World Small Hydropower Development Report 2013

Transcription

1 World Small Hydropower Development Report NICARAGUA

2 Disclaimer Published in 2013 by United Nations Industrial Development Organization (UNIDO) and International Center on Small Hydro Power (ICSHP) UNIDO and ICSHP All rights reserved This report was jointly produced by United Nations Industrial Development Organization (UNIDO) and International Center on Small Hydro Power (ICSHP) to provide information about small hydropower. The document has been produced without formal United Nations editing. The designations employed and the presentations of the material in this document do not imply the expression of any opinion whatsoever on the part of the Secretariat of UNIDO and ICSHP concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries, or its economic system or degree of development. Designations such as developed, industrialized and developing are intended for statistical convenience and do not necessarily express a judgement about the stage reached by a particular country or area in the development process: Mention of firm names or commercial products does not constitute an endorsement by UNIDO or its partners. The opinions, statistical data and estimates contained in the articles are the responsibility of the author(s) and should not necessarily be considered as reflecting the views or bearing the endorsement of UNIDO and its partners. While every care has been taken to ensure that the content is useful and accurate, UNIDO and ICSHP and any contributing third parties shall have no legal liability or responsibility for the content or the accuracy of the information so provided, or for any loss or damage caused arising directly or indirectly in connection with reliance on the use of such information. Copyright: Material in this publication may be freely quoted or reprinted, but acknowledgement is requested, together with a copy of the publication containing the quotation or reprint. Recommended citation: Liu, H., Masera, D. and Esser, L., eds. (2013). World Small Hydropower Development Report United Nations Industrial Development Organization; International Center on Small Hydro Power. Available from

3 2 Americas 2.2 Central America Nicaragua Yan Huang, International Center on Small Hydro Power Key facts Population 5,727,707 1 Area 130,967 km 2 Climate Tropical in lowlands, cooler in highlands 1 Topography Rain pattern Three major zones: Pacific lowlands, central mountainous and volcanic highlands (some volcanoes still active), and Caribbean lowlands 1 Average annual rainfall is 1,462 mm; rainy season is from May to October. 2 Electricity sector overview Nicaragua has an electrification rate of 72 per cent. The Nicaraguan energy sector was restructured in the late 1990s. The new electricity Law from April 1998 separated generation, transmission, and distribution divisions of the state-owned Empresa Nicaragüense de Electricidad (ENEL). This sector reform initiated privatization of the generation and distribution activities. Four electricity generation companies (GEMOSA, GEOSA, HIDROGESA, and GECSA), one transmission company Empresa Nacional de Transmisión Eléctrica S.A., (ENTRESA) and two distribution companies (DISNORTE and DISSUR) were created. However, during , the privatization delayed the promotion of the electric service in rural areas. A plan was established for this purpose in 2004, with the creation of the Comisión Nacional de Energía (CNE). Nearly 70 per cent of Nicaragua s electricity needs are supplied by fossil fuels plants (figure 1). According to the National Energy Institute (INE), installed electricity generation capacity in 2011 was 895 MW; 593 MW thermal (fuel oil and diesel), 98 MW large hydropower, 0.9 MW small hydropower, 63 MW wind power, 36 MW geothermal and 104 MW biomass (sugar cane bagasse). Wind Geothermal Biomass Hydro Thermal 5% 7% 10% 11% 67% 0% 20% 40% 60% 80% Figure 1 Electricity generation in Nicaragua Source: National Energy Institute 3 Note: Data from Thermal includes diesel and fuel oil. Small hydropower sector overview and potential The INE s annual statistics for 2011 only report operation and generation of one small hydro plant in Nicaragua. With an installed capacity of 930 kw and a head of 119 meter, the ATDER-BL El Bote small hydropower plant has a reservoir and operates two Pelton turbines. The plant is connected to the grid. In addition, according to the Ministry of Energy and Mining, four other small hydro projects in operation with a total installed capacity of 1.64 MW and two other projects under construction with a total capacity of 1.78 MW can be found in Nicaragua (as of September 2012). Based on this information, the total installed small hydro capacity in Nicaragua is 2.95 MW and the capacity of small hydro projects under construction is 1.78 MW (figure 2). SHP installed capacity SHP potential 2.95 MW 40 MW Figure 2 Small hydropower capacities in Nicaragua The programme Usos Productivos de la Hidroelectricidad a Pequeña Escala aims to improve living conditions in rural areas through improved income generation based on hydropower. As part of the Global Environment Facility Project Development Fund Block B grant, several preparatory studies have been carried out by NGOs and consultancy companies. Among them is a reconnaissance study which identified 30 potential hydropower projects ranging from 150 kw to 1.5 MW and totalling some 11 MW. The financing required to implement the entire programme is estimated to amount to about US$30 million. 4 5 Within the UNDP project NIC/02/G31, the Development of Small-scale Hydropower for Productive Use in Off-grid Areas, a small hydropower potential of 40 MW has been identified for Nicaragua, for stand-alone projects in rural areas. 6 The value chain of small hydropower in Nicaragua is only developed to cover services in maintenance and operations; and in engineering. 7 Renewable energy policy Nicaragua provides investors of clean energy with fairly attractive tariffs in retail and power markets. 7 In 2005 a regulatory framework relating to the energy market was put into place, aiming to reduce oil and diesel dependency and adding power capacity by 700 MW via power purchase agreements scheduled over the coming 10 years. 7 1

