Nicaragua has the 2nd lowest electricity generation in Central America, ahead only of Belize. CEPAL 2007 Nicaragua also possesses the lowest percentage of population with access to electricity. The unbundling and privatization process of the 1990s did not achieve the expected objectives, resulting in very little generation capacity added to the system. This, together with its high dependence on oil for electricity generation (the highest in the region), led to an energy crisis in 2006 from which the country struggled to recover from.
The recent figures are available at: https://web.archive.org/web/20130726102527/http://ine.gob.ni/DGE/serieHistorica.html
The Nicaraguan electricity system comprises the National Interconnected System (SIN), which covers more than 90% of the territory where the population of the country lives (the entire Pacific, Central and North zone of the country). The remaining regions are covered by small isolated generation systems.Monte Rosa Bagasse Cogeneration Project PDD The Central American Electrical Interconnection System (SIEPAC) project will integrate the electricity network of the country with the rest of the Central American countries, which is expected to improve reliability of supply and reduce costs.
Electricity supply and demand
Installed capacity
Nicaragua continues significantly dependent on oil for electricity generation, despite recent developments toward renewable energy sources following the COVID-19 pandemic, with approximately 36% of energy production remaining reliant on oil. As of 2022, Nicaragua had an installed generating capacity of 1849 MW, with the following breakdown by sources of electricity:
Source Generation (%) Oil 35.5 Hydroelectric 14.9 Biofuels 20.4 Wind 12.8 Solar 0.6 Geothermal 15.7
Gross electricity generation was 3,140 GWh, of which 69% came from traditional thermal sources, 10% from bagasse thermal plants, 10% from hydroelectricity, and 10% from geothermal sources. The remaining 1% corresponds to the electricity generated in the "isolated" systems. The detailed breakdown of generation among the different sources is as follows:INE Statistics
Source Generation (GWh) Generation (%) Hydroelectric (public) 307 9.8% Thermal (public) – fuel oil 199 6.3% Thermal (private) – fuel oil 1,883 60% Thermal (private) – bagasse 323 10.3% Gas turbines (public) – diesel 71 2.3% Gas turbines (private) – diesel 0.82 0.02% Geothermal 311 9.9% Isolated systems 42 1.3% Source: INE Statistics
Although nominal installed capacity has increased by 113 MW since 2001, effective capacity has only increased by 53 MW, remaining as low as 589 MW in 2006. The large difference between nominal and effective capacity is due to the existence of old thermal plants that do not operate properly and that should be either refurbished or replaced.
Demand
In 2006, total electricity sold in Nicaragua increased 5.5%, up to 2,052 GWh, which corresponds to 366kWh annual per capita consumption. The consumption share for the different economic sectors was as follows:CEPAL 2007
Residential: 34% Commercial: 31% Industrial: 20% Other: 15%
Demand versus supply
Maximum demand has increased in Nicaragua at an annual rate of about 4% since 2001,CEPAL 2007 which has led to a low reserve margin (6% in 2006). Furthermore, demand is expected to increase by 6% per year for the next 10 years, which increases the need for new generation capacity.
Access to electricity
In 2001, only 47% of the population in Nicaragua had access to electricity. The electrification programs developed by the former National Electricity Commission (CNE) with resources from the National Fund for the Development of the Electricity Industry (FODIEN), the Inter-American Development Bank, the World Bank and the Swiss Fund for Rural Electrification (FCOSER), have led to an increase in electricity access to 55% (68% according to the Census estimates, which also consider illegal connections) by 2006.CEPAL 2007 However, this coverage is still among the lowest in the region and well below the 94.6 average for Latin America and the Caribbean (LAC)Benchmarking data of the electricity distribution sector in Latin America and Caribbean Region 1995-2005 Coverage in the rural areas is below 40%, while in urban areas it reaches 92%.Census 2005
In 2004, the National Energy Commission (CNE) developed the National Plan for Rural Electrification (PLANER), which established goals and investment figures for the period 2004–2013.HLSP Consulting Its objective is to bring power to 90% of the country's rural areas by the end of 2012. The Rural Electrification Policy was approved in September 2006 as the main guide for implementation of the PLANER.Decree No. 61-2005
Service quality
Interruption frequency and duration
In 2003, the average number of interruptions per subscriber was 4 (weighted average for LAC in 2005 was 13), while duration of interruptions per subscriber was 25 hours (weighted average for LAC in 2005 was 14). However, the situation worsened during the energy crisis in 2006, when large sections of the country suffered continuous and lengthy blackouts (See Recent developments below).
Distribution losses
In 2006, distribution losses in Nicaragua were 28.8%, the highest in Central America together with Honduras, whose average was 16.2%.CEPAL 2007 This is one of the most acute problems faced by the sector in Nicaragua, as it leads to very large economic losses. This problem is partially caused by the widespread existence of illegal connections, altered metering systems and low bill collection capacity in certain areas.
