Central America Siepac grid: Remaining challenges

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Wednesday, July 24, 2013

Completion of a stretch in Costa Rica is all that remains to conclude Central America power interconnection Siepac but challenges remain.

Authorities are designing a mechanism to guarantee adequate remuneration for use of the lines, and a transmission rights scheme to promote PPAs, according to BNamericas' latest Energy Intelligence Series report Siepac: A regional power market comes to life.

The study also highlights benefits of the regional power initiative, from lowering prices, to improving energy security, to promoting renewables.

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Some argue, however, that electricity will be redirected to southern Mexico or that those who serve to benefit will be multinational firms.

Nevertheless, optimism still reigns with studies underway for a second circuit. Many see the interconnection as a first step toward wider integration across the Americas, such as the possibility to connect Siepac with Colombia across the Darién Gap.

"Siepac came to fruition over many years, across six countries with different histories, regulation, politics and levels of development, and with the involvement of dozens of private, public and multilateral actors. This is the sort of commitment and common vision essential to the functioning of an agreement such as the Pacific Alliance," concludes the report.