Cumulativeend-usetechnologycostsforelectrificationofend-usesectorsthe2018-2050periodundertheDESEND-USESECTORSUB-SECTORTECHNOLOGYCOSTS(MILLIONUSD)TransportElectricvehicles399146Infrastructure86831ResidentialbuildingsCooking11493Heating1080CommercialbuildingsCooking393Heating102Total499045Note:Electricvehiclesincludestheacquisitioncostsofelectricmotorcycles,cars,SUVs,Vans,minibuses,busesandsmallandlargetrucks.TransportInfrastructureincludestheacquisitioncostofprivateandpublicelectricvehicleschargers.Cookingincludestheacquisitioncostsofelectricstoves.Heatingincludestheacquisitioncostofelectricheaters.EnergydemandinthetransportsectorcoulddecreaseconsiderablyifthemeasuresproposedintheDESareimplemented,18asshowninFigure33.Mostofthisdecreaseisachievedthankstotheimplementationofmeasuresinpassengertransport,mainlyelectrificationofthefleet.Electricvehiclesrequireabout80%lessenergyperkilometretravelledcomparedwiththeinternalcombustionenginevehicles,beingconsiderablymoreefficient.Consequently,fleetelectrificationeffortswillbekeyforreducingenergydemand.TOWARDSAREGIONALENERGYTRANSITION55Figure33:Energydemandbytransportsub-sectorin2018andunderthePESandDESin2030and205001000002000003000004000005000006000007000008000009000002018PES2030PES2050PES2030DES2050DESEnergydemand(TJ)PassengerCargoIntheresidentialandcommercialbuildingssectorin2018,cookingwasthemostenergy-demandingserviceduetothelargeshareofinefficienttraditionalcookstoves,followedbyspaceheating(relevantonlyinGuatemala,whereopenfireisusedforthisactivity)(Figure34).For2050,thegreatestenergysavingsundertheDESwouldbeobtainedbyimplementingmeasuresincookinginresidentialbuildingsandinspacecoolingandcookingincommercialbuildings.Figure34:Energydemandbyenergyserviceintheresidentialandcommercialbuildingssectorin2018andunderthePESandDESin2030and205001000002000003000004000005000006000002018PES2030PES2050PES2030DES2050DESEnergydemand(TJ)ResidentialBuildingsEnergyDemandWaterheatingSpaceheatingSpacecoolingLightingCookingAppliances56RENEWABLEENERGYROADMAPFORCENTRALAMERICAFigure34:Energydemandbyenergyserviceintheresidentialandcommercialbuildingssectorin2018andunderthePESandDESin2030and2050(continued)Energydemand(TJ)0500001000001500002000002500003000002018PES2030PES2050PES2030DES2050DESCommercialBuildingsEnergyDemandWater/WastewaterWaterheatingSpaceheatingSpacecoolingPubliclightingMotivepowerLightingCommercialVehiclesAppliancesCookingTheelectrificationofenergyservicesintheend-usesectorscouldbekeyforthepostCOVID-19economicrecovery,asitprovidesopportunitiesforlocalinvestmentandindustrialisationonaregionalscale,aswellasincreasingtheemploymentrateinthecountries.Additionally,theincreaseinelectricityusewoulddecreasetheneedforfossilfuels,whicharenotreadilyavailableintheregion,therebyincreasingenergysecurityandreducinglocalpollution.AsCentralAmericacontinuestogrow,infrastructuredevelopmentisneededthattakesintoconsiderationenergytransitionobjectivesandresiliencytoclimatechange.4.2ELECTRICITYUSEINTHETRANSPORTSECTORIntheDES,77%ofthepassengerfleetand53%ofthecargofleetareelectrifiedby2050,whichrequiresaverageannualsalesofaround190000electricvehiclesby2030and1.1millionby2050.Withthis,transportsectoremissionsdecrease72%in2050intheDEScomparedtothePES.Fossilfueldemandofaround8exajoulesisavoidedbetween2018and2050intheDEScomparedtothePES,equivalentto17timesthetransportfossilfueldemandin2018.SeveralcountriesinCentralAmericaaswellasregionalentitiesandcommitteeshavedefinedplans,strategies,programmesandtargetstofosterelectro-mobilityasanopportunitytodecreasetransportsectoremissions(PNUMA,2021).Transportisamajorcontributortocountries’CO2emissionsinventories,accountingfor55%oftheroughly55milliontonnesofCO2emittedbytheregion’senergysectorin2018.TheREmapanalysisintegratedthesemeasuresinthePESandincreasedthemfortheTESandDESby2050.FortheDES,itwasassumedthatalltypeofvehiclesusedforpassengerandcargotransportcanbeelectrified,reachingsharesof18%inthepassengerfleetand13%inthecargofleetby2030.Electrificationofthetransportsectoroccursprimarilyincars(39%ofthepassengerfleetin2050DES)followedbymotorcycles(31%in2050DES),sincethesevehicletypeshavethehighestsharesinmostcountries’fleetsintheregion(Figure35).Figure36showsthevehicleunitsofthehighersharesofelectricpassengerandcargovehiclesin2030and2050intheDES.TOWARDSAREGIONALENERGYTRANSITION57Figure35:Shareofroadtransportvehiclesbytypein2018andunderthePESandDESin2030and20500%10%20%30%40%50%60%70%80%90%100%201820302050201820302050Van-ElectricVan-ConventionalThree-wheelers-ConventionalSUV-ElectricSUV-ConventionalSpecialEquipment-ElectricSpecialEquipment-ConventionalSmalltruck-ElectricSmallTruck-ConventionalMotorcycle-ElectricMotorcycle-ConventionalMicrobus-ElectricMicrobus-ConventionalLargetruck-HydrogenLargetruck-ElectricLargeTruck-ConventionalCar-ElectricCar-ConventionalBus-ElectricBus-ConventionalPESDESBicycleShareofvehicletypes(%)Figure36:ElectricvehiclestockbyvehicletypeundertheDESin2030and2050E-BusesE-MotorcyclesE-LDTrucksE-CarsE-HDTrucks20302050231thousand45thousand7million857thousand853million131thousand9.4million1.04million68thousand11thousandNote:LD=light-duty;HD=heavy-duty.58RENEWABLEENERGYROADMAPFORCENTRALAMERICAFigure37showstheshareofelectricvehiclesinthefleetbycountryin2050underthePESandDES,indicatingoveralleffortstodecarbonisethetransportsector.CostaRicaandPanamaareconsideringambitioustargetsintheircurrentplansforfleetelectrification.Accordingtoestimates,lessthan1%oftheregion’soverallfleetiscurrentlyelectrified.Figure37:ShareofelectricvehiclesinthefleetbycountryunderthePESandDESin205020%40%60%80%100%PanamaNicaraguaHondurasGuatemalaElSalvadorCostaRicaBelizeDES2050PES2050Bysub-sector,passengertransportcontributedthehighestshareofemissionsin2018duetothelargeshareofcarsandmotorcyclesintheregion’sfleet(Figure38).Withtheintroductionofelectricvehicles,theemissioncontributionofpassengertransportrelativetocargotransportdecreases,from77%in2018to54%by2050undertheDES.Figure38:Emissionsbytransportsub-sectorin2018andunderthePESandDESin2030and205077%76%75%75%54%23%24%25%25%46%01020304050607020182030PES2030DES2050PES2050DESEmissions(MtCO)PassengerCargo-17%emissionsdecrease2030DESvsPES-70%emissionsdecrease2050DESvsPESTOWARDSAREGIONALENERGYTRANSITION59Electrificationofthefleetrequiresbuildingouttheappropriatecharginginfrastructure.Table8showsthenumberofelectricchargersbytypeandsizethatwouldberequiredundertheDES,withsmallprivatechargerspredominant.DevelopingthisinfrastructurewouldrequirecumulativecostsofUSD86.8millionoverthe2018-2050period.Additionally,thepowergridwouldneedtobereinforcedtoprovidereliableservicetoallelectricvehicleusers,consideringflexibilitymeasuressuchassmartcharging.TheassociatedinvestmentforthiswascoveredearlierintheUSD24.6billioncumulativeinvestmentintransmissionanddistributionduringthe2018-2050period,asshowninFigure20.Table8:Numberofelectricchargersbytypeandsizein2030,2040and2050undertheDESTYPEOFELECTRICCHARGER203020402050Smallprivatecharger111515448874399199899Largeprivatecharger2260867472331343442Smallpubliccharger111515488744919990Largepubliccharger113043736267172Note:Smallprivatechargersrefertohomechargersoftypically3.6kWto7kWformotorcycles,carsandsportutilityvehicles(SUVs);smallpublicchargersrefertochargersoftypically22kW.Largeprivateandpublicchargersrefertochargersof<50kWforvans,mini-buses,buses,andsmallandlargetrucks.Box5.StatusofbatterytechnologyBatterystorageisakeybuildingblockofthetransformationtowardsnetzeroemissionenergysystems.Inexpensive,mass-producedbatterieswillenablecost-effectivedecarbonisationoftheroadtransportsector,whichcurrentlyaccountsforaroundone-fifthofglobalenergy-relatedCO2emissions.Batteriescanstorecheap,carbon-neutralsolarandwindgeneration,contributingtothesafe,reliableoperationofpowersystemswithveryhighsharesofrenewables.Batteriescanalsosupportawiderrangeofservicesinthepowersector,includingfrequencyresponse,reservecapacityandblack-startcapability,amongothers(IRENA,2017).Batterytechnologyhasexperiencedimpressiveprogressoverthelastdecade,withcostsdecliningaround90%.Thecostoflithium-ionbatterypacks,typicallyusedinelectricvehicles,exceededUSD1100/kWhin2010butfelltoUSD137/kWhby2020(BNEF,2020).Ifcurrenttrendscontinue,averagecostscouldsoonbreaktheUSD100/kWhmark,afigureoftencitedasthethresholdforlight-dutyroadvehiclestoreachup-frontcostparitywithinternalcombustionvehicles.By2030,batterypackpricescouldreachUSD61/kWh(BNEF,2021b),furtherimprovingthecostcompetitivenessofelectricvehicles.Atthesametime,theglobalbatteryproductioncapacityisgrowingexponentially.Batteryproductioncapacityforelectricvehiclesreached180gigawatthoursperyearin2020,andthepipelineforlargebatteryfactories(>1GWhcapacity)nowincludes181plantswithaplannedcapacityof3terawatthoursperyearby2030(Moores,2021).Suchcapacitywouldenabletheproductionof48millionlight-dutyvehiclesannually,morethanhalfoftheglobalmarketinrecentyears.Existingbatterytechnologyisquicklyreachingcommercialmaturitytoenabledecarbonisationofsomeenergyservices,forexample,roadtransport,short-termpowerstorageandancillaryservices.Long-durationpowerstorage(tenstohundredsofhours),aviationandmaritimeshippingarecandidatestobenefitfromimprovedbatterytechnologyinthefuture.Eachoftheseapplicationsrequiresbatteriesthatareoptimisedfortheirspecificneeds(Traheyetal.,2020).Assumingthat80%oftheproductionisdedicatedtolight-dutyelectricvehicles,andanaveragebatterypacksizeof50kWh.Source:IRENA,2021b60RENEWABLEENERGYROADMAPFORCENTRALAMERICAElectricityuseinthetransportsector:actionsneededfortheperiod2018-2030and2030-2050•Organiseworkingcommitteesintegratingpublicandprivateinstitutionsandpossibletechnical/financepartners.