San José, Costa Rica, since 1956

Energy Plan Unveiled

Costa Rica’s executive branch presented its plan for the future of Costa Rica’s energy sector on Wednesday.

The strategy, “Toward a New Energy Model for our Country” acknowledges critical holes in Costa Rica’s energy market and demands greater use of renewable energy sources.

While the plan offers some concrete schemes for filling gaps in the country’s electricity sector, its ideas for the transportation sector, where the majority of the country’s foreign oil is consumed, lacked a coherent vision.

And, in a press conference following Wednesday’s presentation, the government’s oil and transport gurus couldn’t articulate specific proposals for reducing the country’s dependence on fossil fuels.

Costa Rica produces upwards of 90 percent of its electricity from renewable energy sources, the majority from hydroelectric plants. And although the country has the capacity to produce 25 percent of the nation’s energy needs from thermal plants, it has historically relied on these stations, which burn bunker fuel, for less than 10 percent of annual production.

The new plan proposes phasing out the petroleum-based electricity generators over the next 10 years, achieving complete reliance on renewable energy sources for the production of electricity by 2021. The current administration is actively pushing for the legal and technical mechanisms to fall into place for this to happen (see box).

But the path for transforming the dependence on petroleum in the transportation sector isn’t as clearly lit.

Costa Rica produces no petroleum and imports close to three million tons of it per year. In 2008, these imports led to a record $2.1 billion tab, a sum expected to be similar this year. Approximately 80 percent of imported oil is used to fuel transport.

Just as worrying is the rate of car purchases.

In 1963, there was one car on the road for every 112 inhabitants in Costa Rica. By 2000, that number grew to one vehicle for every 5.8 inhabitants and, last year, reached one per 3.6 residents for a total of more than 1.2 million cars in a country of only 4.5 million people.

“In a word, the situation in our transportation sector is ‘sad,’” said Teófilo de la Torre, Minister of the Environment, Energy and Telecommunications (MINAET). “And these vehicles are all part of the problem.”

In hopes of easing the demand for petroleum, the new energy plan proposes to “progressively” introduce biofuels, and electric and hybrid vehicles to the national market as well as develop a more efficient road network.

The strategy also discusses the possibility of using electricity and natural gas for public transit.

While the country has recently adopted tax breaks for hybrid and electric vehicles, the reality is that these new models are still far out of the reach of most Costa Rican pocket books.

Costa Rican President Laura Chinchilla said that the country will seek incentives for importing these cars to help soften prices at the dealer. She said that experts are working on a “master transportation plan” which will “define the strongest actions we have to take in the country in order to mitigate the demand for petroleum.”

Chinchilla did not propose a deadline for this plan.

Meanwhile, the biofuels program is nearly two years behind schedule.

In October 2009, a year after the program was supposed to have been launched, the National Oil Refinery (RECOPE) announced that the national biofuels plan would be underway across the country “by March 31, 2010.” It’s now July and gas pumps are still spitting out unmixed petrol.

“It is a process that we are finishing,” said Jorge Villalobos, president of RECOPE. He noted that the refinery will be producing biodiesel within the first 100 days of his direction at RECOPE. That benchmark comes on Aug. 16.

And while the use of cleaner natural gas has sprouted in some countries as a substitute for diesel or gasoline in mass transportation, it has never been tested on a large scale in Costa Rica. Thus, its potential here is unknown.

“We aren’t sure,” De la Torre said. “It is something we are studying with care.”

Government officials on Wednesday seemed informed about the costly and unhealthy dependence on imported petroleum and were aware of the trends that can help reroute the oil slicked transportation sector.

But when pressed about the details of implementing some of these new actions, officials couldn’t provide specifics.

“The transition to renewable energy has to be slow,” Villalobos said. “It’s not something you do from one moment to the next.

We have to plan the best scheme possible in order to move away from petroleum.”

Without having defined the how, the what or the when, Chinchilla’s team of experts left a room full of skeptical journalists with an unclear picture of Costa Rica’s supposed future in renewable energy. The government that promised “a crusade” to reform the energy sector now is on the defensive.

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