Panama Member Committee

Dr. Gonzalez graduated from the Technological University of Panama where she obtained a bachelor's degree in Electromechanical Engineering and has a PhD in Electrical Engineering from Texas A & M University, USA. Since 2011, she has been Assistant Professor at the Department of Electrical Engineering of the Technological University of Panama (UTP), where she is also Director of the SMARTS-E Research Program. Dr. Gonzalez has published multiple articles in indexed journals and has given conferences at the national and regional levels. Her areas of interest include: energy planning, smart cities, sustainable engineering, design and control of electrical machines, power electronics, renewable energy systems and modeling of energy systems.

In addition to her work at the UTP, Dr. Gonzalez is a member of scientific associations such as the Panamanian Association for the Advancement of Science (APANAC), or the IEEE where she is a Senior Member and has volunteered in different high-level positions within the Panama Section. For her work on the IEEE Power and Energy Society and Women in Engineering in Latin America and Panama, she was one of the recipients of the 2016 IEEE MGA Achievement Award and the 2016 IEEE Panama Section’s Manuel Lopez Spla Award. Finally, since 2018, Dr. Gonzalez is Executive Assistant and Representative of the Academia in the Board of Directors of The World Energy Council’s Panama Chapter.

Energy in Panama

panama, critical uncertainties, action priorities

Three critical uncertainties highlighted in the 2019 Issues Monitor of Panama are (i) corruption, (ii) the introduction of LNG in the generation matrix and (iii) the impact of diplomatic and commercial relations with the Peoples Republic of China (PRC). Unfortunately, corruption is still a topic that causes discomfort among Panamanians. After the international scandal of the “Panama papers” and the revelation of several acts of corruption by members of the past governments, there is a feeling of mistrust on the current government; consequently, affecting the execution of high-profile projects. Another important issue is LNG. Even though Panama is not a gas producer, the country can import it and is benefiting from LNG trade due to the expansion of the Panama Canal. Panama is currently betting on various LNG-related projects, starting on several electric power plants and aims to be the hub for distributing LNG to other countries of the region. Laws governing this issue are still being debated in the National Assembly. Finally, new diplomatic and strengthening of commercial relationships with China are of great concern. The government has signed several treaties, commercial agreements and memorandums of understanding with China, and it is unclear how the set of treaties and agreements will impact the country and the costs of the new projects to be built under such agreements.

Action priorities highlighted in the Issues Monitor include: (i) innovative transport, (ii) energy efficiency and (iii) electricity prices. Currently, the energy efficiency aspect is the most advanced stage in terms of the development of policy and regulations, even though implementation is still undergoing. Innovative transportation is still at the early stages. Dialogue involving academia, private and public sector is undergoing, to create a framework that allows an integration of policy, regulations and implementation of the new electric-based technologies. Finally, the cost of Energy Transition and disruptive technologies needs to be assessed, including the changing the role of the consumer to become a prosumer, as well as the introduction of more renewable energies to the bulk energy system. These developments have brought challenges on how to set fair electricity prices. Members of the electricity sector are asking regulators for a set of clear policies.

According to the Global Competitive Index 2017-2018 of the World Economic Forum, Panama is still one of the 50 most competitive countries worldwide. However, corruption is one of the critical issues. Panama scored 37 points out of 100 on the 2017 Corruption Perceptions Index reported by Transparency International [1]. Unfortunately, the energy sector does not escape the public perception that some aspects of its management and actions, specially at the state-owned transmission company, have doubtful or unsound reasoning. Nevertheless, this has not been proven and, at most, poor decisions by the past administration are to blame for delays and cost overruns of major projects led by said entity.

LNG may become a major driver for the economy of Panama. Part of the reasons are the possibility of the expanded Panama Canal of handling super-sized LNG tankers which can now navigate from the East Coast of the United States to the West Coast of North and South America, and even Asia. Panama could therefore become a natural gas hub for the area. LNG also has become a topic of interest for the energy sector, due to the starting operations of one natural gas fired power plant and plans for two additional power plants with commercial operation dates due in 2020 and 2023. This creates uncertainty in the electricity generation business, due to the excess of contracted capacity of one single power source.

In 2018, Panama openly started diplomatic relationships with the People´s Republic of China. It also signed several treaties, agreements and initiatives for projects. Moreover, the government is envisioning various infrastructure projects in part arising from the initiatives of the PRC and PRC based companies. This is creating uncertainty about the commitment of the government to projects and the feasibility of said projects.

Panama has historically had a close diplomatic and trade relationship with the United States of America. Trade into and from the USA is the main purpose of use of the Panama Canal. Due to the looming trade war between the US and China, and the reaction of the US government to China’s increasing trading in the region, there is significant uncertainty in Latin America and Panama on the effects of US policies and actions. Panama does not have fossil fuel sources of refining capacity of its own; therefore, its dependency of importing fuel for transportation is always a topic of discussion due to the price variation and costs of fuels, dependent on the international market. Public transportation is an issue leading to most of the Panamanians having their own vehicles, creating terrible traffic jams into and in Panama City. Various innovative transport alternatives have been implemented, from constructing a rapid transit system (Panama Metro) to promoting the introduction of hybrid and electric transportation. However, a regulatory framework is needed for the introduction of other energy sources for transportation. Said framework is currently under study.

Energy Efficiency is one of the key issues on which the National Secretary of Energy has been focusing on since the launch of the UREE law in 2012. Various policy and regulatory frameworks have been studied and established. However, the implementation of rational use programs is still underway. Educational campaigns on energy efficiency have been introduced in schools and to society through different media. Changes in the market on selling residential equipment to more efficient ones have been evident during the last couple of years. More complex projects such as the Guide for Sustainable Construction and Energy Efficient Labelling are pending proper governmental issuance.

Electricity prices is always of concern for Panamanians. This year, there was an uproar due to the government announcing an increase in the electricity prices for the end users of approximately 8%, mainly to cover for additional costs related to delays of the third transmission line. New bulk energy projects, as well as the expansion of the transmission lines and change in paradigm at the distributed level (distributed generation) are of concern in terms of electricity prices.

Panama is an emerging country characterised by its economic growth, which is still recognized as one of the best of the Latin American region. Nevertheless, Panama is still affected by corruption and the lack of government transparency, although efforts are underway to amend this by digitalising government processes.

Panama seems to be adapting to global trends, including the introduction of technologies such as LNG, renewable energies, and the inclusion of innovative transportation and energy efficiency systems. The challenge lies in how to achieve a fair but competitive market for the conventional technologies and the new ones.

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