•Assessthecurrentsituationofthesectortoidentifybarriersanddefinepriorities.•Developspecificplansandstrategiesforsustainablemobility(e.g.CostaRica,Panama).•Implementpilotprojects(e.g.CostaRica,Panama).•Undertakeeffortstofinanceinvestmentinelectro-mobility–e.g.currentinitiativesbybanksandgovernmentsprovidingclientswithspecialbankloansconditionsforelectricvehicleacquisition(UNEP,2021).•Deploycharginginfrastructureandgridsforelectricvehicles.•Developbusinessmodelsandregulationforelectricvehiclecharging.•Deploysmartchargingsolutionsanddesignatariffframeworkwithlocalandregionalfuncionalities.•Reducetransportvolumeandcongestionthroughmodalshift(switch2.5%ofdistancetravelledfromcarstobikes,and5%ofdistancetravelledfromcarstoelectricbuses).CONTRIBUTIONSTOTHEREGION•Increasedinvestmentandstimulustotheeconomies–postCOVID-19recoveryprocess.•Generationofemploymentfortheinstallation,operations,andmaintenanceofstockandrequiredinfrastructure,consideringgenderequalityforjobapplications.•Reductioninfossilfuelimports,withthecorrespondingimpactongovermentexpenses,plusgreaterenergysecurityfromusinglocalrenewablesforelectricitygeneration.•Reductioninlocalpollution.COMPLIANCEOFCURRENTREGIONALSTRATEGIES•EES2030•MOVELatam–ElectromobilityinLatinAmerica•Euroclima+TECHNICAL/FINANCIALPARTNERS•WorldBank•Inter-AmericanDevelopmentBank•CABEI–CentralAmericanBankforEconomicIntegration•CAF–DevelopmentBankofLatinAmericaACTIONSDONEBY2030•Acceleratetheshifttoelectro-mobilitybygivingelectricvehiclespriorityaccessincities.•Exploreintroductionofothermodalshiftssolutions(e.g.railwaysinmajorcitiies)•Improvetransportinfrastruture,networksystemsandstock.ACTIONSDONEBY2050TOWARDSAREGIONALENERGYTRANSITION614.3ELECTRICITYUSEINCOOKINGIntheDES,improvedcookstovesandelectriccookstovesincrease8.6timesby2050comparedto2018,helpingtoachievethegoalofprovidingaccesstocleancookingtechnologiesandfuelstoall.Asof2018,37%ofhouseholdsintheregion,oraround18millionpeople,didnothaveaccesstocleancookingtechnologiesandfuels,whichresultsinindoorpollutionandhealthproblems,particularlyforwomenandchildren.Concentrationsoffineparticulatematter(PM2.5)werehighestinGuatemala,ElSalvadorandHonduras(withannualmeanlevelsof25-35μg/m3),followedbyBelize,CostaRicaandNicaragua(15‑25μg/m3)andPanama(10-15μg/m3)(WHO,2021).Thehighestsharesoftraditionalcookstovesin2018wereinNicaragua,GuatemalaandHondurasfollowedbyPanama(Figure39).Figure39:Shareofhouseholdsusingtraditionalcookstovesbycountryin2018andundertheDESin2030and205020%30%40%50%60%10%PanamaNicaraguaHondurasGuatemalaElSalvadorCostaRicaBelize203020182050Thecollectionoffuelwoodfallsmainlyonwomenandoccupiesalargepartoftheirtime(ECLAC,2020).Introducingcleancookstovesandcleancookingfuelscouldfreemoretimeforwomentoengageineducationalorpaideconomicactivities.Inaddition,womenwouldbelessexposedtohealthproblemsandotherrisksfrompollutantsemittedduringcookingoraccidentsandfromdangersduringharvesting.Finally,theintroductionofcleancookstovesandcleancookingfuelscouldrepresentanopportunityforwomentobeinvolvedincookstove-relatedbusinessesandprojects(i.e.restaurants,catering,andcookstoveproductionanddistribution).Thiswouldleadtoincomegeneration,empoweringwomenfinanciallyandgivingthemgreaterhouseholddecision-makingpower(GINN,2021).Theregionisalreadymakingeffortstoreducetheuseoftraditionalcookstoves,asreflectedinthePES.Inthisscenario,theshareoftraditionalcookstovesreaches27%in2050,andofelectricstovesreaches15%.However,intheDESfurthereffortstopromotetheuseofcleanandefficienttechnologiesoccur.Inthisscenario,thesharesforelectricstovesreach28%in2030and57%in2050,whilethesharesfortraditionalcookstovesare13%and1%respectively(Figure40).Figure40:Shareofcookingtechnologiesbytypein2018andunderthePESandDESin205011%ElectricStovesImprovedCookstove(ICS)KeroseneStovesLPGStovesTraditionalWoodstoveCookingtechnologysharesin2018Cookingtechnologysharesin2050PESCookingtechnologysharesin2050DES3%1%49%37%15%11%48%27%1%29%57%14%62RENEWABLEENERGYROADMAPFORCENTRALAMERICAIntheDES,4.2millionhouseholdsuseelectricstovesby2030and11millionhouseholdsby2050.Thisimpliestheadditionof230000electriccookstovesannuallyto2030and330000electriccookstovesannuallyfrom2030to2050.Inthisscenario,theaverageshareofelectricityconsumptiondedicatedtocookingintheregion’shouseholdsincreasesfrom6.5%in2018to13%in2030and20%in2050.Withtheintroductionofelectriccookingstoves,thedemandforliquefiedpetroleumgas(LPG)forcookingdecreases,asdoLPGimportsandthegovernmentsubsidiesdedicatedtomaintainingalowpriceofLPGforresidentialuse.Ecuador,forexample,implementedanEfficientCookingProgrammein2014tofostertheuseofelectriccookstovesratherthanLPGstoves,withtheaimofreducingthecostsforLPGsubsidies,introducingmoreefficientcookstovesandreducingtheaccidentrisksrelatedtoLPGstoves(EmpresaEléctricaQuito,2021).ThespecificcostrequirementsforcookinginresidentialbuildingsarepresentedinTable9.Toachieveacleanercookingtechnologymixin2050,additionalcumulativecostsofUSD6.3billionwouldbeneeded,asshowninFigure39,alongwithcorrespondingpolicyandfinanceschemesforexecution.Internationalco-operationcouldplayakeyroleinprovidingtechnicalandfinancialassistance.Table9:Cumulativecostincookingtechnologiesintheresidentialsectorforthe2018-2050periodunderthePESandDES(millionUSD)COOKINGTECHNOLOGYPESDESElectricstoves329211493Improvedcookstoves8871156LPGstoves72125210Traditionalwoodstoves00Total1139117859Note:Cumulativecostreferstotheacquisitioncostofthedifferenttypesofstoves.Around70%ofthehouseholdsintheregionusecleantechnologiesforcookingintheDESby2050,asshowninFigure41.ThepredominantalternativetoelectricstovesisLPGstoves,whichdonotgenerateindoorpollution,butstillitisfossilfuelbased.Incontrast,underthe2050PES,electricstovesarerepresentativeonlyinCostaRica,representing55%ofthecountry’scookstovemix.Althoughthecontextofthecountriesvariesamongthem,intermsofcookingtechnologiesavailable,fuelsused,pricesandregulatoryframeworks,aregionaleffortcouldbeconsideredtakingadvantageofthescaleandexperienceofleadingcountriesinthismatter.TOWARDSAREGIONALENERGYTRANSITION63Figure41:ShareofcleantechnologiesforcookingunderthePESandDESin205026%74%30%0%10%20%30%40%50%60%70%80%90%100%PESDESCleancookingtechnologiesNon-cleancookingtechnologies70%Note:Cleantechnologiesrefertoelectriccookstoves(conventionalandefficient),andimprovedcookstoves.Non-cleantechnologiesrefertoLPGandtraditionalfuelwood-basedunits.Tobeabletomeetthehigherelectrificationsharesincookingmentionedabove,aswellastofacilitateaccesstoelectriclightingandotherappliances,itisfundamentaltoprovideuniversalaccesstoelectricitytoallpopulationsintheregion.AccordingtotheEES2030strategy(SICA,2020),thisobjectivewouldbemetby2030.Thiswillbringnotonlyhealthbenefitstotheregion’spopulation,butalsosocialbenefitssuchasgainingaccesstolightingandinformation.Electricityuseincooking:actionsneededfortheperiod2018-2030and2030-2050•Characterisethehealth,economicandsocialstatusofthepopulationthatstillusestraditionalstoves.•Assessthecurrentstatusofcleancookingtechnologiesandidentifythebestwaytotransitiontothem.•Developspecificplansandstrategiesforfosteringthecleantechnologies,fromnationalandregionalperspectives(possiblyaregionalstrategyfollowingtheexampleoftheRTCA).•Developfinancialincentivesforthepromotionofcleancookingtechnologies.•Revisecurrentsubsidiestofossilfuelsforcookingenergycarriers.CONTRIBUTIONSTOTHEREGION•Increasedinvestmentandstimulustotheeconomies–postCOVID-19recoveryprocess.•Generationofemploymentfortheinstallation,operations,andmaintenanceofstock,consideringgenderequalityforjobapplications.•Reductioninfossilfuelimports,withthecorrespondingimpactongovermentexpenses,plusguaranteeofenergysecurity.•Reductioninlocalpollution.COMPLIANCEOFCURRENTREGIONALSTRATEGIES•EES2030•Euroclima+•NDCsTECHNICAL/FINANCIALPARTNERS•WorldBank•Inter-AmericanDevelopmentBank•CABEI–CentralAmericanBankforEconomicIntegration•CAF–DevelopmentBankofLatinAmerica•GIZ–DeutscheGesellschaftfürInternationaleZusammenarbeitACTIONSDONEBY2030•Implementtheplansandstrategiesdevelopedandassess/updatethemconsideringaregionalperspective.