Panama will call for tender for renewables

Issa Rodriguez - Siaska SSS Lorenzo,  January 22, 2024

Arias Law - The Presidency of the Republic of Panama, through the National Secretariat of Energy (SNE) issued Resolution N° MIPRE-2024-0001384 that contains a series of recommendations addressed to the Electric Transmission Company, S.A., known as ETESA, to adopt measures for the contracting of power and/or energy from renewable sources to guarantee, in the long term, the supply of the electricity demand of the end customers of the electricity distribution companies, and simultaneously, comply with the Strategic Guidelines of the Energy Transition Agenda, and ensure reliability and affordability in terms of energy prices, as well as fulfil the commitment defined by Panama when ratifying the Paris Agreement to strengthen the resilience and increase the energy local matrix.

The SNE recommends that ETESA prepare the Tender documents necessary to carry out the public bid before the Public Services Authority (in Spanish, "Autoridad de los Servicios Públicos" - ASEP) and that it be published during the month of February 2024, to receive proposals in the second quarter of 2024, considering the modifications that the regulator may include to the applicable deadlines established in the Purchase Rules.

In addition, the SNE proposes to carry out a technical/economic evaluation using various prices that consider the predominant seasons in Panama (summer and rainy seasons), to determine if there are benefits in bulk contracts and if so, to implement this measure.

The contracting scheme for both, firm power and energy was set as follows:

1. Power: for existing hydroelectric plants with firm power availability and for renewable generation plants (solar, wind or hydroelectric plant systems), new or existing, with battery backup;
2. Energy: for new and existing renewable generation plants; and,
3. Firm power with associated energy: For existing hydroelectric power plants with firm power availability and for new and existing renewable generation plants with battery storage system.

Finally, for existing renewable plants, the supply start date would be September 1, 2026, and for new wind or hydroelectric renewable plants until January 1, 2029. The contracts would be for 10 and 20 years for existing or new plants, respectively. However, the maximum term for all contracts arising from this tender would be August 31, 2046, regardless of the starting supply date.