Guatemala has almost 1,500 MW of installed hydropower capacity, making up 41 per cent of the country’s overall energy production. Hydropower plays an important role in meeting ambitious targets for renewable energy generation. Over the past 10 years, energy consumption from renewable sources has doubled with generation representing between 65 per cent and 70 per cent of national consumption.
Guatemala’s hydraulic resources have the potential to add roughly 11 GW of hydropower capacity, of which roughly 6 GW is technically exploitable according to the Energy Ministry. However, the country continues to face a challenging environment for new hydropower development due to legal obstacles and high crime rates. In recent years 16 hydroelectric projects have reportedly been halted, amounting to USD1.5 billion in investment. Work continues to pass legislation that will improve the consultative process with indigenous peoples.
Despite many challenges, construction of the fourth phase of the 301 MW Renace hydroelectric complex in Alta Verapaz was completed in 2018, with Renace IV becoming operational in January 2019, adding 55 MW more hydropower capacity to the national system. The Renace complex is now the largest hydropower plant in the country.
Other hydropower facilities commissioned in 2018 include the 60 MW OXEC II project, the second installation downstream of the 26 MW OXEC plant on the Cahabón River, in the Alta Verapaz Department of north central Guatemala. OXEC II began operation in September 2018, after the project had been suspended in 2017 due to opposition from indigenous groups.
The power market in Guatemala is unbundled with about 50 companies (private and state-owned) acting in generation, distribution, and transmission. Guatemala is connected via the Central American Electrical Integration System (SIEPAC) to Honduras and El Salvador. Northern Guatemala is also connected to Mexico’s transmission system.
The Mexico-Guatemala interconnection project consists of a 103 kilometre 400 kV transmission line, with 32 kilometres in Mexico and 71 kilometres in Guatemala. Under an existing contractual arrangement, Guatemala’s electric utility, the National Institute of Electrification (INDE), acquires 120 MW of power from the Mexican energy authority, CFE, increasing to 200 MW when CFE has surplus energy. The contract enables CFE to purchase energy on the Guatemalan electricity market in the event of a contingency. This interconnection between the Mexican transmission system and the Central American market has been important for facilitating energy transactions between both countries through medium- and long-term bilateral contracts.
There is a strong push to reform the regional market in order to enable better opportunities to export energy to Mexico and Central America, specifically El Salvador where energy prices are not competitive. It was reported that in 2018, electricity exports to neighbouring countries, in particular to Mexico increased by 76 per cent compared to exports in 2017.
This country profile is featured in the 2019 Hydropower Status Report. Download the report: hydropower.org/statusreport
This profile was last updated in May 2019.
