Selected projects will secure five-year power purchase agreements and will have to begin commercial operation on January 1.

Panama is holding the auction because of the effects of Covid-19 on its power system.

The government of Panama has outlined the rules for a renewable energy auction to be held next month. Resolution MIPRE-2020-0015448 was published in the nation’s official journal.

Under the terms of the procurement round, selected projects will have to begin commercial operation on January 1 and will be awarded five-year power purchase agreements by state-owned utility Empresa de Transmision Electrica S.A. (ETESA).

The National Secretariat of Energy said the auction was necessary as Covid-19 had affected the development of generation projects and the national electricity market in a way that “could compromise the firm capacity of our generation matrix to guarantee the security of short-term supply, especially in certain scenarios of low hydrology.

ETESA is expected to define the final bidding rules for the procurement exercise over the coming weeks.

Panama had 242 MW of solar generation capacity at the end of 2019, according to the International Renewable Energy Agency, with 87 MW having been added last year. The National Authority of Public Services said the country had around 500 MW of solar projects under development at the end of July last year.

Some 1.8 GW of hydropower projects and 1.2 GW of thermal power plants supply most of the nation’s 3.5 GW of generation capacity.
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