Renewable energy in Panama

Introduction:

Panama is blessed with an abundance of sunshine and rain, allowing it to entertain renewable energy sources as the sole source of it’s electric supply.  Nonetheless, it continues to depend on a couple of carbon-based plants for its electrical demands, and the local energy authorities are under fire for proposed taxes and charges on solar power producers.

In late May, the headlines regarding the ASEP decision were all along these lines:  “While the rest of the world looks to consume and produce clean energy, the Panamanian Government – through ASEP – is trying to PUNISH anyone who installs solar panels or other clean energy generators in their homes or businesses.”  

Mientras el mundo apunta al mayor consumo y producción de ENERGÍAS LIMPIAS, en Panamá el Gobierno Nacional —a través de la ASEP— busca CASTIGAR a las personas que instalen paneles solares u otros generadores de energías limpias en sus hogares o negocios. #COMPARTEpic.twitter.com/JR0sC2bzgd

— ClaraMENTE (@ClaraMENTE507) May 26, 2018

At the beginning of June, ASEP opened the dialogue, indicating that they did not intend to penalise those who had solar panels for personal consumption, but that they were looking to ensure that anyone that was connected to the electrical network and infrastructure was paying appropriately for the infrastructure, and not simply getting a free ride simply because they principally had solar panels or other self-generating systems.  There was also criticism because of the pricing suggested out the outset for those who were generating more than they needed and were feeding this excess into the general network.  This ignores, in part, that since February of 2017, Panama has had its first commercial solar power plant “Central Fotovoltaica Bugaba“.

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The National Energy Plan – 2015-2050

In April 2015, the Panamanian Government published the 2015-2050 National Energy Plan which sought to place a new focus on solar and wind sources, rather than the traditional sources of hydro and carbon generators.  By 2050 it is hoped that Panama will rely, 70% on renewable energy (primarily wind & solar).  The move away from hydroelectric power comes after serious confrontations with indigenous groups and communities over the devastation and changes to the ecosystem.

For example, if you have a quick look at the following video, you can appreciate the Tabasará river during a normal rainy season (before the hydroelectric plant was built).

The two videos that follow are during the construction of the power plant on the Tabasará river, where you can appreciate the devastation down-river to the entire ecosystem and the change that this has generated for all of the communities that depend on the river.  Obviously, the videos of the construction are during the dry season, rather than rainy season (so it is no longer a raging river in full flood), but as you will see in the second video, the communities downstream from the project were left with almost stagnant water.

The communities also denounced and complained that they were being displaced from their homes and communities. Obviously, this had economic repercussions for these communities, as they lose their farm lands.  Even those who previously used the river for rafting and outdoor adventures during the dry season have said that they have totally closed down the Tabasará option and have had to find other rivers for rafting and adventure.

In a similar manner, Nata & Aguadulce were left without a drinking water supply when the local hydroelectric plant shut off their access to water during the summer of 2016, because the 2015 rains were not enough to fill up all of the reserves.

Support for private solar panels

In 2016, the ASEP took steps to support and promote solar panels in homes and projects.  At this time, ASEP promised users that they could reduce their consumption by 50% or even up to 100% through the installation of solar panels on the roofs of their homes or businesses.  Nevertheless, there were requirements for this, which involved the local electric companies:

  1. approval by the competent authorities (fire brigade, city council)
  2. design of the system and technical details regarding output and capacity, and all of this with
  3. a letter to the electric distribution company, requesting the installation of a bi-directional metre.

The electric company was then to install the bi-directional metre, (not to be charged to the consumer) which would compensate the output and input, measuring the net usage of the client of electricity and that produced by their system.  In these cases, the homes were not installing batteries or storage units, as the excess of their production was pushed back into the system for usage by others in the network, and then they consumed electricity when their solar system was not producing.  These were not stand-alone or self-sufficient units.

Regulation of self-production

Later in 2016, the ASEP informed that it might consider a limit of 500kW for residential production of solar power and then (after consulting the public and users) notified that it would not be doing so, but rather it would be leaving that to each homeowner to decide what production and consumption they required.

Is it really worth it?

