By José María Blanco
Central America, a region that imports more than 70 percent of its total fuel demand for commercial energy – mostly in the transportation sector – urgently needs to rethink how energy is consumed.
While changing consumption patterns in the transportation sector is complex because vehicles rely on technology based primarily on the internal combustion engine, in the electricity sector there are many opportunities to rationalize end-use consumption. What happens after the meter depends a great deal on the consumer, who can play a key role in simply reducing electricity use.
Statistics from the Economic Commission for Latin America and the Caribbean (ECLAC) show that the need for investment in new electricity generating plants in the region will total some $15 billion in the next 10 years, an annual growth of 5 percent.
This is why an affordable alternative is the efficient and rational use of electricity by consumers, who can control consumption by installing more energy efficient technology and implementing good practices. In other words, the reality about energy consumption in Central America in the next decade requires an urgent change of paradigm, not just because reducing reliance on carbon-based fuels is mandated by agreements to mitigate global warming, but also because it’s good business that can help slow the pace of construction of new energy generation plants.
The annual growth in energy consumption in Central America requires a public policy response that promotes efficient energy use as a political priority. The financial opportunities that could be created still haven’t fully been explored. In such a new field, few investors have recognized potential business opportunities like creating companies that provide energy services, lease electrical products or offer shared savings plans, among others.
Since 2005, public policy has tackled energy efficiency by taking fundamental steps such as creating technical standards that establish minimal efficiency parameters for electronic products sold to end-users. Compact fluorescent lights (CFLs) are one example, as they utilize 70 percent of the electricity consumed in light emission, while conventional incandescent bulbs effectively utilize only 30 percent. The remaining energy is lost to heat.
The Central America Energy Foundation (BUN-CA) estimates that the potential savings in the electricity industry, via low-cost initiatives, could reach 5 percent in terms of past consumption. With investment, savings could reach 30 percent.
For example, if all the incandescent light bulbs in Costa Rica were replaced by CFLs with integrated ballasts that comply with minimal technical norms for energy efficiency, in 10 years Costa Rica would have saved the energy equivalent of building a 195 MW energy generation plant. In El Salvador, the energy saved would total 107 MW in the same period.
The use of electricity beyond the meter creates opportunities in which the electricity industry wins. Now is the moment to rethink how we use energy, because negative watts can become a profitable replacement for new megawatt production plants.
José María Blanco is director of the Central America Energy Foundation (BUN-CA), based in San José.
