Panama is important to world energy markets because the Panama Canal is a major transit center for oil shipments and a potential choke point. Panama has major petroleum free zones with large capacity to store petroleum products as well as a strategic location for small refineries to serve regional export markets. Panama is key to plans to connect the electricity and natural gas grids of North and South America.
New Opportunities
The energy sector had a growth of 6.3%. Panama has negligible hydrocarbon energy reserves and imports over 70% of its energy. Virtually all oil is imported, and the country neither produces nor consumes natural gas. Although for the next few years, three important areas will be: oil refining, the use of natural gas to supply the markets of Panama, Colombia and Venezuela, in addition to the exchange of energy with the Republic of Colombia, through a multi-million dollar project interconnection of two systems, which will cost approximately 215,000,000, and expected to be ready by the end of 2012. Considerations are centred in minimizing the impact on the environment, through surveys, actions and changes intended to preserve the country’s rich biodiversity.
Prestigious institutions from around the globe are interested in investing in the isthmus and entering to participate in energy production. The European Investment Bank (EIB) will finance works related to alternative forms of energy forms, in addition to projects which are beneficial to the environment.
In the first half of the twenty-first century, there were multiple transactions made in the energy sector. El Paso Corporation, which along with Hydro Quebec Possessed 49% of the shares of Fortuna, sold its participation in the plant located in Panama to Globeleq Ltd. In this transaction several other plants in Central America and the Dominican Republic were included. Globeleq has put most this plants and energy assets for sale.
Electricity
Energy generation accounts for most of Panama's domestic energy production, with hydroelectric generation accounting for 80% of the country's total energy production. The other 20% corresponds to thermal generation and the Panama Canal Authority. Investment projections for the next 5 years in Panama's energy sector are estimated in more than U.S. $ 1 billion. Excessive rainfall has increased production and will have an effect on fares reduction, especially the first half of 2009.
By 2010, consumption of electricity and derivatives oil grew steadily at a rate of 8.62% and 11.5% respectively, showing a positive trend demand for energy. Above for the years 2007 and 2008 it was feared by possible energy crisis in our country, because the Panama's electrical system was about to reach its limit to meet domestic demand, due to strong construction development in the country, low levels of water in hydroelectric dams and high prices fossil fuel for heat production among others. Without But the work of political awareness and implemented to promote the rational and efficient energy, diversify our energy matrix, to sources renewable and cleaner, progress in the work of interconnections and regional integration and development energy sector, have paid off.
The relationship between competitiveness, availability has been increased in recent years with the construction and approval of new hydroelectric power projects (24), thermal and wind energy will contribute to increased production (1.000 additional megawatts) and the reduction their cost of making more efficient distribution and thus benefiting the general population (families,
companies and state).
In September 2008, peak demand reached 1064 megawatts (MW). Available capacity in the Panamanian energy market is of 1,430 MW. Over the next four years during the period 2009-2012, installed energy capacity in the country, should grow to over 1,000 MW by the inauguration of new hydroelectric plants. 90% of projects under construction are located in the provinces of Chiriquà and Bocas del Toro.
Still in Panama, nearly a hundred projects are been planned in the area of energy generation. This is an important sector of the national economy that continues to grow both in technology and production capacity.
The country's energy demand is growing annually at a rate of 5%. It is also known that in the next 10 years an approximate of 500 MW more will be required. These previsions justify the high cost of investment and the haste with which these type of projects are been developed.
For the Interconnection Panama Colombia: a binational company was established whose purpose is feasible, design, construct and operate the electricity interconnection line between Colombia and Panama, considering principles of social responsibility and environmental protection. By 2014 it is expected to have the Electric Interconnection Colombia - Panama (ICP), which consists of construction of approximately 614 kilometers between Cerromatoso substations in Colombia, and Panama II substation.
Panama has become increasingly concerned about its environment. With the 1998 electricity restructuring, the government also restructured its environmental regulatory framework. National Environmental Authority (ANAM) became the government agency responsible for the implementation and administration of environmental law. ANAM holds significant enforcement authority, in contrast to the regulatory body that preceded it.
Has been identified the need to diversify the energy matrix for which modifications are made to the existing legal framework for the development, construction, exploitation of alternative sources of energy such as wind, solar, biodiesel and other coupled with the impact of interconnections.
Thereby promoting the diversification of the current matrix energy which is characterized by a high concentration non-renewable resources such as derivatives oil, while the share of energy clean, also called green energy, remains low. Currently the total installed capacity of the Republic of Panama of 1986.60 MW, the which 88.05% are plants that provide the electric utility plants and 11.25% self generators connected to the Interconnected System Nationally, the remaining 0.70% belongs to systems
isolated. The percentage composition corresponds 47.05% of 52.95% hydro plant and different thermal technologies.
This combined with increased international prices oil, the increasing effects on the environment and international commitments made in the matter, have led the state to implement policies aimed at diversifying the energy matrix using renewable energy sources. Under the Authority National Public Services (ASEP), the electricity sector Panama projected investment of U.S.$4,377.3 million between 2011 and 2016, with the line of generators hydropower which reflects higher rate with U.S.$2,655,500. Wind generation is emerging with an investment of U.S.$910 million, while the thermoelectric plants, 27 million dollars.
In 2010 entered the Interconnected System National 133.5 MW of installed capacity, from new plants, both hydroelectric and thermal:
Bontex, SA GDF Suez Energy Central America (25 MW)
Paso Ancho Hydro Power Corporation (5 MW)
Hydro Boqueron SA (3.5 MW)
Cerro Azul Charco Azul and owned Enterprise
Power Generation, Inc., (60 MW and 40 MW).
With the diversification of the national energy matrix can positively impact the economic environment and social general population, thus improving prospects for social development and self-sufficiency energy.