Costs in 2016-2017 were still prohibitive – for a home consuming 500kW hours/month, the cost of installation would be approximately $9,800.00, which meant that the investment would be paid off in about 7-8 years. In 2018 we see the costs for a home consuming 400kW hours/month having installation costs of $4-5,000, almost half of the cost for 2016!  However, as many of those living in Panama know, our electric bills are quite high, so as those costs of installation come down (which they have over the past 24 months), solar power becomes more attractive as a residential alternative.  This is especially the case with those companies that are providing a 25-year guarantee on their panels!

Throughout 2017, ASEP continued to promote solar power for residential use, touting the benefits of being able to hook into the distribution system and get paid for any over-production.  And so we now (Feb 2018) find Provivienda (one of Panama’s real estate developers) offering a subdivision in Arraijan in which all homes come with their solar panels installed and connected to the system. This subdivision is expected to be completely self-sufficient to the needs of each home.

The regulations provide that where the consumer is using no more than they are producing (and supplying into the network), then there is no charge to them. Where their solar plant provides more electricity than what they have consumed, then they can expect to receive a payment from the electric company for up to 25% of their consumption (but no more).  So, for example – you produce 500kW/hours, but you only consume 400 – you will get paid on that 20% extra that you produced.  You consume 500kw/hour and you only produced 400 – you will have to pay the electric company for the consumption!

Commercial projects:

Smaller companies have already begun to invest in solar power plants, for commercial purposes, such as “Central Fotovoltaica Bugaba“.  2017 say some 72.4MW come online and 2018 some 78.8MW are expected to receive their commercial licenses and approvals for production.  For 2019-2021, a further 200MW have provisional licenses to build and come online.  There are already mini solar plants in Azuero, Llano Sánchez and Chiriqui.  If with all of these projects, they generate the estimated 383MW (with an investment of $422M over this period 2017-2021), this would be more than the production of Fortuna (which produces 300MW and is the largest in Panama so far).  The issue for Panama is the rainy season, because this brings down production to almost 20-40%, with a higher production during the dry season.  Therefore, most of the solar farms are located in the “arco seco” – the “dry arch” – in the Azuero Peninsula.

Wind Farms

Anyone who has driven out to Penonome from Panama City has appreciated the wind farm on the left-hand side of the highway.  As of March 2018, construction of a second windfarm in Cocle is under way, this one in Taobré.  This wind farm will have 20 Vestas turbines and 2 substations, and is expected to be built in 22 months.

Changes in Public Bids

Roll forward to February 2018 – and the ASEP announces that all bids for energy projects “from now on” will be on an equal footing – with no special exceptions being given for clean energy.  That means that the gas / thermo plants (such as those in Colon) will be competing cheek-to-cheek with solar and wind farms.  It would seem that this gives the thermo/carbon/gas projects an upper-hand as they are less capital intensive.  But the ASEP assures that this is not the case, because they will have to quantify and provide a bond covering the possibilities of contamination. So, while a solar plant will have a low contamination factor, the gas or thermo plants will have to adjust theirs costs to include for accidents and liabilities.

And then…

Roll forward to May 27, 2018, and everyone is in an uproar because it seems that ASEP now wants to start TAXING residences and businesses that have installed solar panels (connected into the system and producing energy for the system). On May 27th, they indicate that they are considering an “additional charge” to anyone that has solar panels on their home or business.  However, they didn’t go into what this “additional charge” was, which caused a massive back-lash as I mentioned at the very beginning of this article.

Given the reaction from the public and from conservation groups, ASEP took a step back, defending itself with “you didn’t understand what I said”.  They never did quite clarify what it was that they had said!  On the 1st of June, this then rolled into “we are not going to make any decisions on this until we have reached a consensus with all of the parties involved”.

Eventually, what came out was the following explanation:  if you have solar panels and are self-sufficient but you are still connected to the network, the distributor must have available at any and all times enough electricity for your home/business.  So, let’s say you need 400kW hours/month – they must produce enough for that.  But, since you have your solar panels, you aren’t actually using it and are not paying for it.  They want to charge for having it available to you, but you not using it!

Putting a tax on the sun

The reaction from some of the players (particularly owners of companies installing solar panels) was that the government was looking to put a tax on the sun!  Others point out that this clearly is a dis-incentive towards clean energy and favors the production of cheap oil/gas-based thermo electricity, rather than making the long-term investment into solar panels and self-production.  If the government wants private persons and companies to make the capital investment into solar power, then they cannot consider putting an additional tax on it.

