Renewable resources energy production/Electricity generation capturing energy with windmills
Renewable resources energy production/Electricity generation capturing energy with windmills
Business Model Description
Build high-tech electric power generation parks through windmills as a clean and renewable solution, with zero (0) emission of polluting gases and its value chain.
Expected Impact
Electricity generation through wind turbines avoids air pollution for the benefit of people, as well as non-global warming by CO2.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Panama: Central Region
- Panama: Central Region
- Panama: Central Region
Sector Classification
Renewable Resources and Alternative Energy
In Panama, fossil fuels for the year 2020 emitted more than 3,901 megatons of CO2. Renewable resources as alternative energy, are inexhaustible, competitive, clean sources, abundant throughout the planet as they are; hydroelectric, wind, solar, geothermal, tidal and biomass-based energy, which are constituted as the replacement of thermal energy.
Political priority
The decisions agreed in 2015 at the COP21 Paris Convention to which Panama subscribed, is a historic starting point to combat climate change and thus encourage each country to generate a viable platform for both State investment as well as the Private with a view to producing energy with low levels of carbon emissions.
Gender and Marginalization
In Panama 6% of the population lacks electricity service. Gender inequality is addressed in Climate Change summits as an important factor in strengthening efforts against climate warming. The link between gender, climate and security has shown positive signs for climate change in the countries with greatest progress fighting against gender inequality.
Investment opportunities
The global alignment in its different Conventions and agreements for the year 2030 and 2050 in relation to climate change, is representing a great investment opportunity for governments as long as in their countries they can generate laws that encourage attracting foreign private capital .
(Obstacles and Bottleneck) Obstacles such as the lack of alignment of a country to the global trend with climate change, ignorance of technology, ignorance of the social and environmental advantages as well as the incipient Government management.
Alternative Energy
In Panama, more than 35% of its energy matrix is still maintained with fossil combustion. Alternative energy as a substitute for fossil combustion has become the most viable and sustainable option for people in terms of health, as well as for our planet, since they do not generate carbon dioxide and we can obtain it from our natural resources in an abundant way .
Since 2016 Panama sanctioned the law by which the Paris agreement is ratified, which establishes the adoption of National plans that seek to deal with climate change. Since then, initiatives have been carried out such as the creation of the Ministry of the Environment, the National Energy Plan as a roadmap to develop the energy sector.
Gender and Marginalization
In Panama 6% of the population lacks electricity service. Gender inequality is addressed in Climate Change summits as an important factor in strengthening efforts against climate warming. The link between gender, climate and security has shown positive signs for climate change in the countries with greatest progress fighting against gender inequality.
By 2020 Panama is launching its Energy Transition Plan, which is based on the SDGs with a view to making the sector reliable, safe, sustainable, affordable and accessible. It is important to note that all this is framed within the pillars of the transition: decarbonization, decentralization, digitization, and democratization.
(Obstacles and Bottleneck) Obstacles such as the lack of alignment of a country to the global trend with climate change, ignorance of technology, ignorance of the social and environmental advantages as well as the incipient Government management.
Wind Technology and Project Developers
Pipeline Opportunity
Renewable resources energy production/Electricity generation capturing energy with windmills
Build high-tech electric power generation parks through windmills as a clean and renewable solution, with zero (0) emission of polluting gases and its value chain.
Business Case
Market Size and Environment
> USD 1 billion
5% - 10%
3,800 MW produced by Panama (63% generation with renewable resources and 37% non-renewable)
According to the National Public Services Authority, Panama has a 7.01% share in the Energy Matrix through wind turbines (WIND POWER) at the end of 2021, which represents 266 MW contributed.
Currently there are more than 2 projects with mill wind turbines and on average with (133) MW of power in generation to the Energy Matrix.
Indicative Return
10% - 15%
The profile of the project's efficiency indicators was estimated with the parties involved and various information.
Comparison of other projects of the same magnitude with efficiency indicators similar to the case study.
Investment Timeframe
Medium Term (5–10 years)
Appropriate investment term for this type of large-scale project since it requires pre-feasibility investigations, environmental studies, government permits and infrastructure construction where even its parts must be imported.
Ticket Size
> USD 10 million
Market Risks & Scale Obstacles
Capital - Limited Investor Interest
Market - High Level of Competition
Capital - Limited Investor Interest
Impact Case
Sustainable Development Need
Fossil fuels in Panama emitted 9,301 Megatons of CO2 for the year 2020, placing the country in position No. 76 out of 184 countries.
Currently Panama at the end of April 2022 the unemployment rate stood at 9.9% and informality within the economically active population increased by 0.6%, remaining at 48.2%.
Gender & Marginalisation
Currently there is 6% of the Panamanian population that does not have access to electricity, especially in marginalized rural areas.
Expected Development Outcome
According to the National Energy Plan 2015-2050, Panama aims to increase the use of renewable energy by 2050, setting a goal of a 15% increase in non-hydroelectric renewable energy capacity by 2030 and 30% by 2050 to reduce sector emissions by 11 million tons by 2030 and 60 million tons by 2050.
Given the technological level and the size of the investment to develop electricity generating projects with renewable resources, employment is boosted.
Gender & Marginalisation
The generation of electricity based on photovoltaic panels will directly benefit marginalized sectors with more accessible energy in terms of cost given its inclusive nature.
Primary SDGs addressed
7.b.1 Installed renewable energy-generating capacity in developing countries (in watts per capita)
7.1.1 Proportion of population with access to electricity
In Panama until 2013 there was only participation of thermal and hydro generation and from 2014 onwards, wind and photovoltaic energy is incorporated with great acceptance and significant growth to date.
