Energy profile: Panama
Fuel mix (fossil fuels vs renewables)
In 2024, Panama generated 32.02% of its electricity from fossil fuels and 67.98% from non-fossil sources. The breakdown was as follows:[1]
- 53.09% hydro
- 20.85% gas
- 7.45% other fossil fuels
- 7.37% solar
- 7.15% wind
- 3.72% coal
- 0.37% bioenergy
As of 2024, fossil fuels accounted for 43.11% of Panama's installed electrical capacity, with non-fossil energy sources making up the remaining 56.89%, as detailed below:[2]
- 43.11% fossil fuels
- 36.77% hydro
- 11.95% solar
- 6.69% wind
- 1.48% bioenergy
Panama relies on imported oil for the majority of its total energy supply, especially in the transportation and industrial sectors.[3][4][5][6]
The PEN (Plan Energético Nacional) 2015-2050 aims to drastically increase the use of renewable energy in Panama to 70% of the country's energy mix.[7][8]
Greenhouse gas emissions targets
Panama aims to be carbon neutral by 2050, partially by emphasizing forest restoration to absorb CO2 emissions.[9] The Sustainable Panama: Reduce Your Footprint (Reduce tu Huella) program encompasses all government ministries, the Panama Canal, logistics, construction, forestry, agriculture, tourism, academia, and the financial sector and looks to reduce GHG emissions from all sides, with support from the Ministry of the Environment.[10][11] In 2021, the Panama Canal officially began decarbonizing its operations in order to be carbon neutral by 2030.[12] Government plans also call for increased adoption of electric vehicles to reduce fossil fuel emissions.[6][13]
Government energy agencies & other key players
National energy ministry
The SNE (Secretaría Nacional de Energía), attached to the Office of the President, is responsible for energy planning and policy, including the legal and regulatory framework for the energy sector.[14][15]
Permitting agencies
The Ministry of the Environment (Ministerio de Ambiente) is responsible for environmental permitting, including the review and approval of Environmental Impact Assessments. Its responsibilities include evaluating potential environmental impacts, establishing mitigation requirements, and monitoring compliance with environmental legislation.[15]
Regulatory agencies
ASEP (Autoridad Nacional de los Servicios Públicos) regulates and supervises Panama's electricity sector, including electricity generation, transmission, distribution, and commercialization.[16]
Grid operator
State-owned ETESA (Empresa de Transmisión Eléctrica S.A.) operates and maintains Panama's national transmission grid. Its Centro Nacional de Despacho (CND) operates the power system and the wholesale electricity market.
Electric utilities
Electricity distribution is handled by three mixed-ownership utilities:
- Naturgy Panamá operates the distribution companies EDEMET (Empresa de Distribución Eléctrica Metro-Oeste) and EDECHI (Empresa de Distribución Eléctrica Chiriquí), serving western and central-western areas of the country. Naturgy holds a 51% stake in each company, with the Panamanian state holding most of the remaining shares.
- ENSA, also known as Elektra Noreste, distributes electricity in Panama East, Colón, Darién, the Guna Yala Indigenous region, and the Pacific islands. Empresas Públicas de Medellín (EPM) holds a 51% stake, with the Panamanian state holding approximately 48%.
Leading energy companies
AES Panamá, InterEnergy and Enel are the main power generating companies in Panama. AES is also majority owner of the Costa Norte LNG terminal.
Energy sector employment data
During 2020, less than 20% of Panamanians worked in the industry sector, which includes energy-related employment.
