REGION profile

North and Central America

The abundance of natural resources in North and Central America makes the region highly suited for renewable energy production. A large portion of the electricity market is supported by hydropower and has been for decades.‍‍
Hydropower installed capacity
205 GW (2020)
Pumped storage installed capacity
23 GW (2020)
Generation by hydropower
724 TWh (2020)

Many countries throughout the region have adopted policies to increase the share of renewables to transition to a low-carbon economy. Modernising the existing hydropower fleet and developing new projects to meet energy demands and ensure renewable development is increasingly important.

Despite the reduction in demand due to the Covid-19 pandemic, hydropower remained vital for grid reliability and, in several countries, generation by hydropower even increased. Recovery plans across the continent have had a strong focus on the green energy transition, the reduction of fossil fuel imports, investment in transmission and distribution lines, digitalisation, and the strengthening of regional energy cooperation.

Under an initiative overseen by Stanford University entitled ‘Uncommon Dialogue’, various U.S. industry and civil society stakeholders have come together to identify solutions to decarbonise the country’s electricity system while at the same time seeking to conserve the biodiversity and ecosystems of rivers. Three opportunities arise from this dialogue: rehabilitation of dams to increase safety and mitigate environmental impacts; retrofitting powered projects and adding capacity in non-powered dams; and decommissioning those dams that no longer provide significant benefits.

Romaine-4 hydropower plant under construction in Québec, Canada, Credit: Hydro-Québec

A recent transborder initiative between the U.S. and Canada highlights the importance of regional interconnections in contributing to the transition to a low carbon economy. The Appalaches-Maine Interconnection Line, approved in 2020, will increase the mix of hydropower in the total U.S. electricity share. To be commissioned in 2023, the transmission line will supply 9.45 TWh of hydropower from Quebec to Massachusetts and 0.5 TWh to Maine over 20 years, shrinking annual CO₂ emissions by three million metric tonnes.

In Canada, hydropower continues to provide around 60 per cent of the country’s total annual electricity generation and represents more than half of total generation capacity. In 2020, despite the on-site health and safety challenges presented by the Covid-19 pandemic, more than 4 GW of projects continued to progress toward completion. The Lower Churchill project synced its first unit to the Labrador electricity grid in September 2020 with power from the three other units later coming online; together they are expected to reach 3,074 MW.

In April 2020 the Canadian government proposed a budget of C$17.6 billion (US$14 billion) for green recovery programmes for fiscal year 2021/2022.

The proposals suggest an investment of C$40.4 million (US$33.15 million) in hydropower development over the next three years, which could advance several hydropower projects such as the Atlin Hydro expansion project in Yukon and a feasibility study of the Kivalliq HydroFibre Link project in Nunavut. Additionally, in December 2020 Canada released a new climate policy which expressed continued commitment to reach 90 per cent non-emitting electricity by 2030 and to achieve net zero emissions electricity before 2050. The plan also presents multiple initiatives that boost demand for hydropower including new transmission capacity to supply regions phasing out coal, and the electrification of transport, buildings and industry to achieve greenhouse gas emissions reductions.

Muskrat Falls hydropower project, Canada, Credit: Nalcor Energy

Costa Rica almost reached its goal of 100 per cent renewable electricity production in 2020. It produced 99.78 per cent of electricity generation from renewables, with hydropower representing 72 per cent. Despite the Covid-19 pandemic resulting in a drop in electricity demand by 2.8 per cent compared to 2019, hydropower generation increased by about 6 per cent compared to 2019.

Mexico’s hydropower fleet was identified as having a high potential for revitalisation in a joint study by the IDB and IHA conducted in 2020. The nation has an ageing hydropower fleet, with about 85 per cent of installed capacity over 10 GW commissioned over 30 years ago. The government has developed plans to upgrade 18 existing hydropower plants to achieve 26 GW of hydropower capacity by 2030.

The Mexican government is focused on increasing hydropower capacity through the rehabilitation and modernisation of the state-owned company CFE’s existing assets as well as retrofitting the National Water Commission’s non-powered irrigation dams. There is an agreement between CFE and the commission to equip 15 irrigation dams for hydropower generation, creating 200 MW of installed capacity, with plans to incorporate 10 additional dams. In addition, the government wants to promote projects under 30 MW as per an agreement with China that includes a collaboration with the International Centre on Small Hydro Power to study basin water availability and the feasibility of new projects.

El Salvador remains heavily reliant on fossil fuel imports, accounting for almost a third of its total electricity supply. Among the country’s mix of renewables, hydropower however still represents the largest share. The government is developing a flagship hydropower project that will help in the decarbonisation of the country’s electricity system: the 65.7 MW El Chaparral (renamed 3 de Febrero) project is expected to begin operation in 2021.

In Honduras, the Inter-American Development Bank approved a US$18 million loan to support the modernisation of the 300 MW Francisco Morazán hydropower plant, the largest in the country. Also known as El Cajon, the plant became operational in 1986 and its modernisation will boost its reliability and efficiency.

Puerto Rico faced an unstable year in 2020 as it faced the fallout from several natural disasters. Uneven energy demand due to Covid-19 led to an increase of fossil fuel generation. The country is however exploring options to revitalise hydropower facilities to meet a goal of 100 per cent renewable energy generation by 2050.

Jamaica’s government announced plans to develop pumped storage hydropower that would help achieve 50 per cent of renewable energy generation by 2030, however this announcement came before the pandemic hit budget allocations.

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