Responsibilities in the electricity sector
Policy and regulation
The regulatory entities for the electricity sector in Nicaragua are:
The Ministry of Energy and Mines (MEM), created in January 2007, replaced the National Energy Commission (CNE). The MEM is in charge of producing the development strategies for the national electricity sector. In 2003, the CNE elaborated the "Indicative plan for the generation in the electricity sector in Nicaragua, 2003-2014", which aims to provide useful insight for private investors to orient their decisions on technologies to implement in the country.San Jacinto Tizate geothermal PDD The Nicaraguan Energy Institute (INE) applies the policies defined by the government (i.e. by MEM). It is in charge of regulation and taxation. The Regional Commission for Electric Interconnection (CRIE) is the regulatory body for the Regional Electricity Market (MER) created by the 1996 Framework Treaty for the Electricity Market in Central America.
The National Dispatch Center (CNDC) is the operational body in charge of administering the Wholesale Electricity Market (MEN)and the National Interconnected System (SIN).
Generation
In 2006, there were 10 generation companies in the National Interconnected System, eight of which were in private hands. The number and type of plants operated by each company was as follows:CEPAL 2007
Type Company name No. of plants Installed capacity (MW) Public 4 226.8 Hydroelectric Hidrogesa 2 104.4 Thermal GECSA 2 122.4 Private 9 524.4 Geothermal Gemosa 1 77.5 SJP 1 10 Thermal CENSA 1 63.9 EEC 1 47 GEOSA 2 120 Monte Rosa 1 67.5 NSEL 1 59.3 Tipitapa 1 52.2 TOTAL 13 751.2 Source: CEPAL 2007
Transmission
In Nicaragua, 100% of the transmission is handled by ENATREL, which is also in charge of the system's dispatch.CEPAL 2007
Distribution
In Nicaragua, the company Dissur-Disnorte, owned by the Spanish Unión Fenosa, controls 95% of the distribution. Other companies with minor contributions are Bluefields, Wiwilí and ATDER-BL.CEPAL 2007
Renewable energy resources
The "Indicative plan for the generation in the electricity sector in Nicaragua, 2003-2014" does not set any target or legal obligation for the development of renewable resources in the country. However, in April 2005, the government approved Law No. 532., the "Law on Promotion of Electricity Generation with Renewable Resources". This law declared the development and exploitation of renewable resources to be in the national interest and established tax incentives for renewables.
Renewable energy advances
NPR reported in 2015 that Nicaragua was increasing its renewable energy capacity. The report said that renewables generated nearly half the country's electricity, and that this could rise to 80% in the near future.
Hydroelectricity Currently, hydroelectric plants account only for 10% of the electricity produced in Nicaragua. The public company Hidrogesa owns and operates the two existing plants (Centroamérica and Santa Bárbara).
As a response to the recent (and still unresolved) energy crisis linked to Nicaragua's overdependence on oil products for the generation of electricity, there are plans for the construction of new hydroelectric plants. In 2006 the Central American Bank for Economic Integration (BCIE) and the Government reached an agreement by which the BCIE will provide US$120 million in the next five years (2007–2012) in order to finance several hydroelectric projects: Modernization of the Centroamérica and Santa Bárbara plants, which generate 50 MW each. US$37 million for the design, construction and initial operation of the 17 MW Larreynaga hydroelectric plant, to be located 161 km North of Managua, in the Department of Jinotega. US$42–45 million for the design, construction and initial operation of the 21 MW Sirena-Los Calpules hydroelectric plant.
In March 2008 the government of Iran approved a US$230 million credit for the construction of a 70 MW hydropower plant by the name of Bodoke on the Tuma River in the northern department of Jinotega. According to press reports the project will be carried out by a state-owned Iranian company with financing from the Iranian Export Bank under an agreement with the Nicaraguan Ministry of Energy and Mines.La Prensa, Panama, March 14, 2008, p. 50A, quoting an Associated Press news release; see also International Herald Tribune. Micro hydropower also continues to be a popular sustainable energy resource, particularly in isolated rural regions of Nicaragua which are currently not electrified .
The Tumarín Dam, a gravity dam, is currently under construction on the Río Grande de Matagalpa just upstream of the town of Tumarín in the South Caribbean Coast Autonomous Region, Nicaragua. It is located about east of San Pedro del Norte, where the Río Grande de Matagalpa meets the Tuma River. Preliminary construction (roads, bridges and foundation) began in 2011 and main works are expected to begin in February 2015. Completion is scheduled for 2019. Brazil's Eletrobras will fund the US$1.1 billion under a 20 to 30 year build–operate–transfer (BOT) agreement. The project is being developed by Centrales Hidroelectricas de Nicaragua (CHN). The power station located at the base of the dam will house three 84.33 MW Kaplan turbine-generators for an installed capacity of 253 MW.
Wind
Nicaragua's wind potential is still largely unexploited. However, steps are being taken, partially thanks to the new framework created by Law No.532.
In February 2009, the Wind Consortium Amayo successfully connected its new 40 MW Wind Park to the SIN making it the country"s first operational wind park. During late 2009 - early 2010 the Amayo wind farm was expanded with additional 23 MW, total capacity now amounting 60 MW. The windfarm comprises 30 turbines type S88 2.1 MW, from Suzlon Wind Energy, India.
Amayo is currently the largest operating wind facility in Central America.
Geothermal
Nicaragua is a country endowed with large geothermal potential thanks to the presence of volcanoes of the Marribios range along the Pacific Coast. However, the country is still very far from exploiting this natural resource extensively and efficiently. Law No. 443 regulates the exploration and exploitation of geothermal resources.