The ASEP justifies their proposal as being simply a charge on those who are producing energy and pumping it into the network (and getting paid by the electric company for this).  But that’s not what they said they were going to tax. I’m still waiting for the dust to settle (maybe after the world cup fever has subsided next week), to find out what ASEP has really decided or whether the “let’s reach a consensus” is underway.

Reaching Utopia

With a new Metro line being finished in 2019, more electricity will be needed to run that! More buildings = more air-conditioners running. In a country in which 35% of the electricity goes towards air-conditioning, maybe it’s time for Panama to look not only at how it produces electricity, but how it can reduce wastage or improve geothermal covering of buildings to harness the energy!

Maybe it’s time to explore alternative options like turbines that create electricity simply from moving traffic (of course, that would mean that Panama’s traffic would need to move!).
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There are few voices (and even less articles) discussing the alternatives for the central business district, hotels and banks to contribute to the solution to the needs over the coming years.

  • There are many options for windows on buildings to generate electricity through special coverings.
  • There are green buildings, which are growing more plants to battle CO2 emissions.
  • There are options for paint and finishing on buildings which will assist in making them cooler and not using as much electricity and air-conditioning.

But there is so much to learn and there are no tax incentives for businesses to make these capital expenditures on long-term returns.

If there are less than 250 residences in all of Panama (in 2018) with solar panels, can I really expect that people will be forward thinking about what we need to do in order to work towards a solution?

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Education in Panama – hopes and dreams

Last week was the first week of school for public schools in Panama.  Universities typically finished their “summer holidays” at the end of January, but primary and secondary schools still have a three month summer vacation.

And after seeing headlines in Panama in late February, I’ve been asking myself: What has happened during these three months of school holidays? What efforts are made to ensure that when students return in the new year, the teachers will be better equipped as well as the schools in a better state?  And what can we do differently?

Panamá Bilingüe:

I was stunned by the news a few weeks ago that of 5,200 teachers sent abroad to study, only 1.5% (70) teachers were “certified”. Of course, it turns out that headlines sell newspapers, but don’t tell you the whole story!

During these summer months, about 1,000 Panamanian teachers and 500 students traveled from Panama to the US, England, Canada and Barbados for full immersion English classes through the program “Panamá Bilingüe”.  The Panamá Bilingüe program has a budget of over 100 million dollars for the five year period it is intended to run, and costs about $8,000 – $12,000 per teacher for training, airfares and accommodation costs.

When this program started in 2015, it was slated to be the beginning of a new era of education in Panama.  Unfortunately, if you look at the quality of the translation on the President’s website, you may be forgiven for thinking there’s not much hope for the future if this is the best that can be done for the President!

During the 5 year program (2015 to 2020), some 10,000 teachers are slated to receive instruction both in English and educational classes to improve the quality of the education received in Panama in public schools and at public universities.  A further 20,000 high school students and 30,000 primary school students are expected to also benefit from this program.

Teacher Training:

  1. national – before they are given any opportunity to study abroad, all expenses paid, the selected teachers are given training in Panama, in order to reach a certain level in English (Private & Public).  They are then given an exam (such as TOEFL or Cambridge) to see the level of their English before they go.
  2. international – 10,000 are being sent overseas. They will not only study English, some will also be studying in science and Education. Of these 10,000 teachers that are slated to go overseas before 2020, 5,200 have already completed the training internationally.  When they are sent overseas, they are expected to work (side-by-side) with teachers internationally (some 25-35 hours per week), as well as study at their designated University.

Unfortunately, the initial (and badly explained) results that came in February 2018 were not very promising. Of the 5,200 teachers who have traveled internationally so far in this program, only 70 (1.5%) have  obtained the Cambridge certification in English. However, what was important to note is that the certification in question was a certification to become examiners in Panama of students in English (i.e. it was not whether they had attained or not a proficiency in English, but whether they had a proficiency and the additional certification to be an examiner in Panama).  Five hundred teachers volunteered to participate in the courses for certification, of these 389 have a level of proficiency that are certified, and 70 have actually received the Cambridge certification as examiners.  So, while it sounds terrible that only 70 of 5,200 got certified, I had to read more to understand what they were getting certified in. Not half as bad as the headlines sounded!

In the explanations given by the Ministry of Education, they indicate that in terms of the English levels of the 5,000 teachers sent overseas to study, only 5% have completely failed to reach the levels of proficiency required (according to where they are at the time they start the course), and in these cases the teachers involved will be required to pay back the cost of the studies from their salaries.

