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PANAMA - Energy & Mining

Carlos Manuel Mosquera Castillo

General Manager, ETESA

Bio

Carlos Manuel Mosquera Castillo is an electromechanical engineer from the University of Panama, with a master’s degree in negotiation, mediation, and arbitration and a diploma in electricity market from the Technological University of Panama. He is also a senior management postgraduate in international public administration, from the National Administration Institute of Portugal. He has an extensive background in the energy sector. Until 2019, he was an advisor to the National Electricity Market where he contributed his knowledge in different areas such as technical advisory services, verification, review, management of the interconnection to the national integrated system, commercial metering system, and corresponding procedures.

Having successfully increased renewable energy generation by 50 times in the last four years, ETESA will continue to focus on its projects that will add a further 1,700MW in the […]
Having successfully increased renewable energy generation by 50 times in the last four years, ETESA will continue to focus on its projects that will add a further 1,700MW in the coming years.
What benefits does the diversification of the energy matrix bring in terms of climate change resilience?

The diversification of the matrix is vital for Panama and the world because we constantly face two major challenges: climate change and the phenomena El Niño and La Niña. Those two factors combined with high electricity demand force us to work on the diversification of the matrix, which represents more stability and less dependence on just one type of matrix. When a matrix depends on one specific technology, it stops being reliable. We need to add more technologies in order not to depend on only one. We have worked hard to generate energy through liquid gas. In addition to a 350-MW AES plant in Colón, ETESA is working on establishing a new liquid gas plant in 2024, one of the largest of its kind in Latin America measuring 670MW. This will have a major impact on diversification. Apart from natural gas, we need to work on renewable energy plants, specifically solar and wind power. We plan to interconnect more wind and solar plants, even as we have increased the amount of energy coming from renewable sources by 50 times in the last four years. ETESA is optimistic about the future. To date, we have more than 1,700MW in temporary licenses, which add up to around 70 new plants currently under process. In terms of definite licenses, we have 250MW, which is enough for six to seven new plants. Today, in total we have over 2,000MW. Our short-term projection estimates the renewable energy sector to reach 1,000MW, which will make our matrix less dependent on just hydrocarbons alone. Furthermore, this will also help the country face climate change-related problems. The diversification of the energy matrix is part of the transition agenda of the national government and the energy sector. This plan implies the development of renewable solar and hydro plants. In order to add 2,000MW to the system, the country needs new projects. In 2023, ETESA invested over USD200 million in new projects as part of the government’s expansion plan. At the same time, these investment projects will shape the energy transition agenda, specifically, the diversification of the matrix.

What key infrastructure projects is Panama is undertaking to improve its energy grid?

We need to close 2023 with a total investment of almost USD350 million. We hope to invest USD150 million more, without considering the fourth line. Unless we work on these projects, we will not be able to link up the plants. New lines and new substations are essential for the interconnection of the new 1,000MW because the system does not have the right capacity yet. The third line, Sabanitas-Panama, is 70% completed and will eventually connect the Gatún plant. We will develop a new from the center of the country to the south. ETESA will also work on a line that has in need for a long time that interconnects all the hydraulic plants in Chiriquí to improve the quality of transition from Chiriquí to the border. The fourth transition line is vital because there are already three lines on the Pacific side, and in five years they will be saturated so we need to make room there to interconnect the 70 plants. The fourth line will enable us to transmit energy. Apart from that, we plan to expand four existing substations Módulo, Progreso, Caseres, and Boquerón. There are various projects that need to come online by the end of 2024 or early 2025. If we do not take urgent action now, we will have an energy crisis in four years, and prices will increase significantly.

How is the transmission line between Colombia and Panama going?

The project is important for us. Technically speaking, the feasibility and station studies have been progressing well. This will be the first line with direct power in Central America. The submarine study, which will have a 150-km underwater part between Colombia and Panama, is also making progress; however, the environmental and social aspect is progressing slower because of the indigenous people in the area. This project goes through two regions and a special territory, so this is an issue that we have to deal with. ETESA previously met with the governor and various authorities to develop a strategy and have set up an interdisciplinary commission to make this work for everyone. Even though this aspect is moving slower, it will still progress forward. The environmental impact study for Panama has been completed, and now the regional congress needs to approve it. We still need to work on regulations and rates in addition to the social and environmental aspects and hope to solve this by the end of 2023. We planned to offer licenses for this project in 2024 and are working hard to meet this target. We are well aware interconnection is helpful and will provide more stability to our network and better rates. These projects will be a win-win situation for all. Plants will provide power to the country, and if there is extra, it can be sold, though never at a higher price than what it costs in that country. We are currently not selling to Central America because of weather conditions.

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