Costa Rica: Doing Renewable Energy for 70 Years

Wednesday, April 03, 2019

Throughout its seven decades of existence, Costa Rica’s state-owned electric utility—the Instituto Costarricense de Electricidad (ICE)—has had a mandate to use renewable energy. That gives the country a deep well of experience from which to draw as it tries to reduce its carbon footprint even further. In an interview with the Energy and Climate Partnership of the Americas (ECPA), the public utility’s top executive talked about the role the company will play in the country’s ambitious Decarbonization Plan. Hint: It’s not just about going green, but about going digital too.

The law that created ICE—on April 8, 1949—established that the company should produce electricity in an environmentally responsible way, using renewable resources, said Irene Cañas, Executive President of Grupo ICE, the corporate group that includes electricity and telecommunications services provider ICE and several subsidiaries. The people behind that founding law were “very visionary,” she added, noting that the creation of ICE came just four months after the government of President José Figueres had abolished the country’s army.

Sharing its Know-How

On April 23-24, Costa Rica will host a technical exchange mission on Renewable Energy Infrastructure Planning and Management, geared toward energy officials from the Caribbean and Central America. The mission includes site visits to the Miravalles Solar Park, Miravalles III Geothermal Plant, and Guanacaste Windfarm. Experts from ICE will discuss the country’s breadth of experience in renewables, including steps it has taken to diversify its energy supply.

The mission is an initiative of the Department of Sustainable Development of the Organization of American States (OAS)—the Technical Coordination Unit of the Energy and Climate Partnership of the Americas (ECPA)—with the support of the Costa Rican and U.S. governments. It will be followed by a daylong meeting in San José, Costa Rica, to continue preparations for the Fourth ECPA Ministerial Meeting, now scheduled to take place in early 2020 in Jamaica.

“Back then, we didn’t use the word sustainability, but practically speaking what the law describes is sustainability,” she said in a recent phone interview. The law also put an end to an era in which electricity had been provided by a foreign company and was not available to everyone, and instead decreed that this resource would be used “to strengthen the national economy and promote the greater well-being of the Costa Rican people.”

It’s no wonder, given that backdrop, that electricity reaches nearly everyone in Costa Rica—99.4 percent of the population, with the goal still to get to 100 percent—and virtually all of it comes from renewables.

Hydroelectricity, the country’s original renewable resource, today accounts for nearly three-fourths of the electricity generated; wind comes next (15 percent), followed by geothermal (8.5 percent), with biomass and solar power each under 1 percent. The country turns to fossil fuels to fill in any gaps.

This is an El Niño year, which means the rainy season will be shorter and drier than normal. As a result, ICE is trying to get its newest, 55-megawatt (MW) geothermal plant up and running by the end of April, ahead of the original start date of July. It’s not that it expects electricity shortages—after all, bunker fuel is always on tap for backup thermal generation—but that it wants to stay green. “We want to and are committed to reducing the carbon footprint,” Cañas said. “In this case, moving up the operation of Pailas II will greatly ease the need to generate with fossil fuels.”

That kind of balancing act is something ICE is used to after all these years. In the interview, Cañas talked about the company’s evolution from first relying solely on hydroelectric power, to then adding thermal generation for backup, and later to incorporating geothermal, wind, and other sources. ICE has now had geothermal plants in operation for 25 years and has the third-largest installed geothermal capacity in the Americas (207 MW), after the United States and Mexico, according to a recent company press release.

“We are fortunate to have a varied combination of renewable sources,” noted Cañas, who took the helm of Grupo ICE last May, having served in the previous administration as Deputy Minister in the Ministry of Environment and Energy.

Asked what advice she would give her counterparts in other countries that may not be as far along in renewables, Cañas stressed the need to “have a clear sense of the potential that is there from each source.” Not all countries have geothermal or hydroelectric, but they do have wind and biomass and solar, she said.

“With variable energy, you have to have a combination of sources—more so for those that depend on the climate,” she said. Reliance on climate-dependent renewables requires the optimum mix and distribution of resources, along with sustainable practices, to ensure a sufficient supply of electricity to meet demand, according to Cañas.

Costa Rica has plenty of supply. In fact, a few months ago ICE announced that a major hydroelectric project that had been in the planning stages, El Diquis, was being suspended indefinitely. Cañas said the investment in what would have been the largest hydro project in Central America no longer made sense because the growth rate in electricity consumption had begun to level off with a changing economy.

Many energy-intensive manufacturers have migrated to places with lower wages, she explained, and Costa Rica’s economy is now based more on services. A typical service business—whether a health-care provider, call center, or tourism operation—needs mainly air conditioning, lights, and computers, not industrial equipment. “There is not enough demand for the Diquis project to absorb,” Cañas said.

ICE and Decarbonization

ICE will have a critical role to play in the coming years, as Costa Rica sets its sights on decarbonizing its entire economy (see ECPA story, Costa Rica: Full Speed Ahead toward Decarbonization).

First, Cañas said, it needs to continue to do what it has always done—develop the country’s renewable energy sources sustainably. ICE is also planning to upgrade some of its older transmission and distribution infrastructure and install smart meters throughout its system to provide real-time data to the utility and its customers. These digital devices will, among other things, allow customers to better manage their electricity use—for example, by programming the system to turn lights on and off at certain times or water the garden in off-peak hours—and enable utility crews to identify and respond to any problems quickly.

“A whole universe of possibilities opens up with smart meters,” explained Cañas. The costs of financing the system upgrades and modernization will be financed with the first tranche of a line of credit from the Inter-American Development Bank (IDB) for green energy projects, she said. (The flexible, $500 million line of credit will be used for various projects over the next several years.)

One of the key target areas of the country’s new Decarbonization Plan is the transportation sector. Costa Rica’s green grid makes electric vehicles—and eventually, an electric rail system—particularly attractive.

“We’ve already started the whole recharging infrastructure throughout the country, to be able to ensure that people who have an electric vehicle can charge it in any region of the country,” Cañas said. She estimated that about 70 percent of the “robust network” that will be required is now in place.

ICE, which provides not just electricity but telecommunications, is also supporting efforts to expand digital government services. “That’s a very important part of decarbonization,” Cañas explained, “because if we manage to digitalize most government procedures, people don’t have to travel from one place to the other to do official business”—whether paying a bill at the municipality or doing paperwork at the Ministry of Labor. In a country where traffic congestion is a chronic problem, making more services available online will reduce the need for people to get into their cars and will therefore reduce emissions, Cañas said.

Costa Rica may be a small country, she said, but it is attracting investment in decarbonization solutions and testing new approaches to show that “it is possible to achieve a low-carbon economy.”

“We already have a renewable grid, we’re on our way to more sustainable transportation, and I know that whatever we can test out will be very useful for other countries that have a clear roadmap for decarbonization,” Cañas said.