Energy profile: Panama

From Global Energy Monitor

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This page is part of Global Energy Monitor's Latin America Energy Portal.
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Fuel mix (fossil fuels vs renewables)

Total energy supply by source, Panama 1990-2018, Source: IEA

Panama currently relies on imported oil for the majority of its total energy supply.[1][2][3][4]

In the electrical sector, hydro energy also plays a key role, accounting for 43.9% of installed capacity and 67.2% of total generation as of 2020.[1] Other renewable sources such as wind and solar supply a small but growing percentage of the country's electrical needs.[1][5]

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.[6][7]

Greenhouse gas emissions targets

Total final energy consumption by sector (1990-2014) in Panama, Source: SNE

Panama aims to be carbon neutral by 2050, partially by emphasizing forest restoration to absorb CO2 emissions.[8] 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.[9][10] In 2021, the Panama Canal officially began decarbonizing its operations in order to be carbon neutral by 2030.[11] Government plans also call for increased adoption of electric vehicles to reduce fossil fuel emissions.[4][12]

Government energy agencies & other key players

National energy ministry

The SNE (Secretaría Nacional de Energía) works under the office of Panama's President to move forward with energy related planning and policy.[13]

Permitting agencies

The Ministry of the Environment (Ministerio de Ambiente) is responsible for permitting and Environmental Impact Assessments.[14]

Regulatory agencies

The SNE is responsible for the regulatory framework for energy policy.[14] The ASEP (Autoridad Nacional de los Servicios Públicos) is responsible for regulation of the electricity sector in Panama.

Electric utilities

The ASEP oversees all aspects of Panama's electrical sector.[15]

National oil company

Panama does not have a national oil company.

Leading energy companies

Naturgy is the leading energy distributor in Panama.[16] Terpel and EPAPetrol are leading oil and gas companies in Panama.

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.[14] 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%).[1]

While 94% of Panamanians have access to reliable electricity[1][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%).[1] EGESA (Empresa de Generación Eléctrica S.A.) is the state-owned company in the electrical sector responsible for developing projects in the generation marketplace.[14]

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.[14] 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).[14] Electricity prices are impacted by weather patterns because of Panama's use of hydropower.[14]

Coal 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.[22]

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.[23] Panama's older Bahía las Minas power station has shut down completely[24][25], while the newer Cobre Panamá power station has committed to converting to natural gas by December 2023.[26]

Panama coal consumption between 1988-2016, Source: Worldometers

In 2014, approximately 15 million long tons of thermal coal passed through the Panama Canal.[27] The canal is a key conduit for shipments of Colombian coal to Asia and the Pacific coast of South America.[28]

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.[29]

Imports & source countries

The United States is a key supplier of fuel oil to Panama, along with Ecuador, Peru, and Mexico.[30]

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.[4]

Renewable Energy in Panama

Panama's renewable energy sector currently depends heavily on hydropower, and the National Energy Plan 2015-2050 aims to diversify Panama's energy matrix to avoid dependence.[7] Government initiatives call for increased reliance on wind and solar energy, and replacement of imported petroleum with biofuels.[4] 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.[31]

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.[14] 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.[32]

References

  1. 1.0 1.1 1.2 1.3 1.4 1.5 "Panorama Energético de América Latina y el Caribe 2021". OLADE. November 2021.
  2. "IEA Policies and Measures Database © OECD/IEA". IEA. Retrieved 2021-06-04.
  3. "Panama - Countries & Regions - IEA". IEA. Retrieved 2021-04-27.
  4. 4.0 4.1 4.2 4.3 "Panama aims to end coal imports, produce ethanol to cut emissions - minister". Reuters. September 29, 2021.
  5. "Panorama Energético de América Latina y el Caribe 2020". OLADE. November 27, 2020.
  6. "Plan Energético Nacional". Secretaría Nacional de Energía – Gobierno de Panamá. Retrieved 2021-06-09.
  7. 7.0 7.1 "Demand analysis of emerging PV markets: Panama of Central and Southern America". Info Link. March 17, 2020.
  8. Ministerio de Ambiente, República de Panamá (December 2020). "Contribución Determinada a Nivel Nacional de Panama (CDN1) Primera Actualización" (PDF). UNFCCC.
  9. "Panama Launches New Programme Towards Implementing its NDC". United Nations. Retrieved 2021-04-27.
  10. "Panama's Green Recovery from COVID-19 | Platform for REDESIGN 2020". Platform for REDESIGN 2020. Retrieved 2021-04-27.
  11. "Panama Canal begins transition to become carbon neutral by 2030 - Port Technology International". Port Technology International. April 27, 2021.
  12. "Irrumpe Panamá en el mercado de la transición energética en América". PV Magazine. January 10, 2022.
  13. "DevelopmentAid". DevelopmentAid. Retrieved 2021-04-27.
  14. 14.0 14.1 14.2 14.3 14.4 14.5 14.6 14.7 "Renewables Readiness Assessment: Panama" (PDF). IRENA. May 2018.
  15. "Leyes Sectoriales, Reglamentos, Normativas y Resoluciones". ASEP. 2021.
  16. "Una historia que inició en 1998". www.naturgy.com.pa. Retrieved 2021-04-27.
  17. 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.
  18. "COVID-19 Recovery: The Energy transition in Panama". recuperacionverde.com. Retrieved 2021-10-08.
  19. "Panama Economy - GDP, Inflation, CPI and Interest Rate". FocusEconomics | Economic Forecasts from the World's Leading Economists. January 2, 2014.
  20. 20.0 20.1 20.2 "International - U.S. Energy Information Administration (EIA)". www.eia.gov. Retrieved 2021-04-27.
  21. "¿Cuántas distribuidoras hay en Panamá y cuáles son sus áreas de concesión?". ENSA. February 16, 2016.
  22. "Panama Coal Reserves and Consumption Statistics - Worldometer". www.worldometers.info. Retrieved 2021-04-27.
  23. "EXCLUSIVE Panama aims to end coal imports, produce ethanol to cut emissions - minister". Reuters. 2021-09-30. Retrieved 2021-10-08.
  24. "Deudas y cambio climático acorralan planta de carbón". Observatorio SAOT (Sociedad, Ambiente y Ordenamiento Territorial) (in español). October 4, 2021.
  25. "Financial Results 4th Quarter – 2021 (pp 10, 15)" (PDF). Celsia. May 2022.
  26. "Panamá recibirá antes de junio el plan de conversión de la central eléctrica de First Quantum". Minería en Línea. February 9, 2022.
  27. Sabonge, Rodolfo (August 2014). "The Panama Canal expansion: A driver of change for global trade flows" (PDF). United Nations: ECLAC.
  28. "The future of the Panama Canal: What's next for grain and coal shipping - FreightWaves". FreightWaves. April 26, 2019.
  29. "Panama Oil Reserves, Production and Consumption Statistics - Worldometer". www.worldometers.info. Retrieved 2021-04-28.
  30. "US marine fuels share rises in Panama". Retrieved 2021-04-28.
  31. "SGP BioEnergy to develop 2.6-billion-gallon biorefinery in Panama". Biomass Magazine. May 18, 2022.
  32. Anastasia Moloney (April 20, 2021). "INTERVIEW-Panama boosts action to protect forests, drought-hit canal". Reuters.