Nicaragua Plans to Reduce Dependence on Oil-based Energy to 3 Percent
Few decades ago the share of renewable energy in Nicaragua’s power generation was 70 percent but with growing ties with Venezuela and availability of cheap oil that number declined and now the country gets just 34 percent of its energy from renewable sources. But with the rising oil prices and increasing blackouts the government now seems to be falling back on the locally available and reliable renewable energy sources.
Having close diplomatic relations with Venezuela assured Nicaragua of sufficient oil supply for years but with oil peaking to $147 it became more and more difficult to shoulder the burden of rising energy costs. Although oil-based energy was cheaper than the energy produced from non-conventional sources, the fluctuation in oil prices started hurting the economy of the nation. The government of Nicaragua soon realised that oil-based energy sector is not sustainable in the given circumstances.
Nicaragua, one of the poorest countries in the western hemisphere, is blessed with a wide variety of renewable energy sources - wind, geothermal and hydel energy. The government is now looking to attarct foreign investors to help it develop projects which could eventually reduce the country’s dependence on oil for power generation to a mere 3 percent.
Russia, Iran and Brazil have come forward to invest in renewable energy projects in Nicaragua. A private capital firm, Arctas Capital Group, has invested in a $90 million wind energy project which will start generating 40 megawatts of energy from January. Nicaragua has six active volcanoes and therefore also experiences substantial amount of geothermal activity which it plans to tap through a 250 megawatt project to be build with the help of Russia.
For years the governments of Nicaragua ignored the vast reserves of renewable sources present in their country and increased their dependence on foreign oil as oil-based power plants were cheaper and easy to build but as the oil prices rose to unprecedented levels the already battered economy of Nicaragua seemed to give way. Now the government has set an ambitious but achievable goal of getting rid of costly foreign oil and building a predominantly renewable energy based economy. Other nations need to take the cue and look to utilize the locally available renewable energy sources as it would not only help build a cleaner environment but also build a stronger economy.
Image source: Conor Dupre-Neary at Flickr under Creative Commons License.
I would like to see the sources for the first sentence of this article. Yes, Nicaragua has always had a fair number of geothermal and hydroelectric plants (it is the Land of Lakes and Volcanoes, after all) but it is hard for me to imagine it was 70% renewable.
Daniel Ortega made the unfortunately worded statement that he wanted Nicaragua to become “the Saudi Arabia of renewable energy” at the same moment he was establishing all those ALBA oil/petrochemical exchanges and with Venezuela. Which he pretty much had to do, I think, as the country was close to being paralyzed by the price of oil disrupting transportation of goods and people.
This article doesn’t take into account at all the priorities of shifting governments in Nicaragua (which were radically different under the dictatorship, the revolutionary government, the neoliberal government that followed, and the current… a new word will have to be invented for the neo-Sandinista administration) nor, when blaming the shortsightedness of government, does it take into account the pressures of the international financial sector which can really dictate priorities in a country as impoverished as Nicaragua. The priorities and conditions of the loans given to Nicaragua by the World Bank/BID/IMF/etc. were to privatize at all cost, and for the government to disinvest in infrastructure at all costs, so that it could be privatized. Result: the public electric co. in Nicaragua was given away to a Spanish company for a fraction of its value and they have done a wretched job of delivering power to Nicaraguans. Ortega, under the ALBA, got funding from Venezuela to build new power plants, and he pretty much had to accept that.
Thanks for your invaluable input, Gringa. Firstly i would like to apologize for not providing the link. Here it is: http://www.csmonitor.com/2008/0604/p06s01-woam.html.
You rightly pointed out the fact that Nicaragua being a poor country would have found it difficult to get financial help and i also admit that certain points may have been skipped but i think that various governments did little to stop the country from slipping into the grip of foreign oil. As the president of one of the power companies said, the government chose the cheapest and easiest way to address the energy needs of the country.