Petroleum
Petroleum is one of the largest commodities (by tonnage) shipped through the Canal and accounted for 16%-17% of total canal shipments during fiscal years 1996-1998. Some coal is shipped through the canal as well, accounting for 5%-6% of total Canal traffic. Over 10 million short tons passed through the canal in fiscal year 1998 (down from over 12 million short tons in fiscal years 1996-1997), with almost 80% going from the Pacific to the Caribbean. The sale of marine fuel for the period January to December 2010, it recorded an increase of 5.1% of metric tons, compared to 2009, proceeds from the sale of 2,662,529 metric tons of fuel oil, representing an increase 4.3%. As for Marine Diesel Oil, also had increased sales in the order of 23.7%, which is 135.435 MT. We note that both the Pacific coast in the Atlantic Coast as sales growth reflects fuel by 2010 with 4.3% and 7.1% respectively.
The Refinery Bahia Las Minas, fuel terminal located in Colon, Panama, brings an increase of 99%. The $ 10 million increase by 30% the capacity to demand for diesel and gasoline. "Among the renovations are gradually increasing the storage capacity of petroleum products, automated storage and modernization of the office. The terminal, in the last 7 years, has supplied about 70% of the domestic market through the fuel distribution companies in the country "
Three bunkering companies are operating at the Pacific: Pimpsa, Decal and Apsa. On the other hand, Apsa and Refineria Panama operate at the Atlantic side of the Isthmus. In 2008 Colon Oil and Services, S.A. (Coassa), which has invested US$25 million, and Petroport, began operations.
The multinational Chevron in Panama will improve the standards of its services at the former refinery in Bahia Las Minas and franchised service stations. The company has already invested $ 20 million over the past two years, and expects to invest $ 30 million over the next three.
The oil operations in Panama, according to studies by 70% complete at this time, helps to ensure the existence of oil fields in three regional offices across the country. Specifically, in Darien, Bocas del Toro and the sea area near the peninsula of Azuero. Now, the process must continue because we put this information in terms that are attractive to those engaged in oil exploration, to conduct in-depth exploration, and also are formed in exploiting this resource.
Gas for cars
The company “Combustibles Ecológicos de Panamá S.A.” is one of the companies that commercializes liquified petroleum gas (LPG), under the commercial trademark of Autogas. LPG is an alternative fuel that is already used in Italy, India, Turkey, Poland, Holland, United States, Thailand, Peru and Spain, among other countries.
Etanol and Biodiesel
In Panama, the bio-fuels issue is starting to have an increasing presence on this country’s. For example, the production ethanol production based on sugarcane, which is considered an investment alternative for major domestic sugarcane growers. Even for exportation, due to the fact that countries like the United States allow mixing gasoline with a 15% of ethanol. Another alternative for investment, showing very promising results in Central America, is the production of palm oil to obtain bio-diesel. In Panama, there are numerous extensions of soil available to grow palm oil plantations making it possible to develop future biodiesel projects.
Texas BioDiesel Corporation, dedicated to the production of biodiesel with the most modern technology, announced its incursion in Panama with the hopes of installing a refinery in Puerto Armuelles. The plant, valued at US$40 million, will have the capacity to process 100 million gallons of biodiesel annually. The first phase of the plan that Texas BioDiesel plans to finance the Cooperative Company Producer of Palm Oil (“Cooperativa Empresa Productora de Palma de Aceite”) of Chiriqui, the largest in the region with 68 partners and 400 employees, one oil extraction plant for US$3.5 million.
The main alternative to reduce dependence on petroleum products has identified the production of fuels of organic origin, such as ethanol and biodiesel, as well as the use of gas, which can also be used for power generation. These initiatives took a legal nature, then that last April, the Assembly of Deputies approved the Law 42, which establishes the general guidelines of the national policy to promote, encourage and develop the production and use of biofuels and the generation and cogeneration electricity from biomass in the country. While the price of gasoline to consumers is not reduced significantly for sugar using ethanol as an oxygenate in the fuel could inject nearly $ 100 million to the economies within the country and generate 75,000 new jobs. In the regulation of this bill will authorize the use of anhydrous ethanol mixed with gasoline, whose use is mandatory in our country since April 2012. The percentage of anhydrous ethanol to be blended with gasoline is 2% initially, and this percentage will increase in line with the increase in installed capacity of anhydrous ethanol production, up to a maximum of 10%.
Energy Overview
Oil production (2010): 3,500 bpd
Oil consumption (2010): 65,000 bpd
Net oil imports (20010): 60,000 bpd
Crude refining capacity (1/1/02): 63,000 bpd
Coal consumption (2009): 85,000 short tons (all imported)
Electric generation capacity (2010): 1.98 mm kW (53 % hydroelectric)
Electricity consumption (2010): 6.2 bn kWh
Environmental Overview
Status in climate change negotiations:
Non-Annex I country under the United Nations Framework Convention on Climate Change (ratified on May 23rd, 1995). Ratified the Kyoto Protocol on March 5th, 1999.
Major environmental issues
Water pollution from agricultural runoff threatens fishery resources; deforestation of tropical rain forest; land degradation. Major international environmental agreements
Biodiversity, Climate Change, Climate Change-Kyoto Protocol, Desertification, Endangered Species, Hazardous Wastes, Law of the Sea, Marine Dumping, Nuclear Test Ban, Ozone Layer Protection, Ship Pollution, Tropical Timber 83, Tropical Timber 94, Wetlands, Whaling.
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(*The total energy consumption statistic includes petroleum, dry natural gas, coal, net hydro, nuclear, geothermal, solar and wind electric power. Sectoral shares of energy consumption and carbon emissions are based on IEA data.)
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