•Promotethefinancialincentivessetforfosteringcleancookingtechnologies.•Monitortheprogressmadeduringtheperiodtomakesurethesettargetsaremet.ACTIONSDONEBY205064RENEWABLEENERGYROADMAPFORCENTRALAMERICA5RENEWABLESDIRECTUSEINTHEEND-USESECTORSTOWARDSAREGIONALENERGYTRANSITION65RENEWABLESDIRECTUSEINTHEEND-USESECTORS19Directuseofmodernrenewablesincludesthefollowingenergycarriers:bagasse,biodiesel,bioethanol,biogas,biomass,charcoal,geothermalandsolarthermal.20Modernbioenergyincludesthefollowingenergycarriers:bagasse,biodiesel,bioethanol,biogas,biomassandcharcoal.21Traditionalbiomassreferstothetraditionaluseofbiomassforcookingandheatingpurposesinbuildings.Forcertainenergyservices,electrificationmaynotbetheonlyavailable–oroptimal–solutiontoreducetheuseoffossilfuels.Insomecases,thedirectuseofrenewablesmightrepresentamoreadequateandefficientsolution.Thedirectuseofmodernrenewables19canhelpreducefossilfueluseintheend-usesectorstodayandwouldreachan11%sharein2050intheDES.Acrosstheregion,theshareofmodernrenewablesin2018aswellasintheDESin2030and2050ishighestinBelize,CostaRicaandElSalvador,duetotheuseofbagasseandmodernbiomassintheindustrysectorsofthesecountries(Figure42).Figure42:Shareofmodernrenewablesintotalfinalenergyconsumptionin2018andundertheDESin2030and20505%10%15%20%25%PanamaNicaraguaHondurasGuatemalaElSalvadorCostaRicaBelize203020182050Modernbioenergy20couldrepresent7%ofthetotalenergydemandby2050undertheDES.Theregionhaspotentialtouseitsbioenergyresourcesaspartofthedecarbonisationenergypolicies,withapplicationsinallend-usesectors,providedthatthebioenergyisproducedinasustainablemannertoavoidenvironmentaldamagesandeffectsrelatedtochangesinlanduse.Overall,theenergydemandmixisexpectedtoevolve,asshowninFigure43.Traditionalbiomass21islessrepresentativeinthe2050DES,whilemodernrenewablesassumeahighershare.Theuseofmodernrenewablesin2050doublesunderthePESandtriplesundertheDEScomparedto2018(Figure44).Inbothscenarios,thebulkofthisuse(around70%)occursintheindustrysector.ThedirectuseofrenewablesinbuildingsintheDES2050occursmainlythroughtheintroductionofsolarwaterheatingsystems.Inthetransportsector,biofuels(mainlybiodiesel,bioethanolandbiojet)areusedmorewidelyinthePESthanintheDES,mainlybecauseelectrificationofthefleetisgreaterintheDES,andfewerinternalcombustionenginevehiclesareinuse.66RENEWABLEENERGYROADMAPFORCENTRALAMERICAFigure43:Totalfinalenergyconsumptionintheend-usesectorsbyenergycarrierin2018andunderthePESandDESin2030and205005001000150020002500201820302050201820302050Energyconsumption(TJ)TraditionalrenewableModernrenewableFossilElectricityPESDESFigure44:Demandformodernrenewablesbyend-usesectorin2018andunderthePESandDESin2050Energydemand(TJ)0%3%13%100%70%72%28%15%020000400006000080000100000120000140000PES2018PES2050DES2050BuildingsIndustryTransportTOWARDSAREGIONALENERGYTRANSITION675.1RENEWABLESDIRECTUSEININDUSTRYThedirectuseofrenewablesintheindustrialsectorleadstoareductioninfossilfueldemand,asshowninFigure45.Foodandbeverages,textilesandcementarethepredominantindustriesidentifiedintheregion,andrenewableresourcesareassumedtobeintegratedintolow-temperaturethermalprocesses.IntheDES,renewablescover33%oftheindustrialenergydemand.Additionally,iftheenergyefficiencyimprovementsproposedintheDESareimplemented,theindustrialenergydemandin2050is18%lowerintheDEScomparedtothePES.Figure45:Industryenergydemandbycarrierin2018andunderthePESandDESin205023%28%54%58%40%33%23%16%05000010000015000020000025000030000035000040000020182050PES2050DESEnergydemand(TJ)RenewableFossilElectricity26%Theanalysisofindustryenergydemandinthisstudywasdevelopedusingatop-downapproachduetothelackofinformationinthissector.Furtherresearchisneededtobettercharacterisetheregion’sindustrysectoranditsrelatedenergyconsumption,forexamplethroughthedevelopmentofindustryenergydemandsurveys.Thiswouldfacilitatebetteranalysisofthesector,aswellasmorespecificrecommendationsandthedevelopmentofaplanforindustrydecarbonisation.5.2RENEWABLESDIRECTUSEINBUILDINGSTheintroductionofsolarwaterheatersinbuildingswouldcontributetoahighershareofrenewablesdirectuseintheend-usesectors.ThenumberofinstalledunitsinthePESandDESandtheirrelatedcostsforthe2018-2050periodareshowninTable10.TheupfrontcostsforcoveringthewaterheatingneedsarehigherintheDESduetothehighercostsofsolarwaterheaterscomparedtocurrenttechnologies,mainlyLPGboilers.However,thetechnologymixproposedintheDESbringsfuelsavingsinwaterheatingofUSD6.7billioncomparedtothePESoverthestudyperiod,compensatingtheupfrontcostsneeded.Theintroductionofsolarwatersystemswouldalsobringincreasedlocalemployment,energysecurityandaccesstowaterheatingservices.68RENEWABLEENERGYROADMAPFORCENTRALAMERICATable10:Residentialsolarwaterheaterunitsin2018,andin2030and2050underthePESandtheDES,andrelatedinvestmentneedsPARAMETERS2018PESDES2030205020302050Solarwaterheatersinresidentialbuildings(units)9180414083195195338392803187Solarwaterheaterscumulativeinvestmentinresidentialbuildings(USDmillion)–505187894830Additionally,theuseofmodernbiomassinbuildingscouldbeafeasibleoptiontoprovideacleanandefficientsolutionforcooking.Inresponsetothewidespreadburningoffuelwoodintheregion,countriesareconsideringasustainablebioenergysupply,mainlyforIndigenouscommunitiesorhard-to-reachareas.UndertheDES,charcoalaccountsfor1%ofthetotalfinalenergyconsumptioninbuildingsby2050.5.3RENEWABLESDIRECTUSEINTRANSPORTLastly,theblendingofbioethanolinpetrol,biodieselindiesel,andbiojetinjetfuelcouldcontributetoreducingthefossilfueldemandinthetransportandindustrysectors.TheblendingratesassumedintheDESarehigherthanthoseinthePES.Blendingratesinvolumereach15%forbioethanoland10%forbiodieselintheDES,whicharethemaximumpossibleratessothatnotechnologychangeneedstobemadeinthecurrentinternalcombustionenginevehiclesfleet.Ifthevehiclefleetwascomposedofvehiclesthatallowshigherblendingrates,theuseofbiofuelscouldbehigherbothinPESandDES.However,duetothestrongerelectrificationofthefleetintheDES,thenumberofinternalcombustionenginevehiclesinwhichtheblendingwouldbeappliedislower,andthusthedemandforbiofuelsintheDESislowerthaninthePES,asshowninTable11.Table11:Bioethanol,biodieselandbiojetconsumptionin2018andunderthePESandDESin2030and20502018PESDES2030205020302050Bioethanol(millionlitres)0158190445172Biodiesel(millionlitres)0506742422409Biojet(millionlitres)0004775TOWARDSAREGIONALENERGYTRANSITION69Box6.SugarcanebioenergyinCentralAmerica–largeandcompetitivepotentialforenergyproductionandgreenhousegasemissionmitigationSugarcaneisanexcellentcarrierofsolarenergyandisarawmaterialofchoiceforproducingbothliquidbiofuelsandelectricity,ashasbeensuccessfullyadoptedinsomecountries.Takingadvantageoftheregion’sgoodclimateandlandavailability,sugarcanecultivationandprocessingrepresentsakeyeconomicactivityacrossthesevencountriesofBelize,CostaRica,ElSalvador,Guatemala,Honduras,NicaraguaandPanama,whereaworld-classsugaragroindustryexists,processingaround58milliontonnesofsugarcanein2019(FAO,2021).However,onlyabout12%ofsugarcaneproductionisusedforenergypurposeandthereisyetpotentialtobescaledupsignificantly.IRENAevaluatedhowmuchsugarcanebioenergycanbeproducedatwhatcost,indiversetechnologicalscenariosincludingproductivitywithanagronomicmodel,landavailability,energycanevarieties,andprocessingtechnologies(IRENAupcoming).Theresultsshowasignificantpotentialtoincreasethebioenergysupplyfromsugarcane,whichreaches15billionlitresethanol(firstgenerationwithsugarcaneonfarmland,yellowinFigure46)-71billionlitresforethanol(advancedtechnologywithenergycaneonallavailableland,greyinFigure46)and12.3–110TWhforelectricitycogeneration.Alargeshareoftheethanolpotentialinscenarioswouldbecost-competitivewithgasolineincrudeoilpricerangeofUSD50toUSD100perbarrel.Figure46:SupplycurveexampleforethanolfromsugarcaneinCentralAmericaIntegrated1Gand2Gwithsugarcane(allland)1Gwithsugarcane(farmland)Crudeoilat100USD/bbl(2014)Crudeoilat50USD/bbl(2015)Crudeoilat75USD/bbl(2018)Ethanolproductioncost(USD/L)Gasolineequivalent(USD/L)Billionslitre0.20.250.30.350.40.450.50.30.350.40.450.50.550.60.650.70.7501020304050607080Adoptingsustainablepractices,sugarcanebioenergycanbeeconomicallyattractivecomplyingwithstrictsustainabilityindicatorsandreducinggreenhousegasemissionsbyupto80%comparedtogasoline(Seabraetal.,2011).InadditiontotheconventionalblendingtogasolineordirectuseinICE,ethanolcanalsobeusedindifferentwaysforenergytransition,suchasinfuelcellelectricvehicles,eitherusinghydrogenproducedbyethanolreformonboard(NISSAN,2019)ordirectethanolfuelcells(AkhairiandKamarudin,2016),asafeedstockforbioethylenetoreplacetoreplacefossil-basedchemicals(IRENAandETSAP,2013)andforbiojetfuelsthroughalcohol-to-jetprocess(IRENA,2021d).70RENEWABLEENERGYROADMAPFORCENTRALAMERICARenewablesdirectuseintransport:actionsneededfortheperiod2018-2030and2030-2050•Organiseworkingcommiteesintegratingpublicandprivateinstitutionsandpossibletechnical/financepartners.