The Panamanian government has noted the importance of working to retrain workers whose jobs are phased out during the movement away from fossil fuels.[17] A 2021 recovery plan from COVID-19 drafted by the UN found that 15,000 net additional jobs could come to Panama by 2024 by focusing on a green recovery.[18]
Electricity usage
Installed capacity
Panama's installed electrical capacity has grown steadily over the last decade.[15] As of 2020, the country had 4116 MW of installed capacity, relying on a mix of fossil fuels (44.2%), hydro power (43.9%), wind (6.6%) and solar (5.2%).[3]
While 94% of Panamanians have access to reliable electricity[3][17], rates of access in primarily indigenous areas are drastically different; in Comarca Ngöbe-Buglé the percentage of households with reliable electricity drops to approximately 4%.[17]
Production
Panama produced 10.9 TWh of electricity in 2020; hydro power accounted for 67.2% of all power generated, followed by fossil fuels (24.3%), wind (5.3%), solar (2.9%) and other renewable sources (0.3%).[3] EGESA (Empresa de Generación Eléctrica S.A.) is the state-owned company in the electrical sector responsible for developing projects in the generation marketplace.[15]
Demand
Panama is the top energy consumer in Central America and imports more than 80% of its energy.[19] In order to meet consumer demand, Panama is part of the SIEPAC (Sistema de Interconexión Eléctrica de los Países de América Central), the electrical transmission grid connecting Central American countries.[20]The commercial and public sectors used 58% of total electricity in 2014.[15] Three distributors are responsible for energy distribution in Panama: ENSA, Edemet, and Edechi.[21]
Consumption
Electricity is distributed via Panama's nationally interconnected system (SIN).[15] Electricity prices are impacted by weather patterns because of Panama's use of hydropower.[15]
Coal in Panama
Coal-fired Power Plants in Panama
In September 2021, the Panamanian energy minister announced a push towards clean energy with the notable pillar of ending coal use in power plants by 2023.[22] Panama's older Bahía las Minas power station shut down completely at the end of 2021[23][24], while the newer Cobre Panamá power station committed to converting to natural gas by December 2023.[25] Cobre Panamá ceased generating coal-fired electricity in November 2023 and lost its authorization to operate in March 2024.[26][27]
Panama joined the Powering Past Coal Alliance in 2023, committing the country to eliminate all coal-fired power by 2040.[28] However, Panama's coal phaseout ambitions have subsequently become less clear due to shifting government policy. In March 2025, Panama's new president ordered the Cobre Panamá plant to resume operations.[29] In early 2026, First Quantum Minerals reported that Unit 2 had returned to service in Q4 2025, while Unit 1 was recommissioned in February 2026.[30][31] A final decision from the Panamanian government on reopening the associated copper mine was expected by June 2026.[32]
Coal supply and consumption in Panama
Panama does not produce coal and accordingly has no new sources or projects. As of 2016, Panama consumed 330,693 short tons of imported coal and ranked 86th in the world for coal consumption.[33]
Coal transport via Panama
In 2014, approximately 15 million long tons of thermal coal passed through the Panama Canal.[34] The canal is a key conduit for shipments of Colombian coal to Asia and the Pacific coast of South America.[35]
Oil & Natural Gas in Panama
Domestic Production
Panama does not produce crude oil or natural gas.[20]
Consumption
Panama consumes 1.61 gallons of oil per capita daily (as of 2016), or 14 barrels per capita annually.[36]
Imports & source countries
The United States is a key supplier of fuel oil to Panama, along with Ecuador, Peru, and Mexico.[37]
Transport
The 131-kilometer Trans-Panama pipeline moves oil between the Atlantic and Pacific.[20]
Proposed new sources & projects
Panama has committed to phasing out power plants that burn diesel or other heavy fuels by the end of 2023, with the decommissioned capacity to be replaced by the 670 MW Gatún power station, a natural gas plant scheduled to begin operations in 2024.[6]