What does concern me, however, is that the minimum level required is High Intermediate English. This means that the English teachers in our primary and secondary schools is possibly only Intermediate English.  These are not teachers who are speaking fluent English. So, if they are at intermediate level, how will our high school students reach anything higher than just intermediate?

Kids program:

In addition to the training for teachers, Panamá Bilingüe also offers classes for kids.  And this is for kids all around the country, not just in Panama City. Some of the kids will be from different regions, such as the Guna in San Blas, the Ngobe in the Ngöbe comarca between Chiriqui and Bocas del Toro. Of the 13,000 that started in the program, some 8000 children that have been participating in Panamá Bilingüe for the first three years were tested and 82% have reached Intermediate Level (as gauged by the TOEFL exams).

School buildings: Gazebo schools

Of the 1,080 gazebo schools (escuelas ranchos) found to exist in July 2014, the Ministry of Education has only been able to replace 504 so far with school buildings (some still under construction).  As expected, this project is taking longer and costing more than the current administration anticipated: they are half way there with only little more than a year left before elections (5 year term).

Although the numbers mention 1,080 “schools”, this really means buildings or class rooms, rather than the entire school.  So, for example, in 2018 they are undertaking 16 projects for 69 properties, which will eliminate 209 gazebo schools.  The new school properties will include dormitories for the teachers (as some are in remote areas), as well as play courts (with roofs) which can be used for assemblies as well as for exercise and gym class.

One of the biggest difficulties being faced is the remoteness and access of the regions where these gazebo schools exist.  Many contractors are not interested in bidding for the projects in these areas, because of the transportation issues (materials as well as workers).  So, the Ministry of Education puts out the details of the public bid, and no one responds.  And the Panamanian Ministry of Education does not seem to have its own maintenance and building division for these particular cases.

In these regions, the debate continues to be over school buildings, with no debate being entered into regarding the quality of the education that these children are receiving.

How do we combat poverty in these regions without any infrastructure to speak of?

Public Schools not ready

In addition to the issue of Gazebo schools, which is gradually being addressed and faced, every start of the school year, we hear of schools that simply are not opening for the first day of school because basic maintenance work has not been done.  So, for example, on March 5th we read that some 20 public schools were not ready and a further 32 schools were opening, but with either infrastructure issues or not having enough teachers.

Of these 20 schools, 10 are simply not opening and ready, and a further 10 are using alternative properties for the school year while their schools are being maintained. Once again, we’re talking about whether there WILL be any education, not what the quality of that education will be!

What makes for a first world education system?

When we look at the question of education, obviously these are very basic issues that Panama is facing.  Quite unlike the kinds of issues that you would face in say New Zealand or the Netherlands. Panama says that it aspires to be like Singapore, and yet Singapore often comes out as the best education worldwide!   If we look at the World Education Rankings, Panama doesn’t even make it onto the graph! Even the articles that criticize the US education system, providing graphs that include our neighbors Costa Rica and Colombia, completely ignore the existence of Panama.

How did (or does) Singapore make it to the top? For starters, education spending makes up about 20% of the annual national budget! Yes, you read that right: TWENTY percent.  Panama spends only 3.5% of its budget on education!  We get what we pay for!

English is the first language in the education system (since the 1960s), meaning that all children are fully bilingual, usually reaching fluency in primary school.  Admittedly, during the 1950s and 1960s, Singapore adapted their “survival driven” system into one which could provide a skilled workforce for their industrialization. They have also adopted the requirement that throughout primary and secondary school, all children must participate in one after school program (performing arts, clubs, sports, etc.).  Maybe these children aren’t perfectly well-rounded, but they are at least socialised and with some leadership skills.

Upon completion of secondary school, Singapore offers vocational education (since 1992), Polytechnics and Arts Institutions, Junior Colleges (2 years, pre-University), and Universities.  It also offers other alternatives, and encourages students to pursue further studies even after completing their Polytechnics or vocational training.

This strong focus on education in Singapore should be a shining example to Panama, as like Singapore, we lack natural resources (other than the Canal) and we need to develop our human resources and manpower to build a knowledge-based economy.  Obviously, there’s a lot more we could look at in Singapore’s system: meritocracy, investment and the priority that it has been given.