WSHPDR_2013_Final_Report-updated_version

2.2.7 Nicaragua
Yan Huang, International Center on Small Hydro Power
Key facts
Population 5,727,707 1
Area 130,967 km 2
Climate Tropical in lowlands, cooler in
highlands 1
Topography
Rain pattern
Three major zones: Pacific lowlands,
central mountainous and volcanic
highlands (some volcanoes still
active), and Caribbean lowlands 1
Average annual rainfall is 1,462 mm;
rainy season is from May to October. 2
Electricity sector overview
Nicaragua has an electrification rate of 72 per cent.
The Nicaraguan energy sector was restructured in the
late 1990s. The new electricity Law from April 1998
separated generation, transmission, and distribution
divisions of the state-owned Empresa Nicaragüense de
Electricidad (ENEL). This sector reform initiated
privatization of the generation and distribution
activities. Four electricity generation companies
(GEMOSA, GEOSA, HIDROGESA, and GECSA), one
transmission company Empresa Nacional de
Transmisión Eléctrica S.A., (ENTRESA) and two
distribution companies (DISNORTE and DISSUR) were
created. However, during 1990-2007, the privatization
delayed the promotion of the electric service in rural
areas. A plan was established for this purpose in 2004,
with the creation of the Comisión Nacional de Energía
(CNE).
Nearly 70 per cent of Nicaragua’s electricity needs are
supplied by fossil fuels plants (figure 1). According to
the National Energy Institute (INE), installed electricity
generation capacity in 2011 was 895 MW; 593 MW
thermal (fuel oil and diesel), 98 MW large hydropower,
0.9 MW small hydropower, 63 MW wind power,
36 MW geothermal and 104 MW biomass (sugar cane
bagasse).
Wind
Geothermal
Biomass
Hydro
Thermal
5%
7%
10%
11%
67%
0% 20% 40% 60% 80%
Figure 1 Electricity generation in Nicaragua
Source: National Energy Institute 3
Note: Data from 2011. Thermal includes diesel and
fuel oil.
Small hydropower sector overview and potential
The INE’s annual statistics for 2011 only report
operation and generation of one small hydro plant in
Nicaragua. With an installed capacity of 930 kW and a
head of 119 meter, the ATDER-BL El Bote small
hydropower plant has a reservoir and operates two
Pelton turbines. The plant is connected to the grid.
In addition, according to the Ministry of Energy and
Mining, four other small hydro projects in operation
with a total installed capacity of 1.64 MW and two
other projects under construction with a total capacity
of 1.78 MW can be found in Nicaragua (as of
September 2012).
Based on this information, the total installed small
hydro capacity in Nicaragua is 2.95 MW and the
capacity of small hydro projects under construction is
1.78 MW (figure 2).
SHP installed capacity
SHP potential
2.95 MW
40 MW
0 10 20 30 40 50
Figure 2 Small hydropower capacities in Nicaragua
The programme Usos Productivos de la
Hidroelectricidad a Pequeña Escala aims to improve
living conditions in rural areas through improved
income generation based on hydropower. As part of
the Global Environment Facility Project Development
Fund Block B grant, several preparatory studies have
been carried out by NGOs and consultancy companies.
Among them is a reconnaissance study which
identified 30 potential hydropower projects ranging
from 150 kW to 1.5 MW and totalling some 11 MW.
The financing required to implement the entire
programme is estimated to amount to about US$30
million. 4 5
Within the UNDP project NIC/02/G31, the
Development of Small-scale Hydropower for
Productive Use in Off-grid Areas, a small hydropower
potential of 40 MW has been identified for Nicaragua,
for stand-alone projects in rural areas. 6
The value chain of small hydropower in Nicaragua is
only developed to cover services in maintenance and
operations; and in engineering. 7
Renewable energy policy
Nicaragua provides investors of clean energy with
fairly attractive tariffs in retail and power markets. 7 In
2005 a regulatory framework relating to the energy
market was put into place, aiming to reduce oil and
diesel dependency and adding power capacity by 700
MW via power purchase agreements scheduled over
the coming 10 years. 7
The Nicaraguan Government provides its investors
with tax based incentives such as income tax and
import duty tariffs to support the implementation of
clean energy. Furthermore local micro finance
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