Nicaragua Plans to Reduce Dependence on Oil-based Energy
Few decades ago the share of renewable energy in Nicaragua’s power generation was 70 percent but with growing ties with Venezuela and availability of cheap oil that number declined and now the country gets just 34 percent of its energy from renewable sources. But with the rising oil prices and increasing blackouts the government now seems to be falling back on the locally available and reliable renewable energy sources.
Having close diplomatic relations with Venezuela assured Nicaragua of sufficient oil supply for years but with oil peaking to $147 it became more and more difficult to shoulder the burden of rising energy costs. Although oil-based energy was cheaper than the energy produced from non-conventional sources, the fluctuation in oil prices started hurting the economy of the nation. The government of Nicaragua soon realised that oil-based energy sector is not sustainable in the given circumstances.
Nicaragua, one of the poorest countries in the western hemisphere, is blessed with a wide variety of renewable energy sources – wind, geothermal and hydel energy. The government is now looking to attarct foreign investors to help it develop projects which could eventually reduce the country’s dependence on oil for power generation to a mere 3 percent.
Russia, Iran and Brazil have come forward to invest in renewable energy projects in Nicaragua. A private capital firm, Arctas Capital Group, has invested in a $90 million wind energy project which will start generating 40 megawatts of energy from January. Nicaragua has six active volcanoes and therefore also experiences substantial amount of geothermal activity which it plans to tap through a 250 megawatt project to be build with the help of Russia.
For years the governments of Nicaragua ignored the vast reserves of renewable sources present in their country and increased their dependence on foreign oil as oil-based power plants were cheaper and easy to build but as the oil prices rose to unprecedented levels the already battered economy of Nicaragua seemed to give way. Now the government has set an ambitious but achievable goal of getting rid of costly foreign oil and building a predominantly renewable energy based economy. Other nations need to take the cue and look to utilize the locally available renewable energy sources as it would not only help build a cleaner environment but also build a stronger economy.
This article was first posted on Red, Green and Blue.