4 The Nicaraguan Government provides its investors with tax based incentives such as income tax and import duty tariffs to support the implementation of clean energy. Furthermore local micro finance institutions portray a robust system with 10 organizations providing green finance at an average cost of 1.5 per cent to 28 per cent. 7 Legislation on small hydropower The Nicaraguan Government has declared hydropower development to be an important part of its energy policy. A favourable legal framework and an attractive incentive structure have been established for hydropower plants with capacities below 5 MW. The necessary environmental permits are obtained from the Ministerio del Ambiente y los Recursos Naturales, generation of licences from Instituto Nicaragüense de Energía (INE), and water concessions from the Ministerio de Fomento, Industria y Comercio (MIFIC). 8 Law 476 for the Promotion of Hydroelectric Sub sector stipulates that hydropower schemes below 1 MW do not need a water concession, instead producer will get a permit for 15 years. 8 For schemes with capacities between 1 MW and 5 MW, a simplified procedure applies to obtain a water concession from MIFIC. Law 217 General Law of the Protection of Environment and the Natural Resources stipulates that projects with capacities below 5 MW do not need an environmental impact assessement. 8 Barriers to small hydropower development Difficulty in accessing finance because of the high initial cost of projects, commercial finance is needed for the long term. But in general, the finance assistance is short-term and hence shows high interest rates; Requirements and costs for permits are the same for large and small projects. The cost per MW for small projects is very high; in addition, the concession process is very slow, often lasting several years; Power purchase agreements are too short to motivate small hydropower project development, therefore it is difficult to take long-term investment decisions.; The approved fiscal incentives for hydropower projects do not yet create a level playing field for hydropower development in general compared to thermal projects, since the latter continue to be highly subsidized. References 1. Central Intelligence Agency (2012). The World Factbook. Available from 2. Instituto Nigaragüense de Estudios Territoriales (n.d.). Homepage. Managua. Available from Accessed December Instituto Nicaragüense de Energía. Dirección General de Electricidad (2011). Estadísticas anuales de generación eléctrica bruta. Available from 4. Ministerio de Energía y Minas (2009). I Foro Pequeñas Centrales Hidroeléctricas en Nicaragua, 19 October. Available from Global Network on Energy for Sustainable Development (n.d.). Nicaragua: Renewable Energy for Rural Zones Programme. Available from m_content&view=article&id=116:nicaragua-off-grid-ru ral-electrification-project-perza&catid=3:projects&ite mid= United Nations Development Programme (2003). Desarrollo de la hidroelectricidad para usos productivos en zonas fuera de red. Project NoNIC/02/G Bloomberg New Energy Finance and Multilateral Investment Fund (2012). Climatescope 2012: Assessing the Climate for Climate Investing in Latin America and the Caribbean. New York. Available from www5.iadb.org/mif/climatescope/2012/img/content/ pdfs/eng/climatescope2012-report.pdf. 8. Comision Nacional de Energía (2006). Nicaragua: Policy Strategy for the Promotion of Renewable Energy: Situation and Perspective of Hydroelectric Generation. Available from cy%20strategy%20for%20the%20promotion%20of%2 0RE_Yoo.pdf. 2

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