•Developanindustrycharacterisationstudy.•Developspecificplansandstrategiesforindustrydecarbonisation(e.g.CostaRica).•Identifyspecificprojectsbyindustrysectortofacilitateaccesstofinance.•Developanincentiveprogrammeforthepromotionofsolarwaterheatersintheresidentialandcommercialbuildingssector(e.g.TermosolarPanama).•Providefinancialsupporttocovertheupfrontcostsofsolarwaterheaters.•Developspecificplansandstrategiesforbiofuelblending.CONTRIBUTIONSTOTHEREGION•Increasedinvestmentandstimulustotheeconomies–postCOVID-19recoveryprocess.•Generationofemploymentfortheinstallationandoperationsandmainternanceofstock.•Reductioninfossilfuelsimports,withthecorrespondingimpactongovermentexpenses,plusguaranteeofenergysecuritybyusinglocalrenewableresourcesforelectricitygeneration.•Reductioninlocalpollution.COMPLIANCEOFCURRENTREGIONALSTRATEGIES•EES2030•Euroclima+TECHNICAL/FINANCIALPARTNERS•WorldBank•Inter-AmericanDevelopmentBank•CABEI–CentralAmericanBankforEconomicIntegration•CAF–DevelopmentBankofLatinAmerica•GIZ–DeutscheGesellschaftfürInternationaleZusammenarbeitACTIONSDONEBY2030•Developspecificindustrialprojectstofosterdecarbonisationandmeettheobjectivessetintheplansandstrategies.•Implementtheincentiveprogrammesforthepromotionofsolarwaterheaterstoprovideaccesstowaterheatingservices.ACTIONSDONEBY2050TOWARDSAREGIONALENERGYTRANSITION716ENERGYCONSERVATIONANDEFFICIENCY72RENEWABLEENERGYROADMAPFORCENTRALAMERICAENERGYCONSERVATIONANDEFFICIENCYTheuseofenergy-efficienttechnologiesintheDEScouldhelptheregionmeetthesamelevelofenergyneedsasinthePES,butwithalowerenergydemand.Theestablishmentofenergyefficiencystandardswouldplayanimportantroleinfosteringtheuseofefficienttechnologies.EnergyefficiencycostsincreasefromUSD2.2billioninthePEStoUSD8.7billionintheDES,toreduceenergyintensity43%by2050(measuredastotalfinalenergyconsumptionperunitofGDP)(Figure47).Anongoinginitiativeintheregionaimstoimplementenergyefficiencymeasuresinbuildingstoreduceenergyconsumptionandthustheexpensesassociatedwithelectricitybills,generationcostsandfuelimports(COMIECO,2020).Somecountrieshavealreadyestablishedenergyefficiencyindexes,startingwithairconditionersandrefrigerators,whichtogetherrepresentedaround38%oftheaveragehousehold’selectricityconsumptionin2018.Figure47:EnergyIntensityin2018andunderthePESandDESin2030and20500123456EnergyIntensityDESEnergyIntensityPES205020302018Energyintensity(TJ/millionUSD)Torestricttheimportsoflessefficientproductsintheremainingcountries,regionalorganisationshaveworkedondevelopingtheCentralAmericanTechnicalRegulations(RTCAinSpanish),coveringthemainloadssuchasairconditioners,refrigeratorsandmotors.TheapprovedandplannedregulationsofcountriesweremodelledinthePES,TESandDES,specificallycoveringtheenergyservicesofspacecooling,refrigerationandlightinginthebuildingssector.Thereductioninenergyintensityisachievedthroughtheintroductionofspacecoolingandrefrigerationunitswithlowerpowerconsumption,aswellasthereplacementofconventionallightbulbs(suchasincandescent,halogenandfluorescent)withLEDs.Forthetransportsector,animprovementinfuelconsumptionduringthestudyperiodwasmodelledassumingfurtherdevelopmentsintheefficiencyoftheautomotiveindustryunderthePES,TESandDES.Electricvehiclesarealreadymoreefficientthaninternalcombustionenginevehicles(usinglessenergyperkilometre).However,thisisaccountedforinthefleetelectrificationmodelling,astheefficiencyimprovementisembeddedinthetechnologychange.TOWARDSAREGIONALENERGYTRANSITION73Theindustrysectordatacollectionanddocumentreviewprocessforthisstudyfoundthatonlylimitedinformationexistsregardingindustrialenergydemandanditsdistributioninthemainactivitiesofthesector,fromthermalprocessestotheuseofelectricityformotors,coolingandlighting.Atop-downapproachwasthereforeusedtocarryoutthemodellingoftheindustrysectorineachcountry,drawingoneconomicvariablesandenergybalances.Themainenergymeasuresintroducedwereappliedtotheestimatedenergyintensityofthesector,aswellthecarriersrequiredforfinaluses,decreasingthemagnitudeorconsumptionby2050andamongscenarios,plusreplacingtraditionalfuelswithcleaneronesorelectricity,mainlywithrenewableresourcesavailableintheregion.IntheDES,implementationoftheproposedenergyefficiencymeasuresintheindustrysector,togetherwithtechnologyswitches,reducetheshareoffossilfuelsfrom54%in2018to49%in2030and40%in2050.Thisresultsinan26%declineinemissionsforthe2018-2050periodcomparedtothePES,asshowninFigure48.Figure48:Cumulativeemissionsfromindustryfortheperiod2018-2050underthePESandDES050100150200250300350400450PESDESEmissions(MtCO)ToachievethereductioninenergyintensityshowninFigure49,cumulativecostsofUSD8.7billionoverthe2018-2050periodareneededintheDES,whichis4timesthecostsinthePES(Figure49).Inbothscenarios,thereisanegativeexpense,orsavings,inresidentialandcommerciallighting,duetothelongerlifetimeofLEDbulbsandtheaccumulatedsavingsovertime.Figure49:Cumulativeenergyefficiencycostsbysub-sectorforthe2018-2050periodunderthePESandDES-20000200040006000800010000Energyeciencycosts(millionUSD)Commercial-SpacecoolingCommercial-LightingCommercial-AppliancesResidential-CookingResidential-SpacecoolingResidential-LightingResidential-AppliancesIndustryPESDES74RENEWABLEENERGYROADMAPFORCENTRALAMERICAImportantly,thereductioninenergyintensitywouldresultinfuelcostsavingsofUSD82billionduringthestudyperiodintheDEScomparedtothePES.Consideringtheenergyefficiencyexpensesandtheresultingfuelcostsavings,investinginenergyefficiencywouldpayoffoverthe2018-2050period,achievingcumulativesavingsofUSD75billion.Energyconservationandefficiency:actionsneededfortheperiod2018-2030and2030-2050•Definetargetsforthepenetrationofefficientairconditioners,refrigeratorsandlightbulbs.•Reducetheenergyintensityoftheindustrysectoraround8%(throughimprovedinfrastructuredesignandmaterialsforenergyrecovery,betterpracticesinoperationsandmaintenance,improvedproductionprocesses,etc.).•Acceleratethedeploymentoflow-carbontechnologiesforindustrialprocessheating(biofuels,solarthermal,geothermalandmodernbioenergy).•Organiseworkingcommiteesforthedefinitionofsectoralenergyplans/programmes,integratingpublicandprivateinstitutionsandpossibletechnical/financepartners.•Continuedefiningenergystandardsforremainingcountriesandotherhigh-consumptionelectricdevices.•Definebuildingcodesfornewconstructionandretrofittingplansforoldunits.•Conductsurveysandstudiestocharacterisetheenergydemandofthesectors.•Developeffortsforfinancinginvestmentandstudiesorcreatingincentivesforenergyefficiency(e.g.currentinitiativesbybanksandgovernmentsprovidingbenefitsforenergy-efficientbuildings).•Implementbuildingcertifications(e.g.LEED).•Establishregulationsforsecond-handvehicleimportsandemissionsstandardstocontrolthequalityofthemarket.•Implementdigitalisation,demand-sidemanagementandmicrosmartgridsinend-usesectorsthroughpilotprojects.•Implementmonitoring,reportingandverification(MRV)systemstotracktheperformanceofenergyefficiencymeasures.CONTRIBUTIONSTOTHEREGION•Increasedinvestmentbynewcompaniesatalocallevel(industrialhubs),andstimulustotheeconomiesthankstocompetitiveelectricitypricesandmoresustainablityinprocessespostCOVID-19recoveryplans.•Generationofemploymentfortheinstallation,operationsandmaintenanceofnewtechnologiesandsolutions,consideringgenderequalityforjobapplications.•Reductioninfossilfuelimportsduetolessenergyrequirementsinprocessheatingorelectricitygeneration.•Increaseinenergysecuritybyusinglocalrenewableresources,resultinginreductioninlocalpollution.COMPLIANCEOFCURRENTREGIONALSTRATEGIES•EES2030•RTCAs(CentralAmericanTechnicalRegulations)TECHNICAL/FINANCIALPARTNERS•WorldBank•Inter-AmericanDevelopmentBank•CABEI–CentralAmericanBankforEconomicIntegration•CAF–DevelopmentBankofLatinAmerica•GIZ–DeutscheGesellschaftfürInternationaleZusammenarbeitACTIONSDONEBY2030•Reduceenergyintensity15%.•Increasethepenetrationofmodernbioenergyandotherrenewablesinfinalenergyconsumption.•Assesstheimpactoftheimplementedenergyefficiencyindexes.•Evaluatetheincreaseinstandards.•Evaluatetheimplementationofadistrictcoolingsystem.