Renewable Energy in Panama
Hydro energy continues to play a key role in Panama's electricity mix, supplemented by growing percentages of solar energy[3][38][2], and a small but stable contribution from wind. In 2020, renewables' share of installed capacity and generation broke down as follows:[3]
- Hydro 43.9% of installed capacity, 67.2% of generation
- Wind 6.6% of installed capacity, 5.3% of generation
- Solar 5.2% of installed capacity, 2.9% of generation
By 2024, the percentages had shifted, reflected solar's growing importance:[2]
- Hydro: 36.77% of installed capacity, 59.94% of generation
- Solar: 11.95% of installed capacity, 7.86% of generation
- Wind: 6.69% of installed capacity, 5.12% of generation
In terms of capacity, prospective solar projects in Panama now greatly outpace prospective wind projects. As of mid-2026, Panama had 2.3 GW of new solar projects in various stages of development, including the country's largest solar project to date, the 530 MW Sajalices solar farm.[39] Prospective wind farms, mostly in Coclé province, accounted for another 600 MW of planned capacity.[40]
Panama's National Energy Plan 2015-2050 aims to diversify Panama's energy matrix to avoid dependence.[8] Government initiatives call for increased reliance on wind and solar energy, and replacement of imported petroleum with biofuels.[6] In 2022, the government announced plans to develop the world's largest biofuels production and distribution hub; the proposed Biorefineria Ciudad Dorada, scheduled to begin operating in 2027, would produce sustainable aviation fuel (SAF) and other biofuels from waste grease and purpose grown plant oils.[41]
Environmental & social impacts of energy in Panama
Extreme weather events - especially droughts and flooding, which affect hydroelectric plants - are a primary concern for energy infrastructure, production, and distribution in Panama.[15] Green energy production is a top priority for Panama as well as switching to electric vehicles, generating more wind and solar power, and monitoring the Panama Canal's water usage during periods of low rainfall.[42]
References
- ↑ "Yearly Electricity Data". Ember. Retrieved 2026-09-03.
{{cite web}}: CS1 maint: url-status (link) - ↑ 2.0 2.1 2.2 "Energy Outlook of Latin America and the Caribbean 2025 (pp 205-206)". OLACDE. 2025-12-16. Retrieved 2026-09-02.
{{cite web}}: CS1 maint: url-status (link) - ↑ 3.0 3.1 3.2 3.3 3.4 3.5 "Panorama Energético de América Latina y el Caribe 2021". OLADE. November 2021.
{{cite web}}: CS1 maint: url-status (link) - ↑ "IEA Policies and Measures Database © OECD/IEA". IEA. Retrieved 2021-06-04.
{{cite web}}: CS1 maint: url-status (link) - ↑ "Panama - Countries & Regions - IEA". IEA. Retrieved 2021-04-27.
- ↑ 6.0 6.1 6.2 6.3 "Panama aims to end coal imports, produce ethanol to cut emissions - minister". Reuters. September 29, 2021.
- ↑ "Plan Energético Nacional". Secretaría Nacional de Energía – Gobierno de Panamá. Retrieved 2021-06-09.
{{cite web}}: CS1 maint: url-status (link) - ↑ 8.0 8.1 "Demand analysis of emerging PV markets: Panama of Central and Southern America". Info Link. March 17, 2020.
{{cite web}}: CS1 maint: url-status (link) - ↑ Ministerio de Ambiente, República de Panamá (December 2020). "Contribución Determinada a Nivel Nacional de Panama (CDN1) Primera Actualización" (PDF). UNFCCC.
{{cite web}}: CS1 maint: url-status (link) - ↑ "Panama Launches New Programme Towards Implementing its NDC". United Nations. Retrieved 2021-04-27.
{{cite web}}: CS1 maint: url-status (link) - ↑ "Panama's Green Recovery from COVID-19 | Platform for REDESIGN 2020". Platform for REDESIGN 2020. Retrieved 2021-04-27.
- ↑ "Panama Canal begins transition to become carbon neutral by 2030 - Port Technology International". Port Technology International. April 27, 2021.
- ↑ "Irrumpe Panamá en el mercado de la transición energética en América". PV Magazine. January 10, 2022.
{{cite web}}: CS1 maint: url-status (link) - ↑ "DevelopmentAid". DevelopmentAid. Retrieved 2021-04-27.
- ↑ 15.0 15.1 15.2 15.3 15.4 15.5 15.6 15.7 "Renewables Readiness Assessment: Panama" (PDF). IRENA. May 2018.
{{cite web}}: CS1 maint: url-status (link) - ↑ "Leyes Sectoriales, Reglamentos, Normativas y Resoluciones". ASEP. 2021.
