Government cuts energy consumption and businesses are in alert

We are currently in the most extended dry season that I have experienced in Panama over the last 7 years and it has everyone concerned.  We badly need rain to support our hydro electric plants as our supplemental fossil fuel plants cannot run indefinitely. Here is an article in Panama America

The reservoirs feeding the country’s three major hydroelectric plants approached their minimum level of operation, while the government announced measures to reduce energy consumption and the business sector declared alert.

The situation could lead to energy rationing or blackouts if it doesn’t rain during the next five days in the areas where the reservoirs are. Over 41% of the country’s energy supply depends on hydropower.

After the Empresa de Transmisión Eléctrica (ETESA) suspended the energy exportation, the central government announced measures to cut power consumption by changing the schedule of public workers and reducing the use of air conditioning in the different institutions.

The situation was confirmed yesterday morning by the President of the Republic, Ricardo Martinelli. But the president said it is a momentary thing.

The new schedule for central government workers goes into effect on Monday May 6, and their schedules will be from 7:30 a.m. to 1:30 p.m.

Through the executive Decree 298 it was ordered that all government agencies must turn the air conditioners on an hour after they start their working day and turn them off two hours before the work day is over.

The Presidency Minister, Roberto Henriquez, said the goal of these measures is to reduce the energy consumption of the Government between a 5% and 7% as their first preventive measure. It was also ordered to have all of the neon signs in all government institutions off at the end of the work day. The Government also asked the other branches of government and private enterprises to adopt energy saving measures.

Yesterday, the private sector expressed its concern over the issue, but did not announce measures to reduce the energy demand of the country given the current situation.

“Without energy you cannot sustain the country’s growth,” said Gabriel Diez, president of the National Business Council (Conep).

“We are depending on machines that might stop working at any time when a machine is damaged, repairing it is difficult,” he said.

Merchants argue that the existing problem is due to the lack of new generating plants.

“We see a potential crisis alert, but there is shortage in the thermal campus because the bidding processes have not been done timely and appropriately,” said Fernando Aramburu Porras, member of the Panamanian Association of Business Executives (APEDE).

Last night, the only business association that called for the implementation of energy saving measures was the Chamber of Commerce.

José Luis Ford, president of the group, said “from the private sector, being the largest users of energy, we will support with as many energy conservation measures as possible, within our reach, for the benefit of the country”.

In this sense, Ford urged companies to adopt voluntary arrangements, such as shutdown of neon signs, regulating the temperature of air conditioners and other initiatives to contribute to saving energy and reducing energy consumption in order to prevent blackouts in the future.

“Facing this possibility of power rationing, companies should monitor the correct operation of their plants and ensure these have sufficient fuel for their performance,” said Ford.

The Inter Institutional Energy Committee, formed by many business associations, considered it is essential to promote public policies to provide long-term solutions and increase local and foreign investments in the energy sector.

Ivan Barria, chairman of the Energy Committee of the Chamber of Commerce, said the private company has the ability, through their many emergency power plants, to fill part of this gap.

“But, if we use emergency generating plants, the production costs would be higher, so there must be an incentive offered to those private companies who would activate their emergency plants,” he said.

According to Barria, this problem was predicted by the lack of construction of new plants for the year 2015. However, he said the crisis came in 2013, so there was an error in their forecast.

“I think there has been a lack of planning on buying energy and for the construction of new plants, which had to be built at the rate at which the country is growing,” he added.

Meanwhile, Victor Urrutia, an expert in the energy market, said the problem lies in the ability of the country’s supply.

He stressed that in order to motivate the offer there must be an open and stable scheme, rules must be followed and there must be legal certainty, “because the investments are expensive, but the investor will get involved if he sees a fair chance to compete.”

In the long term, the only solution to the problem is assuring and promoting greater investments, said Urrutia.

“Now we have fallen short in the amount of water in reservoirs, which could affect the reservoirs, and there is the danger that any of these plants could stop working,” he warned.