•Fulllydeploydigitalisation,demand-sidemanagementsolutionsandsmartgrids.ACTIONSDONEBY2050TOWARDSAREGIONALENERGYTRANSITION757HYDROGENANDITSDERIVATIVES76RENEWABLEENERGYROADMAPFORCENTRALAMERICAHYDROGENANDITSDERIVATIVES22ThemodelinvestsinsolarPVduetoitshigherpotentialintheregioncomparedtoothertechnologies,lowerinstallationcostsandeasydeployment.Off-gridprojectsareconsideredtoguaranteetherenewable/greenproductionofhydrogen.OptimalstorageisaddedassumingsteelstoragetanksatapriceofUSD500/kilogram.23Electrolyserspecifications:alkalineunitwithanefficiencyof49MWh/tonne,off-gridinstallationinadedicatedfacility,investmentcostofUSD480/kWandfixedcostsofUSD9.6/kW/year.Severalhard-to-abatesectors,suchasheavy-dutycargoshippingbytruck,mightrequiretheuseofmoreinnovativetechnologiestoachievedecarbonisation.Hydrogenanditsderivativescouldserveasalternativefuelsinthesesectors.Greenhydrogenservesasanalternativesolutionfordecarbonisingheavycargoroadtransportintheregion,aswellasanopportunityforacleanersupplyininternationalshipping.Hydrogenanditsderivativesprovideanalternativeavenuetofurtherdecarbonisesectorssuchasspecificindustrialprocesses,long-haultransport,shipping,andaviation,aspresentedinIRENA’sWorldEnergyTransitionsOutlook(IRENA,2021b).IntheanalysisofCentralAmerica,consideringthelow-to-mediumenergyintensityoftheregion’sindustries,hydrogenwasonlyintroducedintheroadtransportsectorofcountriesthatarecurrentlyconsideringgreenhydrogenasaninnovativesolutionforthecargofleet.Itisconsideredasasolutionmainlytoreachremoteorisolatedareaswherearobustpowerdistributiongridforelectricvehiclesisunfeasibleandthereisaneedforhigh-capacitychargers.TheDESofselectedcountries,namelyCostaRicaandPanama,includedhydrogenasanalternativecarrierforlargetrucks,inadditiontointensiveelectrification.Thishydrogenusestartswithasmallshareofconventionalunits,reaching1.3%oftheregionalheavy-dutyfleetby2050.Theassumptioninbothcountrieswasthathydrogenheavy-dutytruckscouldconstitute20%ofthefleetby2050,whichfollowsthevisionoftheHydrogenCouncil(HydrogenCouncil,2017).ThesesharesintheDEStranslatetohigherstocksofhydrogentrucks,electrolysersandstorageby2050,asshowninFigure50.Figure50:Stockoflargetrucksusinghydrogen,electrolysersrequiredforfuelproduction,andhydrogenstorageundertheDESin2040and2050ElectrolysersH2StorageLargetrucks20402050802MW448MW331tonnes185tonnes22.3thousandunits11.1thousandunitsWithrespecttothepowersector,Figure51showstheinstalledcapacityofrenewables(solarPV22inthiscase)andtheelectricitygenerationrequiredforthehydrogenproductionprocessintheperiod2020-2050.Intotal,698MWofcapacityand1100GWhofelectricityarerequiredfor2040,and1250MWand1973GWh23for2050,representingonly1%ofthetotalelectricitydemandintheregion.TOWARDSAREGIONALENERGYTRANSITION77Figure51:ElectricitygenerationandinstalledcapacityrequiredtoproducerenewablehydrogenbytechnologyundertheDES,2020-205002004006008001000120014001600180020002020202520302035204020452050Electricitysupply(GWh)05010015020025030035002004006008001000120014001234567HStorage(tonnes)InstalledCapacity(MW)SolarPV(MW)Electrolyser(MW)HStorage(tonnes)Asaresultofthefuelswitchreplacingconventionalunitsinthecargofleet,theshareofhydrogeninthetotalfinalenergyconsumptionofthetransportsectorrisesfrom0.6%in2040to1%in2050.Hydrogenanditsderivatives:actionsneededfortheperiod2018-2040and2040-2050•Organiseworkingcommiteesforthedefinitionofplans/strategies,integratingpublicandprivateinstitutionsandpossibletechnical/financepartners.•Developeffortstofinancestudiesandinvestmentingreenhydrogenfacilities.•Developspecificplansandstrategiesforgreenhydrogenproductionanddistribution.•Deployproduction,distributionandfuellinginfrastructuretosupplyheavy-dutyfleets.•Implementpilotprojects.CONTRIBUTIONSTOTHEREGION•Increasedinvestmentandstimulustotheeconomies–postCOVID-19recoveryprocess.•Generationofemploymentfortheinstallation,operations,andmaintenanceofstockandrequiredinfrastructure,consideringgenderequalityforjobapplications.•Reductioninfossilfuelimports,usinglocalrenewableenergyresourcesforproductionofhydrogen.•Reductioninlocalpollution.TECHNICAL/FINANCIALPARTNERS•WorldBank•Inter-AmericanDevelopmentBank•CABEI–CentralAmericanBankforEconomicIntegration•CAF–DevelopmentBankofLatinAmerica•GIZ–DeutscheGesellschaftfürInternationaleZusammenarbeitACTIONSDONEBY2040•Deployfuellinginfrastructureanddesignatariffframeworkwithlocalandregionalfuncionalities.•Improvetransportinfrastructure,networksystemsandstock.ACTIONSDONEBY205078RENEWABLEENERGYROADMAPFORCENTRALAMERICABox7.ThePanamaCanalandapossiblehydrogenhubTheCentralAmericaregion,andparticularlyPanama,hassignificantinfluenceintheinternationalshippingsector(RicardoEnergyandEnvironment,2020).WiththeimplementationoftheInternationalMaritimeOrganization’s2020regulationonemissionsfromshipping,shipsapproachingportsmustswitchtocleanerfuels(AutoridaddelCanaldePanamá,2019).ThePanamaCanalsignedtheagreement,whichenteredintoforceinJanuary2020.Panama,aspresentedinitsEnergyTransitionAgenda2020-2030(SecretaríadeEnergía-RepúblicadePanamá,2020),providesagreatopportunityforthedevelopmentofagreenhydrogenhub,duetoitsgeographicalposition,logisticsexpertiseintheregionandthePanamaCanalfacilities.Awhat-ifanalysiswascarriedouttoestimatethepotentialhydrogendemandintheregion,forbothcargotransportandshippingthroughthePanamaCanal.Forthecargofleet,itwasassumedthattheremaininglargetrucksusingdieselintheDESwouldswitchtohydrogenanditsderivativesstartingin2030,withthisfleetcompletelysuppliedby2050.Forshipping,marinefuelsalesregisteredbytheMaritimeAuthorityofPanamawereusedasreferencevaluesthatwouldbereplacedbyhydrogenanditsderivativesduringtheperiod2030-2050.Theevolutionprofileofinternationalshippingandsharesofhydrogen,ammoniaandmethanolaccordingtoIRENA’sWorldEnergyTransitionsOutlookanalysiswereconsideredtocompletetheanalysis(IRENA,2021b),aswellasenergyefficienciesandconversionfactors.Figure52showsthemostfeasiblecarriersbasedongreenhydrogentosupplytheshippingenergydemandin2050,withammoniadominatingataround80%,followedbymethanol(thesecondderivativeproposedtoreplaceconventionalfuels).Figure52:Shareofhydrogenanditsderivativesusedforshippingin2050OtherAmmoniaH2%17%81%TOWARDSAREGIONALENERGYTRANSITION79Box7.ThePanamaCanalandapossiblehydrogenhub(continued)Figure53showsthetotalhydrogensupplyneededtocovertheenergyconsumptionoflargetrucksandshipping.in2050.Around219PJwouldberequiredforbothtransportmodes,withshippingrepresentingaround80%ofthetotal.Thisaccountsforaround1800kilotonnesofhydrogenproductionin2050.Figure53:Hydrogenenergysupplybytransportmode,2020-20500500001000001500002000002500002020202520302035204020452050Energysupply(TJ)LargetrucksShippingProducingthetotalgreenhydrogenneededin2050wouldrequirearound89.5TWhofelectricitygeneration,whichassumesa47%increaseintheregionalelectricitydemand(190TWh).UsingthesameamountofsolarPVtosupplyelectrolysers,aswellasthehydrogenstorageratiothatwasusedinthelargetruckscenarios,thiswouldrequiretheinstallationof36GWofelectrolysers,15kilotonnesofhydrogenstorageand56GWofsolarPV(Figure54).ThiswouldtriplethesuggestedsolarPVcapacityin2050comparedtotheDESandpossiblyfarexceedthesolarpotentialintheregion.Theseresultsshowthatacombinationofimportsofhydrogenandderivatesfromotherregionswithlocalproductioncouldbeconsideredtosupplytheforecastedenergyrequirements.Figure54:Electricitysupplyandinstalledcapacityofelectrolysersthatwouldberequiredfordomestichydrogenproduction,2020-205001020304050607080901002020202520302035204020452050Electricitysupply(TWh)020004000600080001000012000140001600001000020000300004000050000600001234567HStorage(tonnes)InstalledCapacity(MW)SolarPV(MW)Electrolyser(MW)HStorage(tonnes)Amoredetailedanalysiswouldberequiredtoestimatetheregion’spotentialforsupplyinggreenhydrogen,eitherthroughlocalgenerationorviaregionalimportsiftherenewableenergypotentialisinsufficient.Heretoo,benefitsarisefromthelogisticsofwiderLatinAmericanintegration.Forexample,Chile’splanstoproducehydrogencouldbeintegratedintoaregionalstudytodefinethedistributionlogisticsandadditionalinfrastructureneeds,consideringtheadvantagesofthePanamaCanalfacilities.Assuminganalkalineelectrolyserwithanefficiencyof49MWh/tonne.80RENEWABLEENERGYROADMAPFORCENTRALAMERICA8SECTORACTIONNEEDEDNOWTOWARDSAREGIONALENERGYTRANSITION81SECTORACTIONNEEDEDNOWInthesection,theenergydemandin2018,aswellastheenergydemandin2030and2050intheDES(positiveaxis)andthedifferencesrelativetothePES(negativeaxis),arepresentedforthethreeend-usesectorsofbuildings,transportandindustry,aswellasforthepowersector.Thisisaccompaniedbyasetofproposedmeasuresthatenablethedecreaseinenergydemandforeachsector.Thesemeasuresserveasanoverviewofthedifferent“actions”thatwouldneedtobetakenassoonaspossibletofosterthedecarbonisationoftheenergysectorandenablethesustainableenergytransition.8.1BUILDINGSFigure55:Buildingsenergydemandin2018andundertheDESin2030and2050,andenergysavedcomparedtothePES-600000-400000-20000002000004000006000008000001000000201820302050Energydemand(TJ)WaterheatingSpaceheatingSpacecoolingPubliclightingMotivepowerLightingCookingAppliancesWater/WastewaterNote:PositivevaluescorrespondtotheabsoluteenergydemandunderDES.NegativevaluescorrespondtosavingscomparingtheenergydemandofDESwithrespecttoPES.Categoriesrefertotheshareofeachenergyserviceintheenergydemandofbuildings.Figure56:Totalfinalenergyconsumptionbycarrier,emissionsandshareofrenewableenergyinbuildingsin2018andundertheDESin2030and205000.511.522.533.540100000200000300000400000500