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The next 'revolution' for Nicaragua: energy independence

Oil dependent Nicaragua is battling high energy costs and trying to build a sustainable economy by focusing on wind, hydroelectric, and geothermal.

Nicaragua may be rich in resources, with abundant rivers, lakes, volcanoes, and wind-swept plains, but it built its economy on being a gas-guzzler. 聽Now, the government is reevaluating its approach, trying to wean Nicaragua off its dependence on foreign oil and becoming a leader in sustainable development along the way.

Renewable energy is not only nature-friendly; some believe it鈥檚 imperative to Nicaragua鈥檚 survival.聽 Oil accounts for 70 percent of the country鈥檚 power generation, which means the economy takes a kick every time international petroleum prices soar. And despite having the poorest economy in Central America, Nicaragua has the highest energy costs. Years of energy shortages debilitated the country, as its power grid aged and energy plants were unable to meet demand.聽 Daily power-rationing blackouts lasting 6-10 hours were the norm in 2006, but in 2007 things began to change when the Sandinista government, led by Daniel Ortega, returned to power.

Switching to renewable energy has become a linchpin in the Sandinistas' national development plan.聽

鈥淭he energy issue is an essential component for our sustainable development to assure the wellbeing and progress of the current and future generations,鈥 says Emilio Rappaccioli, Nicaragua鈥檚 minister of energy and mines.

Ortega worked with Nicaragua鈥檚 private sector and Venezuela鈥檚 Hugo Ch谩vez to fix its immediate energy problem by installing an additional capacity of 343 megawatts of power 鈥 41 percent more power than Nicaragua was producing five years ago.

That means that for the first time in more than a decade, Nicaragua is producing a comfortable surplus of energy.聽 But electricity costs remain high, and 80 percent of households receive an electricity subsidy, according to the government.聽 Electricity rates rose by another 9 percent on Jan. 5, forcing the government to petition for further funding from the Bolivarian Alternative for the Americas (ALBA) alliance, which consists of members like Venezuela and Cuba, to pay for continued subsidies.

The Sandinistas' focus on renewable energy will not only reduce dependence on foreign oil, but will help bring electrification, development and progress to the countryside.聽 Administration officials say it will do so in a way that protects the environment, by deterring deforestation and reducing harmful emissions.

鈥淭his is about the conservation of natural resources, assuring energy security policies and ensuring the competitiveness of the country,鈥 Mr. Rappaccioli says.

Presidential adviser Paul Oquist, an academic and leading voice on Sandinista development policy, says that renewable energy policy is key to providing citizen security, labor stability, peace and development in the country.

鈥淲ho is going to invest in a country without energy?鈥 asks Mr. Oquist.

The switch from black to green

Although Nicaragua鈥檚 growing energy production has come mostly through the smoking stacks of eight fuel-burning power plants from Venezuela, the 聽renewable revolution has already started.

Geothermal production has increased and Nicaragua has started experimenting with wind-energy.聽 The privately owned Amayo I and II wind farms are now producing 63 megawatts of power for the country.

By the end of 2012 鈥 what the United Nations is calling the 鈥淵ear of Sustainable Energy for All鈥 鈥 Nicaragua hopes to reduce its dependency on foreign oil by an additional 10 percent, closing out the year with an energy matrix that is 40 percent renewable based on hydroelectric, geothermal, wind, and biomass sources. 聽The goal is to generate 94 percent of its own electricity from renewable resources by 2016, through the help of a new hydroelectric plant that is expected to generate half of the country鈥檚 total energy demand.

If these goals are indeed met, it would mean that in the coming five years, Nicaragua could go from being the most oil-dependent nation in Central America, to the least. 聽And in a window of 10 years, Nicaragua鈥檚 energy sector could transform into an international leader in renewable technologies.

National development

Nicaragua鈥檚 push for a renewable energy revolution has united the country like few other issues, and has people thinking in terms of long-term national development, perhaps for the first time in the country鈥檚 history.

鈥淭his is one of the few issues in Nicaragua that has a clear long-term national vision,鈥 Iv谩n Cortes, director of Renewable Resources for the Ministry of Energy and Mines, tells the Monitor. 鈥淲e have suffered personally the effects of the severe energy crisis, and that鈥檚 why the whole population supports renewable energy.鈥

The Sandinistas鈥 efforts to switch to renewable energy has also drawn nods of approval from the international community, at a time when many foreign governments are questioning the Ortega administration鈥檚 other political choices.

鈥淚n keeping with United States international policies and goals, the US government recognizes ambitious efforts in Nicaragua to address climate change by radically shifting its electricity generation from petroleum-based to renewable sources within a short window of time,鈥 says William Cobb, the US embassy鈥檚 energy and environment officer.

鈥淚 don鈥檛 know of any other country in the world that has done this,鈥 Oquist says, referring to Nicaragua鈥檚 planned 70 percent reduction in oil dependency in slightly more than seven years. 鈥淵ou must recall that this is taking place in the second-poorest country in Latin America and amid the worst financial, economic, social, and increasingly political crisis of world capitalism since the Great Depression of the 1930s.鈥

鈥 A version of this story ran on the author's site, .

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