{{cite web}}: CS1 maint: url-status (link) - ↑ 17.0 17.1 17.2 "Panama: A Hub for an Inclusive, Just Energy Transition". Energy and Climate Partnership of the Americas. August 11, 2021. Retrieved October 8, 2021.
{{cite web}}: CS1 maint: url-status (link) - ↑ "COVID-19 Recovery: The Energy transition in Panama". recuperacionverde.com. Retrieved 2021-10-08.
- ↑ "Panama Economy - GDP, Inflation, CPI and Interest Rate". FocusEconomics | Economic Forecasts from the World's Leading Economists. January 2, 2014.
{{cite web}}: CS1 maint: url-status (link) - ↑ 20.0 20.1 20.2 "International - U.S. Energy Information Administration (EIA)". www.eia.gov. Retrieved 2021-04-27.
- ↑ "¿Cuántas distribuidoras hay en Panamá y cuáles son sus áreas de concesión?". ENSA. February 16, 2016.
- ↑ "EXCLUSIVE Panama aims to end coal imports, produce ethanol to cut emissions - minister". Reuters. 2021-09-30. Retrieved 2021-10-08.
- ↑ "Deudas y cambio climático acorralan planta de carbón". Observatorio SAOT (Sociedad, Ambiente y Ordenamiento Territorial) (in español). October 4, 2021.
{{cite web}}: CS1 maint: url-status (link) - ↑ "Financial Results 4th Quarter – 2021 (pp 10, 15)" (PDF). Celsia. May 2022.
{{cite web}}: CS1 maint: url-status (link) - ↑ "Panamá recibirá antes de junio el plan de conversión de la central eléctrica de First Quantum". Minería en Línea. February 9, 2022.
{{cite web}}: CS1 maint: url-status (link) - ↑ Informe Compilado: Inspección Intergubernamental a Mina Cobre Panamá, Ministerio de Comercio e Industrias (MICI), April 2024.
- ↑ Plan Ampliado para la Preservación y Gestión Segura (Cuido y Mantenimiento) — Mina Cobre Panamá, MICI, April 30, 2024.
- ↑ Colombia and Panama join growing coalition of countries committed to phasing out coal, Powering Past Coal Alliance, September 19, 2023.
- ↑ El gobierno de Panamá da indicios de querer reabrir una controvertida mina de cobre, Associated Press, March 21, 2025.
- ↑ Q4 2025 Production and Three-Year Guidance, First Quantum Minerals, January 2026.
- ↑ Q4 2025 Earnings Call Transcript, First Quantum Minerals, February 11, 2026.
- ↑ Panamá definirá antes de junio si reabre la mina de cobre de First Quantum, Bloomberg Línea, January 16, 2026.
- ↑ "Panama Coal Reserves and Consumption Statistics - Worldometer". www.worldometers.info. Retrieved 2021-04-27.
- ↑ Sabonge, Rodolfo (August 2014). "The Panama Canal expansion: A driver of change for global trade flows" (PDF). United Nations: ECLAC.
{{cite web}}: CS1 maint: url-status (link) - ↑ "The future of the Panama Canal: What's next for grain and coal shipping - FreightWaves". FreightWaves. April 26, 2019.
- ↑ "Panama Oil Reserves, Production and Consumption Statistics - Worldometer". www.worldometers.info. Retrieved 2021-04-28.
- ↑ "US marine fuels share rises in Panama". Retrieved 2021-04-28.
- ↑ "Panorama Energético de América Latina y el Caribe 2020". OLADE. November 27, 2020.
- ↑ "Global Solar Power Tracker". Global Energy Monitor. Retrieved 2026-09-02.
{{cite web}}: CS1 maint: url-status (link) - ↑ "Global Wind Power Tracker". Global Energy Monitor. Retrieved 2026-09-01.
{{cite web}}: CS1 maint: url-status (link) - ↑ "SGP BioEnergy to develop 2.6-billion-gallon biorefinery in Panama". Biomass Magazine. May 18, 2022.
{{cite web}}: CS1 maint: url-status (link) - ↑ Anastasia Moloney (April 20, 2021). "INTERVIEW-Panama boosts action to protect forests, drought-hit canal". Reuters.