000600000700000201820302050Emissions(MtCO)Energy(TJ)14%32%67%LPGKeroseneGasolineFuelWoodFuelOilElectricityDieselCharcoalSolartherminalDirectRE+RE-ElectEmissionsNote:Decreaseoffinalenergyconsumptioninbuildingsduetoelectrificationandenergyefficiencymeasures;RE=renewableenergy.82RENEWABLEENERGYROADMAPFORCENTRALAMERICATable12:RegionalactionsforthebuildingssectorBUILDINGS:INDICATOROFPROGRESS-STATUSIN2018ANDTARGETSFOR2030AND2050ENERGYTRANSITIONCOMPONENTINDICATORHISTORICALMOSTAMBITIOUSSCENARIO(DES)KEYACTIONS(UNIT)201820302050EnergytransitionstrategyandcomponentsEnergyconservationandefficiencyBuildingsTFEC(PJ)583448437•DevelopmentandrevisionofenergyefficiencyindexesforAirConditioners(ACs)andrefrigeratorsfortheintroductionofefficientequipmentinthefleet•Gainsofenergyefficiencyinappliancesofthecommercialbuildingsector•IntroductionofLEDlightbulbsforthesubstitutionofincandescent,halogensandfluorescentbulbs•Continuedefiningenergystandardsforremainingcountriesandotherhighconsumptionelectricdevices•Definebuildingcodesfornewconstructionsandretrofittingplansforoldunits•Implementbuildingscertifications(e.g.LEED)•Evaluatetheimplementationofadistrictcoolingsystemstartingin2030•Effortsforfinancinginvestment,studiesorcreationofincentivesforenergyefficiency(e.g.currentinitiativesbybanksandgovernmentsprovidingbenefitstoenergyefficientbuildings)•Implementdigitalisation,DSMandmicrosmartgridsinend-usesectorsthroughpilotprojects•ImplementMRVsystemstotrackperformanceofenergyefficiencymeasuresElectrificationintheend-usesectorsElectricityshareinbuildings(%)21%38%69%•IntroductionofelectricstovesforthesubstitutionoftraditionalfuelwoodorLPGcookingstoves•IntroductionofelectricwaterheatersforthesubstitutionofLPGorfuelwoodboilersforwaterheating•IntroductionofelectricheatersandheatpumpsforthesubstitutionoftraditionalfuelwoodforusageforspaceheatingpurposesTOWARDSAREGIONALENERGYTRANSITION83ENERGYTRANSITIONCOMPONENTINDICATORHISTORICALMOSTAMBITIOUSSCENARIO(DES)KEYACTIONS(UNIT)201820302050Renewablesdirectuseinend-usesectorsBiomassshareinbuildingsTFEC(includingtraditional)(%)71%49%16%•IntroductionofimprovedcookingstovesforthereplacementoftraditionalfuelwoodstovesSolarthermalandgeothermalconsumptionshareinbuildingsTFEC(heating)(%)0%1%3%•Developmentofincentiveprogrammeforthepromotionoflow-carbonsolarwaterheatingtechnologiesforcoveringwaterheatingneedsintheresidentialandinthecommercialsectors(e.g.TermosolarPanama)CO2EmissionsCO2EmissionsDirect(MtCO2/yr)3.93.53.1•Conductsurveysandstudiestocharacterisetheenergydemandofthesectors•Characterisethehealth,economicandsocialstatusofthepopulationthatstillusetraditionalstoves•Assessthecurrentstatusandidentifythebestwaytotransitiontocleanercookingtechnologies•Developspecificplansandstrategiesforfosteringthecleantechnologies,fromnationalandregionalperspectives(possibilityofregionalstrategyfollowingexampleofRTCA)•Developfinancialincentivesforthepromotionofcleancookingtechnologies•Revisecurrentsubsidiestofossilfuelsforcookingenergycarriers•MonitortheprogressmadeduringtheperiodtomakesurethetargetssetaremetTable12:Regionalactionsforthebuildingssector(continued)84RENEWABLEENERGYROADMAPFORCENTRALAMERICA8.2TRANSPORTFigure57:Transportenergydemandin2018andundertheDESin2030and2050,andenergysavedcomparedtothePES-600000-400000-2000000200000400000600000201820302050Energydemand(TJ)PassengerCargoNote:PositivevaluescorrespondtotheabsoluteenergydemandunderDES.NegativevaluescorrespondtosavingscomparingtheenergydemandofDESwithrespecttoPES.Categoriesrefertotheshareofthesub-sectorsintheenergydemandoftransport.Figure58:Totalfinalenergyconsumptionbycarrier,emissionsandshareofrenewableenergyintransportin2018andundertheDESin2030and205005101520253035400100000200000300000400000500000600000201820302050Emissions(MtCO)Energy(TJ)0%10%45%KeroseneHydrogenGasolineFuelOilElectricityDieselBiojetBioethanolBiodieselEmissionsDirectRE+RE-ElectNote:NumberofEVsintheregionin2018accordingtodatabasesusedarelessthan50units.Thus,thelowshareofelectricityusewithrespecttofleetandfinalenergyconsumptionofthesector.TOWARDSAREGIONALENERGYTRANSITION85Table13:RegionalactionsforthetransportsectorTRANSPORT:INDICATOROFPROGRESS-STATUSIN2018ANDTARGETSFOR2030AND2050ENERGYTRANSITIONCOMPONENTINDICATORHISTORICALMOSTAMBITIOUSSCENARIO(DES)KEYACTIONS(UNIT)201820302050EnergytransitionstrategyandcomponentsEnergyconservationandefficiencyTransportTFEC(PJ)467546456•ImprovementofthefuelconsumptionenergyefficiencyofICEvehicles•Reducetransportvolumeandcongestionbymodalshift(2.5%ofdistancetravelledfromcarsswitchedtobikes,5%ofdistancetravelledfromcarsswitchedtoE-Buses)Electrificationintheend-usesectorsElectricityshareintransport(%)0%6%44%•Introductionofelectricvehiclestothefleetby2030,particularly:motorcycles,cars,SUVs,minibuses,buses,lightandheavy-dutytrucks.•Effortsforfinancinginvestmentinelectromobility(e.g.currentinitiativesbybanksandgovernmentsprovidingclientswithspecialbankloansconditionsforEVsacquisition(PNUMA,2021).•Deploysmartchargingsolutionsanddesigntarifsframeworkwithlocalandregionalfuncionalities•BusinessmodelsandregulationforEVcharging•AcceleratetheshifttoelectromobilitybygivingEVspriorityincityaccessstartingin2030Renewablesdirectuseinend-usesectorsBiofuelsshareintransportTFEC(%)0%4%4%•Introductionofbiofuelblending,particularlybioethanol,biodieselandbiojetingasoline,dieselandjetfuelrespectively.HydrogenanditsderivativesGreenhydrogenshareintransportTFEC(%)0%0%1%•Developspecificplansandstrategiesforgreenhydrogenproductionanddistribution•Deployproduction,distributionandfuelinginfrastructuretosupplyheavydutyfleet•Implementpilotprojects•Deployfuelinginfrastructureanddesigntarifsframeworkwithlocalandregionalfuncionalities86RENEWABLEENERGYROADMAPFORCENTRALAMERICAENERGYTRANSITIONCOMPONENTINDICATORHISTORICALMOSTAMBITIOUSSCENARIO(DES)KEYACTIONS(UNIT)201820302050CO2EmissionsCO2EmissionsDirect(MtCO2/yr)303417•Organiseworkingcommiteesintegratingpublicandprivateinstitutionsandpossibletechnical/financepartners•Assesscurrentsituationofthesectortoidentifybarriersanddefinepriorities•Developspecificplansandstrategiesforsustainablemobility(e.g.CostaRica,Panama)•Implementpilotprojects(e.g.CostaRica,Panama)•Improvetransportinfrastruture,networksystemsandstock•Establishregulationsforsecond-handvehiclesimportsandemissionsstandardstocontrolthequalityofthemarket8.3INDUSTRYFigure59:Industryenergydemandin2018andundertheDESin2030and2050,andenergysavedcomparedtothePES-100000-50000050000100000150000200000250000300000350000201820302050Energydemand(TJ)ProcessheatElectricalappliancesNote:PositivevaluescorrespondtotheabsoluteenergydemandunderDES.NegativevaluescorrespondtosavingscomparingtheenergydemandofDESwithrespecttoPES.Categoriesrefertotheshareoftheenergyserviceintheenergydemandofindustry.FurthermeasuresforemissionreductionandrenewablepenetrationinthesectorareavailableinBox3.Table13:Regionalactionsforthetransportsector(continued)TOWARDSAREGIONALENERGYTRANSITION87Figure60:Totalfinalenergyconsumptionbycarrier,emissionsandshareofrenewableenergyinindustryin2018andundertheDESin2030and205002468101214161820050000100000150000200000250000300000350000400000450000201820302050Emissions(MtCO)Energy(TJ)39%47%57%BiomassFuelWoodNaturalgasCokeGasolineSolarthermalDieselGeothermalSugarcaneproductsElectricityKeroseneFuelOilLPGDirectRE+RE-ElectBiogasBioethanolBiodieselEmissionsTable14:RegionalactionsforindustryINDUSTRY:INDICATOROFPROGRESS-STATUSIN2018ANDTARGETSFOR2030AND2050ENERGYTRANSITIONCOMPONENTINDICATORHISTORICALMOSTAMBITIOUSSCENARIO(DES)KEYACTIONS(UNIT)201820302050EnergytransitionstrategyandcomponentsEnergyconservationandefficiencyIndustryTFEC(PJ)186232307•Reduceenergyintensityoftheindustrysectorinca.8%by2030anddoublefactorby2050(improvementofinfrastructuredesignandmaterialsforenergyrecovery,betterpracticesinO&M,improvementofproductionprocesses,etc.)