Five years ago, Nicaragua was on the brink of a modern “dark age.”
Years of political myopia, partisan brinksmanship and fumbling mismanagement had pushed Nicaragua to the edge of political and economic collapse and social upheaval. At the center of Nicaragua’s malady was its most perplexing and debilitating symptom: a head-pounding energy crisis.
The country’s aging power grid, fueled by a feeble and sputtering collection of broken down and under-achieving energy plants, was unable to meet the country’s meager electricity demand. As a result, Nicaragua’s economy flickered off and on with the lights, and social tensions lit every time the power dimmed.
That was then. Five years later, Nicaragua’s future is looking a lot brighter.
Since returning to power in 2007, the Sandinista government has worked with the private sector and Venezuela’s Hugo Chávez to fix the immediate energy problem by installing an additional capacity of 343 megawatts of power— 41% more power than Nicaragua was producing five years ago.
Now, for the first time in more than a decade, Nicaragua is producing a comfortable surplus of energy.
With electricity demand finally being met, the government is now moving to phase II of its energy revival: Switching to renewable energy and weaning Nicaragua off its insalubrious and dipsomaniacal craving for foreign oil.
Nicaragua, despite its abundant rivers, lakes, volcanoes and wind-swept plains, was foolishly designed to be a gas-guzzler. While that’s a relative dependency by international standards (Nicaragua consumes 14.6 million barrels of petroleum a year, about 22% less than what the United States consumes in a day), oil accounts for 70% of Nicaragua’s power generation, so the economy takes a kick to the shins every time international mischief sends petroleum prices soaring.
In fact, Nicaragua has the highest energy costs in Central America, despite having the poorest economy. Electricity costs have become so high in Nicaragua that the Sandinista government is partially subsidizing a good chuck of the country’s electricity bill; 80% percent of households receive an electricity subsidy, according to the government.
Not only is the situation unsustainable, it’s also worsening. Electricity rates were hiked again by 9% on Jan. 5, forcing the government to dig deeper into its ALBA-lined pockets to pay for the continued subsidies.
So not only is renewable energy a nature-friendly idea, it’s also imperative to Nicaragua’s survival.
“The energy issue is an essential component for our sustainable development to assure the wellbeing and progress of the current and future generations,” said Emilio Rappaccioli, Nicaragua’s Minister of Energy and Mines.
The switch to renewable energy sources, therefore, has become a linchpin in the Sandinista government’s national development plan.
Not only will it reduce the economy’s tremulous dependency on foreign oil, but it will also help the government bring electrification, development and progress to the countryside, and do so in a way that protects the environment by deterring deforestation and reducing harmful emissions, administration officials say.
“This is about the conservation of natural resources, assuring energy security policies and ensuring the competitiveness of the country,” Rappaccioli said.
Presidential advisor Paul Oquist, a fierce statist, academic and leading voice on Sandinista development policy, adds that renewable energy policy is also key to providing citizen security, labor stability, peace and development in the country.
“Who is going to invest in a country without energy?” Oquist demanded.
The switch from black to green
Although Nicaragua’s 40% increase in energy production over the past five years has come mostly through the smoking stacks of eight fuel-burning power plants from Venezuela, the country’s renewable revolution has already started.
Geothermal production has increased and Nicaragua has started a very successful foray in to wind-energy production on the privately owned Amayo I and II wind farms, which are now producing 63 megawatts of power.
By the end of 2012—a year the UN has dubbed “The Year for Sustainable Energy for All”—Nicaragua hopes to reduce its dependency on foreign oil by an additional 10%, finishing the year with an energy matrix that is 40% from renewable sources (hydroelectric, geothermal, wind and biomass).
And that’s just the beginning. By 2016, once the massive Tumarín hydroelectric plant comes on line, generating an additional 253 megawatts of power (50% of the country’s total energy demand), Nicaragua will generate 94% of its own electricity from renewable energy sources, and only have to pony up to world oil costs to cover the remaining 6%.
That means in a five-year period, Nicaragua will have gone from being the most oil-dependent nation in Central America, to the least. And in a 10-year period, Nicaragua’s energy sector will have been transformed from a candle-lit backwater basket case to an international leader in renewable technologies.
Nicaragua’s push for a renewable energy revolution has united the country like few other issues, and gotten people thinking—perhaps for the first time in the country’s history—in terms of long-term national development.
“This is one of the few issues in Nicaragua that has a clear long-term national vision,” Iván Cortes, director of Renewable Resources for the Ministry of Energy and Mines, told The Nicaragua Dispatch. “We have suffered personally the effects of the severe energy crisis, and that’s why the whole population supports renewable energy.”
The Sandinistas’ efforts to switch to renewable energy has also drawn nods of approval from the international community, at a time when many foreign governments are questioning many of the Ortega Administration’s other moves.
“In keeping with United States international policies and goals, the U.S. Government recognizes ambitious efforts in Nicaragua to address climate change by radically shifting its electricity generation from petroleum-based to renewable sources within a short window of time,” says William Cobb, the U.S. Embassy’s Energy and Environment Officer.
That’s an understatement as far as Nicaraguan authorities are concerned.
“I don’t know of any other country in the world that has done this,” Oquist told The Nicaragua Dispatch, referring to Nicaragua’s planned 70% reduction in oil dependency in slightly more than seven years. “You must recall that this is taking place in the second-poorest country in Latin America and amid the worst financial, economic social and increasingly political crisis of world capitalism since the Great Depression of the 1930s.”