Panama generates 3,800 MW installed with a firm capacity of 2,800 on average supply and an internal demand of 2,000 MW. Currently its Energy Matrix is 62.95% renewable energy and the non-renewable difference. The participation of wind energy as a renewable resource is 7% at the end of 2021 and represents 3.96 (e -5) MW per capita.
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Public sector
Indirectly impacted stakeholders
People
Planet
Outcome Risks
The concept of reliability in this business model is questionable since they cannot perform at their best under any permanent weather condition.
Gender marginalization risk: Once a higher percentage of participation in the energy matrix is incorporated, its accessibility will be more democratized in terms of cost.
Impact Risks
Large tracts of land to be used for this business model, which affects the availability for agricultural or livestock food activities.
Low production to the expected average given sudden changes in the weather.
Every year hundreds of animals die due to the way this renewable energy is generated, especially birds and bats.
Impact Classification
What
With the implementation of the use of renewable energy through wind turbines, CO2 emissions per MW of power generated are stopped, thus contributing directly to non-global warming.
Risk
Affectations for people if the generation efficiency is diminished by some stationary climatic condition, as well as for the planet to resort to previous modalities.
Impact Thesis
Electricity generation through wind turbines avoids air pollution for the benefit of people, as well as non-global warming by CO2.
Enabling Environment
Policy Environment
On September 21 2016, Panama ratified, accepted, approved, its adherence to the historic Paris agreement on climate change and established the creation of a Ministry, laws and the route of a National Strategic Plan 2015-2050.
Ministry of the Environment with governing functions to formulate, apply, plan, direct, coordinate, execute and evaluate the National Environmental Policy, applicable to all levels of government.
In November 2020, the Cabinet Council approved the strategic guidelines of the Energy Transition Agenda, a measure that seeks to encourage investment in the sector, improve competitiveness and bring electricity to the communities indicated in the Beehive Plan.
Financial Environment
Financial incentives: For this type of investment, access to financing is maintained under normal conditions with local private banks, as well as management in international financial markets or with more favorable options with multilateral entities in the region.
Fiscal incentives: For this type of investment, exemptions from import tariffs for wind power components, tax credits of up to 5% of the value of the investment, are maintained as an incentive.
Regulatory Environment
General Environmental Law No. 41; which establishes the basic principles and standards for the protection and promotion of the sustainable use of natural resources. It also orders environmental management and integrates it with social and economic objectives.
General Secretariat of Energy; It is in charge of conducting the country's energy policy, within the current constitutional framework, to guarantee a sufficient, high-quality, economically viable and environmentally sustainable supply of energy resources.
National Authority of Public Services (ASEP); It is an autonomous regulatory entity that oversees the provision of water supply, sewerage, telecommunications, natural gas and electricity. Establishes rules, regulations, enforceable acts and their compliance.
Marketplace Participants
Private Sector
Capital or local private equity contribution, bank financing under normal conditions of local and international banks, foreign investment.
Government
Ministry of the Environment, National Secretariat of Energy, Public Services Authority.
Target Locations
Panama: Central Region
Panama: Central Region
Panama: Central Region
References
- (1) UN, COP21, 2015 Paris Agreement, Climate Change. https://unfccc.int/en/process-and-meetings/the-paris-agreement/what-is-the-paris-agreement
- (2) UN, Framework Convention on Climate Change, 1994. https://unfccc.int/es/process-and-meetings/the-convention/que-es-la-convencion-marco-de-las-naciones-united-on-climate-change
- (3) EURO CLIMA, August 16, 2016. Parliament of Panama approves the Paris Agreement. https://euroclimaplus.org/noticias-anteriores/item/2006-panama-ratifica-acuerdo-de-paris-contra-cambio-climatico
- (4). Ministry of the environment Dec/2020, Panama delivers commitments to the United Nations convention. https://www.miambiente.gob.pa/panama-entrega-compromiso-a-la-convencion-de-las-naciones-unidas-sobre-cambio-climatico/
- (5) Law 41 of 2008 plus its General Environmental reforms. Official Gazette Oct, 2016. www.gacetaoficial.gob.pa/pdfTemp/28131_A/GacetaNo_28131a_20161004.pdf
- (6)National Secretariat of Energy, June 2022, https://www.energia.gob.pa/
- (7) Ministry of the Presidency of Panama, November 2020, approves guidelines for electric mobility, https://www.presidencia.gob.pa/Noticias/Gabinete-aprueba-lineamientos-de-la-agenda-de-transicion-energetic
- (8) National Authority for Public Services, June 2022, https://www.asep.gob.pa/
- (9) LexLatin, 03/2020, AES PANAMÁ, acquires a wind farm in PENONOME, https://lexlatin.com/noticias/aes-panama-adquiere-el-parque-eolico-penonome
- (10) Structuralia, 11/2016, Wind Farm in PENONOME, the largest in Central America, https://lexlatin.com/noticias/aes-panama-adquiere-el-parque-eolico-penonome
- (11) Strategic Energy, May 14, 2020, https://www.energiaestrategica.com/panama-anticipa-su-agenda-de-transicion-energetica-al-2030-y-anuncia-proxima-ley-con-incentivos-fiscales-for-electric-mobility/
- (12) bnamericas, 01/2021, X-ray of the Wind and Solar portfolio in Panama, https://www.bnamericas.com/es/noticias/radiografia-a-la-cartera-de-desarrollo-eolico-y-solar-from Panama
- (13) ANPanamà, 03/2022, Laudano Wind Farm will generate 3.8% of the Panamanian Energy Matrix, ttps://www.anpanama.com/11656-Parque-Eolico-genera-el-38-de-la-matriz- energetica-de-panama.note.aspx