•Implementdigitalisation,DSMandmicrosmartgridsinend-usesectorsthroughpilotprojects•ImplementMRVsystemstotrackperformanceofenergyefficiencymeasuresElectrificationintheend-usesectorsElectricityshareinindustry(%)23%24%28%•Electrificationofindustriallowtemperatureprocessheatingapplications88RENEWABLEENERGYROADMAPFORCENTRALAMERICAENERGYTRANSITIONCOMPONENTINDICATORHISTORICALMOSTAMBITIOUSSCENARIO(DES)KEYACTIONS(UNIT)201820302050Renewablesdirectuseinend-usesectorsModernbioenergyshareinindustryTFEC(%)19%19%20%•Developspecificplansandstrategiesforbiofuelsblending(dieselandgasoline)•Introductionoftheuseofbiogas•Useofbiomassforhightemperaturethermalprocesses(i.e.cementproduction)SolarthermalandgeothermalconsumptionshareinindustryTFEC(heating)(%)0%5%11%•Accelerationoflow-carbontechnologydeploymentforindustrialprocessheating,particularlyofsolarwaterheatingandgeothermalsolutions•ProvisionoffinancialhelptofacetheupfrontcostsofthesetechnologiesCO2EmissionsCO2EmissionsDirect(MtCO2/yr)8.17.37.8•Organiseworkingcommiteesintegratingpublicandprivateinstitutionsandpossibletechnical/financepartners•Developanindustrycharacterisationstudy•Developspecificplansandstrategiesforindustrydecarbonisation(e.g.CostaRica)•Identificationofspecificprojectsbyindustrysectortofacilitateaccesstofinance8.4POWERSECTORFigure61:Electricitygenerationbytechnology,emissionsandshareofrenewableenergyinthepowersectorin2018andundertheDESin2030and205002468101214020000400006000080000100000120000140000160000180000200000201820302050Emissions(MtCO)Electricity(GWh)WindmillThermal-SugarcaneproductsThermal-NaturalGasThermal-FuelOilThermal-DieselThermal-CoalThermal-BiogasSolarPVSolarCSPHydroplantGeothermalEmissions73%81%97%RE-ElectTOWARDSAREGIONALENERGYTRANSITION89Table15:RegionalactionsforthepowersectorPOWERSECTOR:INDICATOROFPROGRESS-STATUSIN2018ANDTARGETSFOR2030AND2050ENERGYTRANSITIONCOMPONENTINDICATORHISTORICALMOSTAMBITIOUSSCENARIO(DES)KEYACTIONS(UNIT)201820302050EnergytransitionstrategyandcomponentsDistributedenergyresources•IntroductionofdistributedPVsolargenerationsystemsforthegenerationofelectricityinbuildingsPlanning•Prepareandplanfordevelopmentofasetofrobustrenewableenergyprojects,reinforcingSICA'sroleashighersharesofvariablerenewableenergyaremorecloselyincorporatedwithintegratedsystemplanning.Tradeagreement•Introductionofaregionalmarketasmainday-aheadmarket•Implementationofaregionalbalancingandancillaryservicesmarket,toshareoperationalreservesandnon-energyservicesRegulation–Price•Regulationtoensurethereisharmonybetweenprice/tariffregulationstopreventunfaircompetitionintheregion.Thisshouldalsobringfairtradebetweendifferentcountriesandhaveenforcementstrength,thereshouldbeproperregionalagreementstodealwithsuchsituations,sobenefitsoflowerelectricitypricesandcostsofregionalintegrationarefairlydistributed.Gridsandstorage•IncreaseofSIEPAClineinterconnectioncapacityfrom300MWtoupto2GW•InstallationofstoragetoaidintegrationofrenewablesbyshiftingsolarPVproductiontonightperiods•Flexibilisationofelectricvehiclesbyintroducingsmartchargingstrategies•Developanddeployincreasedmonitoringandobservabilityoftransmissionanddistributionsystemstoaidintegrationofdistributedtechnologiesandharnessinnovationsinflexibility.•InstallationofelectrolysersfordomesticproductionofgreenhydrogenandpowersystemflexibilityFinance•Prepareforadoublingofthefinancerequiredintheregion,uptoatotalofUSD72billion,forthepowersectortoensuredeliveryofrenewableprojects,storage,domesticandinternationaltransmissiontoprovidelowercostpowersupplyanddeliversignificantlocaleconomicbenefitsRenewablesinthepowersectorTotalInstalledcapacity(GW)172765Totalelectricitygeneration(TWh)5683182Renewablesshareincapacity(%)67%73%91%Variablerenewablesshareincapacity(%)13%27%46%Renewablesshareingeneration(%)73%81%97%Variablerenewablesshareingeneration(%)6%14%21%CO2EmissionsCO2EmissionsDirect(MtCO2/yr)12.912.82.390RENEWABLEENERGYROADMAPFORCENTRALAMERICABox8.InsightsofcountriesandregionalinstitutionsoftheRenewableEnergyRoadmapforCentralAmericaanalysisAfinalregionalworkshopwasorganisedinNovember2021aftersharingapreliminarydraftofthereportwiththeCentralAmericancountriesandmultilateralregionalinstitutions.Theobjectiveoftheworkshopwastoprovidethecountriesandmultilateralinstitutionswithaspacetosharetheirexperienceduringtheprojectandtheirinsightsabouttheresultsofthestudy.Thecloseengagementandco-operationduringtheprocesswasacknowledgedbycountries.Theanalysisprovidedvaluableinputsforthedefinitionofnationalplans,includingtheupdateofcountryNDCs.Forinstance,theanalysisinputsservedasabasisforthedefinitionoftheend-useandpowersectoremissionstargetsinBelize’supdatedNDCs.Likewise,ElSalvadorconsideredtheresultsoftheanalysistosetmoreambitiouspowersectortargetsintheNDCsandtoincludeadditionalonesinthetransportsector.Thetechnologiesandmeasuresthatwerepresentedinthemostambitiousscenariosinboththedemandandsupplyside,openedarangeofnewsustainablepossibilitiesforsomecountries.Thissetofactionswashighlyappreciatedbycertaincountries,whicharenowplanningtodeepentheirknowledgeinthesetopics.Keepingabalancebetweenhavingacosteffective,sustainable,andreliableenergymixwasconsideredasakeypointforthedevelopmentofcountry´senergysystems.Throughouttheproject,anexerciseofcapacitybuildingandknowledgetransferwascarriedout,whichisconsideredessentialforthecountriestobeabletofollowupwiththeanalysisandtokeeponworkingindependentlyinsimilarinitiatives.Thedatarichnatureoftheanalysiswashighlyappreciatedbycountries,asitprovidesgroundsforthedevelopmentofpolicieswithclearandmeasurableobjectives.Theimportanceofdefiningplansandactionsthatensuretheimplementationofthepoliciesandthecomplianceoftheobjectiveswashighlighted.Acomprehensivemonitoringofitsachievementisconsideredcrucialtohaveaclearunderstandingofitsrelatedimpact.Oncethespecificplans,actionsandresponsibleactorsfortheirimplementationaredefined,accesstofinanceandtechnicalco-operationbecomesthenakeychallenge,accordingtocountries.Stakeholdersoftheregionbelievethattheavailabilityoffundsandprivate-publicinstrumentsforthedevelopmentofpilotprojectswouldgreatlyfostertheuseofrenewableenergytechnologiesandenergyefficiencymeasuresinallsectors.Forinstance,inthecasesofGuatemalaandHondurasthesefeasibilitymechanismscouldsupportthecountriestotransitiontocleanertechnologiesforcooking.Duringthepaneldiscussionitwasemphasisedthathavingaregionalperspectiveoftheoperationandexpansionoftheenergysystemcouldhelpcountriestofurtherexploittheirlocalresourcesandlookforcomplementarityfromotheravailableresourcesinneighbouringcountries.AccordingtoNicaragua,therecouldbechallengesforthecommissioningofprojectstoexpandthetransmissionnetwork,astheseprojectsneedtobeapprovedbytheregionalinterconnectionentitybasedontheirderivedsocialbenefits.Theanalysiscomplementsthisrequirementprovidingseveraloperationalbenefits,includingthereinforcementoftheenergysecurityoftheregion.Additionally,countriespositivelyconsidertheimportanceofworkingtogetheronjointinitiativesandsharinggoodpractices.Someexamplesofongoingbilateralco-operationincludethejointprojectbetweenPanamaandElSalvadorforthecertificationofenergyefficiencyprofessionalsandenterprises;intermsofelectromobility,itcouldbehighlightedthetriangularco-operationofGermany,CostaRicaandHondurastodeploythistechnologyinthelattercountry,andthefosteringprojectbetweenCostaRicaandPanama,inwhichelectricchargershavebeeninstalledalongtheca.900kmroutethatconnectsthecapitalcities,SanJoséandCiudaddePanamá.Inconclusion,theRenewableEnergyRoadmapforCentralAmericaconstitutesadatarichstudythatprovidesanoutlookoftheregionalenergysystem,focusingatthesametimeonthecontextofeachcountry,andthataimstoidentifyandaddressthemainchallengesofconcern.Duringitsdevelopmenttherewasanexerciseofknowledgetransfer,whichhasbeengreatlyappreciatedbycountries.Additionally,itprovidedaspacefordialogueandexperiencessharingthatisfacilitatingthedevelopmentofasustainableandreliableenergysystemintheregion.TOWARDSAREGIONALENERGYTRANSITION91REFERENCESAkhairi,M.A.F.andKamarudin(2016),“Catalystsindirectethanolfuelcell(DEFC):Anoverview,”InternationalJournalofHydrogenEnergy,Vol.41,No.7,www.sciencedirect.com/science/article/abs/pii/S0360319915027846(accessed17November2021).AutoridaddelCanaldePanamá(2019),“ReminderconcerningFuelRequirementsinthePanamaCanal,”www.pancanal.com/common/maritime/advisories/2019/a-39-2019-1.pdf(accessed14September2021).BNEF(2020),“Bat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thedition),”https://movelatam.org/4ta-edicion/(accessed19August2021).RicardoEnergyandEnvironment(2020),“Zero-CarbonforShipping-PropellinginvestmentinSouthandCentralAmericawithhydrogen-basedshippingsolutions,”www.researchgate.net/publication/344554235_Zero-Carbon_for_Shipping_Propelling_investment_in_South_and_Central_America_with_hydrogen-based_shipping_fuels.SeabraJ.E.A.etal.,(2011),“LifecycleassessmentofBraziliansugarcaneproducts:GHGemissionsandenergyuse,”Biofuels,BioproductsandBiorefining,Vol.5,No.5,pp.519–532,https://doi.org/10.1002/bbb.289.SICA(2020),“EstrategiaEnergéticaSustentable2030delospaísesdelSICA,(SustainableEnergyStrategy2030oftheSICAcountries),”www.cepal.org/es/publicaciones/46374-estrategia-energetica-sustentable-2030-paises-sica.SNE(2020),“LineamientosEstratégicosdelaAgendadeTransiciónEnergética2030,(StrategicGuidelinesoftheEnergyTransitionAgenda2030),”www.gacetaoficial.gob.pa/pdfTemp/29163_B/81944.pdf.Trahey,L.etal.,(2020),“Energystorageemerging:AperspectivefromtheJointCenterforEnergyStorageResearch,”ProceedingsoftheNationalAcademyofSciences,Vol.117,No.23,pp.12550–12557,https://doi.org/10.1073/pnas.1821672117.WHO(2021),“ConcentrationsoffineParticulateMatter(PM2.5),”www.who.int/data/gho/data/indicators/indicator-details/GHO/concentrations-of-fine-particulate-matter-(pm2-5)(accessed19August2021).94RENEWABLEENERGYROADMAPFORCENTRALAMERICAANNEXA.OVERVIEWOFMAINONGOINGINITIATIVESANDPLATFORMSIDENTIFIEDINCENTRALAMERICA2424National/bilateralinitiativesconsideredarecurrentlypublishedorapproved.