The pursuit of national energy independence
From the print edition
By Jim Ryan
Some people may say I am obsessed with the idea of energy independence for our small but incredibly energy-resource-rich nation. It’s true – I am! But is it practical for Costa Rica to actually pursue this objective?
Few energy experts or planners would disagree that energy independence for Costa Rica is an important, even urgent goal.
But the question remains, is achieving this realistic, and if so, how? And, do our politicians and public institutions have the vision and leadership qualities to take us there?
To address energy independence, we must separately discuss power generation (electricity supply) and transportation (fuel for cars, buses and trucks). First, let’s quickly address the huge issue of transport fuel, which is our major source of dependence upon imported and polluting hydrocarbons, and the main reason we will not reach carbon neutrality by 2021.
Transport: While we can make incremental improvements in fuel economy and reduce emissions, I don’t think Costa Rica can greatly impact its thirst for imported oil for the transportation sector until powerful and affordable new batteries are introduced. But when this occurs, countries like Costa Rica may be among the first to really benefit. That game-changing scenario will be the topic of a future article in this space.
Power Generation: Now, to my favorite topic: distributed, renewable power generation. Private distributed generation, which is the principal focus of this article, has only been recently introduced to Costa Rica as a result of the enlightened energy policies of former Environment Minister Teófilo de la Torre and his boss, Laura Chinchilla. In fact, their policy initiatives coincided with a small but bold move by the Costa Rican Electricity Institute, or ICE, when it introduced its pilot program for net-metering.
Many people in Costa Rica are not aware that in areas where ICE distributes electricity, as well as in some other areas, it’s now possible for consumers to install their own power generation in the form of solar panels, wind generation, hydro-generation, biomass generation and even cogeneration. And most importantly they can connect this self-generated electricity to the utility distributor’s grid in order to allow for the continual and bi-directional exchange of power.
With a simple and straightforward oversight and approval process managed by ICE to ensure responsible systems design and safety (for both the consumer and grid), consumers of any size can now invest in their own power generation.
This is a dramatic shift from the past, when power generation was the exclusive right of government institutions or regulated utility companies. Now, theoretically, most of the population has the ability to invest in their own, independent power generation from renewable resources, at least up to the level that they consume power.
Solar power is an ideal yet untapped supplement to our nation’s “energy mix.” Besides the fact there has been a precipitous decline in prices for solar panels, driven by increased Chinese production, it is clean, predictable, quick to install, easily scalable, can be installed virtually anywhere without causing grid congestion or balancing problems, and it doesn’t cost the taxpayers or utilities anything since the consumer makes the investment.
However, there are still economic and institutional obstacles that limit this ability to self-generate power. For instance, while it is practical to install solar panels on a home, it is more difficult to scale up these systems for commercial- and industrial-sized projects. Scale is a critical issue, as with scale comes lower project costs and greater efficiency.
For private distributed-generation projects both small and large to make greater contributions toward our national energy independence, there needs to be continued evolution of the bold policies that first introduced grid-connection rights and net metering. Following are some policy measures that can help us achieve our goal:
•The Public Services Regulatory Authority (ARESEP) must exhibit leadership to enable all consumers anywhere in the country to benefit from grid-connection rights and net-metering.
•We need the central government to establish a revolving credit fund whereby small and large consumers can borrow money to finance solar systems without making large up-front payments and without paying high interest rates to banks or private financiers.
•ARESEP should reform metering policies to allow aggregated metering, whereby a customer with multiple meters can be treated as if they have one “virtual meter.”
In this way, the energy production from an efficient central solar array in a residential community, condominium or industrial park can be applied toward the consumption at various meters.
•We need ARESEP to promote different tariff rates for peak, off-peak and nighttime consumption to all consumers, not just large commercial and industrial clients.
•ARESEP should establish wheeling (transportation) tariffs on the electrical grid so that large consumers or groups of consumers can invest in their own efficient power generation and then “wheel” that power across the network to their facilities, wherever they are located. Such policies promote investment in distributed, clean renewable energy by private investors.
•ARESEP should establish a coherent pricing tariff for ICE or distributors to buy power from private solar-farm developers. This could unlock an untapped source of clean, reliable, economical power for Costa Rica.
While not easy to accomplish, these advances are achievable, and importantly, they don’t need to cost the tax payers money. Also, unlike a huge hydro project, they can be accomplished in a short time frame, are scalable, and can significantly reduce our dependence upon imported oil. However, they depend on the political will and leadership of our energy-sector authorities.
Sooner or later, world oil prices and climate change will force energy policy changes upon Costa Rica, and I hope that at least some of these reforms come sooner. Did I say it would be easy?
Jim Ryan is founder of ASI Power & Telemetry, S.A. based in Liberia, Costa Rica. ASI Power specializes in sustainable energy and advanced telemetry systems for residential, commercial and industrial clients. More info at: www.ASIPower.com.