Central America Set to Power Up With Addition of 27 Generation Plants by 2024

The region will add 1.66 GW of generation capacity with the construction of power plants in six countries, with the largest number of new plants to be built in Panama

Of the new projects under development, 11 are solar facilities.
February 09, 2023 | 09:13 PM

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Bloomberg Línea — Between January 2023 and December 2024, 27 electricity generation projects are slated to begin operations in Central America, and which will contribute 1.66 GW of new capacity to the countries of the region.

The 2023-2024 Central American Operational Planning Report of the Regional Electricity Market Operator (EOR) lists all the plants in development, among them the 300 MW Puerto Sandino natural gas power station in Nicaragua, which has a projected start-up date of July 2023.

The 198.7 MW Tomillo hydroelectric plant in Honduras is expected to be completed in June 2024, while the biggest of the projects in development on the isthmus, the 656 MW Gatun natural gas power plant in Panama, is slated to enter operations in September 2024.

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Thirteen of the new plants will be solar powered, while, in terms of capacity, the largest proportion will be generated by natural gas-fired plants, accounting for 58% of the total new generation capacity, while solar will represent 18%, hydroelectric 21% and 3% from wind, biomass and geothermal projects.


Panama will add the largest number of new power plants, with 11 in total, followed by El Salvador with eight and Nicaragua with four, while Costa Rica will add two and Guatemala and Honduras one each.

Five of the power generation plants under construction in Panama are solar facilities, six are hydroelectric and one is natural gas-fired, while six of the power plants to be built in El Salvador with be solar, two of which will have 55 MW generation capacity, with one thermoelectric and one geothermal plant.

The two plants under construction in Costa Rica are a hydroelectric facility and a wind farm, both with 20 MW generation capacity.


Guatemala is building the 20 MW, Pojom II hydroelectric plant, which is slated to open in January 2024.

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Uneven demand growth

According to the OER, Central America’s energy demand will grow 4.3% year-on-year in 2023, while demand in 2024 is seen growing 4.5% with respect to 2023.

However, there are notable differences between the demand growth estimates for the six countries in the region.

“On the one hand, the highest projected growth is observed for Panama with 7.99% in 2023 and 8.48% in 2024, while the most conservative projected growth is for Costa Rica, with 1.69% in 2023 and 2.2% in 2024,″ according to the report.


In supplying the increasing demand, it is estimated that renewable energy will contribute an average of 79.2% of the energy required during 2023 and 2024, of which 51.4% corresponds to hydroelectric generation, 12.7% to variable renewable generation (wind and solar(), and 7.8% to biomass and 7.3% to geothermal generation.

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Thermoelectric generation is expected tol contribute an estimated 18.7% on average this year and next, while the contribution of coal-fired plants will be 7.3%, natural gas plants with a 6.6% share and oil-fired plants with 4.8%.

The Mexico-Guatemala interconnection, through which the northern neighbor supplies power to the Central American country, contributes 1.6% to the region’s power matrix.

As the new plants come online, the region will also see the mothballing of 18 power plants, in Nicaragua and Costa Rica, which will reduce generation capacity by 503.79 MW, while two hydroelectric power plants in Costa Rica generating a total 198 MW will be temporarily disconnected from the grid.

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