•Setofregionalactionsby2030intheSICAcountriesgroupedin14topics,includingenergysources(diversificationoftheenergymatrix–fuelsandnewrenewables),energyaccess,regionalintegration,transportsector,regulationsandstandardisation,rationalandefficientuseofenergy,smartgrids,financingandinstitutions.www.cepal.org/es/publicaciones/46374-estrategia-energetica-sustentable-2030-paises-sica•TechnicalRegulationsofCentralAmericaintermsofenergyefficiencyindexesforhigh-demandelectricdevices(i.e.spacecooling,refrigeration,lighting,motors).www.sica.int/download/?gofd_116071_1_26112018.pdf•ProjectthatsupportsGuatemala,Honduras,NicaraguaandBelizeintheirnationalinitiativestocurbtheconsumptionoffuelwood.www.sica.int/iniciativas/usososteniblelenia•RegionalprojectaspartoftheGeothermalDevelopmentinCentralAmericaprogramme,carriedoutwithintheframeworkoftheGermanClimateTechnologyInitiative(DKTI).www.sica.int/iniciativas/fogeo•Platformforelectro-mobilityinLatinAmericaandtheCaribbean.•Regionalreportsofstatusofnormatives,statistics,incentiveframeworks,recommendationsforfurtherdeployment,andothertopicsrelatedtoelectro-mobilityandairquality(foureditions).https://movelatam.org•LinesofactionintheEuropeanregion,includingplansandpolicies,climatefinancing,transparency,Intersectoral,multi-levelandmulti-stakeholderco-ordination,actionforclimateempowerment,genderandvulnerablegroups.https://euroclimaplus.org/en/lines-of-action/plans-and-policies•PromotionofgeothermaldevelopmentinCentralAmerica,specificallyinCostaRica,ElSalvador,Guatemala,Honduras,NicaraguaandPanama.www.giz.de/en/worldwide/78071.html•DecarbonisationPlan(CostaRica)•Industrydemandcharacterisation(CostaRica)•Electro-mobility/Sustainablemobilitystrategies(CostaRica,Panama)•Solarthermalmarketdevelopment(Panama,ElSalvador)•Energyefficiencyindexesand/orcapacitybuilding(Panama,CostaRica,ElSalvador)NOTABLENATIONAL/BILATERALPLANS/STRATEGIES/PROGRAMMESSUSTAINABLEENERGYSTRATEGY2030–EES2030(SICA)RTCA(SICA)RATIONALUSEOFFUELWOOD(SICA)GEOTHERMALENERGYDEPLOYMENT(SICA)MOVELATAM(UNEP)EUROCLIMA+PROJECTSGEOTHERMALPROGRAMME(GIZ)TOWARDSAREGIONALENERGYTRANSITION95ANNEXB.KEYASSUMPTIONSOFTECHNOLOGYCOSTSANDFOSSILFUELPRICES25Smallprivatechargersrefertohomechargersoftypically3.6kWto7kWformotorcycles,carsandsportutilityvehicles(SUVs);smallpublicchargersrefertochargersoftypically22kW.Largeprivateandpublicchargersrefertochargersof<50kWforvans,mini-buses,buses,andsmallandlargetrucks.ThekeyassumptionsfortheinvestmentanalysisarepresentedinTable16,whichincludesamongothers:investmentcostsofmainrenewableelectricitytechnologiesandnaturalgas,averageacquisitioncostsofselectedend-usesectortechnologieswithhighenergyconsumptionoraffordabilityimpactintheregion(e.g.vehiclesanditscharginginfrastructure25costs)andaveragefossilfuelsprices,mainlyusedinendusesectors.Furtherinputsintermsoftechnicalfeaturesoractivitylevelrequiredfortheenergymodellingwillbeavailableonline.Table16:Keyassumptionsoftechnologycostsandfossilfuelprices201820302050REFERENCESElectricitygenerationparametersRenewable-basedtechnologyinvestmentcost(USD/kW)Hydropower144514451430•ECJRC(2017),“Costdevelopmentoflowcarbonenergytechnologies,”https://publications.jrc.ec.europa.eu/repository/bitstream/JRC109894/cost_development_of_low_carbon_energy_technologies_v2.2_final_online.pdfSolarPV–utility1200590320SolarPV–distributedgeneration1400680375Bioenergyandwaste150015001500Geothermal460041753860Windonshore142013001220SolarCSP735053554535Fossilfuel-basedtechnologyinvestmentcost(USD/MW)Naturalgas(CombinedCycle)890890890•EIA(2021),“CostandPerformanceCharacteristicsofNewGeneratingTechnologies,AnnualEnergyOutlook2021,www.eia.gov/outlooks/aeo/assumptions/pdf/table_8.2.pdfEconomicsDiscountrate10%10%10%•IRENAassumption.96RENEWABLEENERGYROADMAPFORCENTRALAMERICA201820302050REFERENCESEnd-usesectorstechnologiesparametersResidentialtechnologycost(USD/unit)LPGstove450450450•Averagevalueofdataconsultedinmaincommercialstoresofeachcountry.Electricstove725725725Transporttechnologycosts(USD/unit)Electricmotorcycle200014731200•Averagevalueofdataconsulted,andquotationsrequestedinmainvehicledistributorsofeachcountry.Electriccar300002000015000ElectricSUVs600004500039785Electricminibus700005000040000Electricbus16000010000080000Electricsmalltruck600004000030000Electriclargetruck15000010000075000Transporttechnologycosts(USD/unit)Smallprivatecharger100010001000•IRENAresearch.Averagevalueofdataconsulted.Smallpubliccharger300030003000Largeprivateandpubliccharger425004250042500Conventionalmotorcycle(gasoline)150015001500•Averagevalueofdataconsulted,andquotationsrequestedinmainvehicledistributorsofeachcountry.Conventionalcar(gasoline)150001500015000Conventionalcar(diesel)180001800018000ConventionalSUV(diesel)400004000040000Conventionalminibus(diesel)350003500035000Conventionalbus(diesel)800008000080000Conventionalsmalltruck(diesel)300003000030000Conventionallargetruck(diesel)750007500075000Table16:Keyassumptionsoftechnologycostsandfossilfuelprices(continued)TOWARDSAREGIONALENERGYTRANSITION97201820302050REFERENCESFossilfuelspricesElectricitygeneration(USD/TJ)Naturalgas758075807580•IRENAassumption.End-usesectors(USD/TJ)Diesel143561522617970•CCHAC“PreciospromediodecombustiblesalconsumidorenCentroamérica”(reportsof2018,2019,2020,2021)•ECLAC(2020),“CentroaméricaylaRepúblicaDominicana:estadísticasdehidrocarburos,2019.”•EIA(2020),“Table3.EnergyPricesbySectorandSource,”•EIA(2021),“U.S.NaturalGasPrices”.Fueloil106381087115221Gasoline154951494018272Kerosene157501705122365LPG227552605132443Naturalgas-93679926Table16:Keyassumptionsoftechnologycostsandfossilfuelprices(continued)98RENEWABLEENERGYROADMAPFORCENTRALAMERICAANNEXC.DATAREFERENCESFORTHEREMAPANALYSISTheenergymodelling,emissionsandinvestmentanalysisoftheregionrequiredtherevisionofvariousdocumentsanddatabasesfromthecountries,regionalentities,andmultilateralorganisations,aswellasinternationalreferencestocomplementthestudy.ENERGYMODELLINGRegionalACP(2021),“TraficoporelCanaldePanamáporsegmentodemercado.Añosfiscales2020-2019,(Panamacanaltraficbymarketsegment.Fiscalyears2020-2019).”AMP(2021),“Ventadecombustiblemarinoatravésdebarcaza,(Marinefuelsalesthroughbarge).”R.Berger(2017),“FuelCellsandHydrogenApplicationsforRegionsandCitiesVol1.”CEPAL(2017),“EstadísticasdelsubsectoreléctricodelospaísesdelSistemadelaIntegraciónCentroamricana(SICA)2015,(StatisticsoftheelectricsubsectoroftheSICAcountries2015).”CEPAL(2019),“EvaluacióndeescenariosparalaformulacióndelaEstrategiaEnergéticaSustentableSICA2030,(ScenariosevaluationfortheformulationofthesustainableenergystrategySICA2030).”CEPAL(2020a),“EstrategiaEnergéticaSustentable2030delospaísesdelSICA,(Sustainableenergystrategy2030oftheSICAcountries).”CEPAL(2020b),“SociodemographicStatistics,”www.cepal.org/en/datos-y-estadisticas.CEPAL(2020c),“CensusStatistics-REDATAM,”www.cepal.org/en/topics/redatam.ECJRC(2017),“Costdevelopmentoflowcarbonenergytechnologies,”p.77.EIA(2021),“CostandPerformanceCharacteristicsofNewGeneratingTechnologies,AnnualEnergyOutlook2021,”p.4.ElementEnergyLtd(2019),“Hydrogenintransport:Hydrogencars,vansandbuses.”IDB(2017),“LaReddelFuturo:DesarrollodeunaredeléctricalimpiaysostenibleparaAméricaLatina,(Thegridofthefuture.DevelopmentofacleanandsustainableelectricgridforLatinAmerica)”IPCC.(2020),“IPCCDataonEmissionFactors,”www.ipcc.ch/data/.Kim,K.etal.,(2020),“APreliminaryStudyonanAlternativeShipPropulsionSystemFueledbyAmmonia:EnvironmentalandEconomicAssessments,”JournalofMarineScienceandEngineering,Vol.8,No.3,p.183,https://doi.org/10.3390/jmse8030183.MOVE(2020),“ReportedeMovilidadEléctrica,(Electricmobilityreport).”OLADE(2004),“GuíaM-5MetodologíadeConversióndeUnidades,(M-5guide.Methodologyforunitconversion).”TOWARDSAREGIONALENERGYTRANSITION99OLADE(2018),“EnergyBalances.”OLADE(2020),“EnergyOutlookofLatinAmericaandtheCaribbean2019.”Ø.Sekkesæter(2019),“EvaluationofConceptsandSystemsforMarineTransportationofHydrogen.”Transport&Environment(2020),“Comparisonofhydrogenandbatteryelectrictrucks:Methodologyandunderlyingassumptions.”WorldBank(2021),“SociodemographicStatistics,”https://data.worldbank.org/.BelizeAmbroseTillett,J.LockeandJ.Mencias(2012),“NationalEnergyPolicyFramework,”p.368.BEL(2018),“2018AnnualReport-Powersector.”K.BunkerandR.Torbert(2018),“BelizeConsolidatedProjectPlan,”p.134.CASTALIA(2015),“BelizeSustainableEnergyStrategy.”CCCCCandM.Linders(2016),“PotentialStudyonproducibleBiogasandRenewableEnergyfromBiomassandOrganicWasteinBelize,”p.44.EGIS(2018),“PreparationofaComprehensiveNationalTransportationMasterPlanforBelize.pdf.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