The Central American Power System: Achievements, Challenges, and Opportunities for a Green Transition

Abstract

Over the past few decades, Central American countries have seen a steady increase in their energy needs. Luckily, the region has abundant renewable energy resources and, as a result, has been busy constructing wind and photovoltaic power facilities. However, while these renewable sources are promising, they come with some risks—mainly, their variable power generation can pose a challenge to the interconnected regional system. This paper explores the current state of the Central American power system and the obstacles it faces as it strives to transition to a more environmentally-friendly energy system. To do so, the authors employed power flow analysis and transient stability studies, which were conducted using ETAP (Electrical Transient Analyzer Program) to model and simulate the power system. Their study revealed that the Central American power system is at risk of instability, and they suggest that integrating ancillary services and storage solutions could strengthen its resilience. Additionally, the authors advocate for the development of microgrids, energy management, and sustainable decarbonization plans. Lastly, the authors emphasize the importance of short-, medium-, and long-term power planning to make better decisions.

1. Introduction

Developing a country’s energy sector requires more than just technology. Internal politics, geopolitics, social acceptance, history, power sector structure, and stakeholders must be considered when promoting innovation and developing new energy policies. In Central America, the power infrastructure of Guatemala, Honduras, El Salvador, Nicaragua, Costa Rica, and Panama are interconnected through a regional power market and dedicated transmission line, meaning policies adopted in one country can affect others. Coordination between local and regional planning is managed through different institutions, which have been established organically over time. Understanding the Central American power sector requires proper context.

As stated in [1], Latin America must invest up to approximately 100 billion USD by 2100 to support the regional infrastructure for renewable energy deployments. Many other countries share the green and sustainable transition task. For instance, despite the high dependence on fossil fuels, Australia has achieved a model of transition of the energy system, promoting it towards more renewable resources. In the same way, China has set goals to be a green economy and resilient, as indicated in [2,3]. A green transition in the Central America region requires introducing novel policies and technology to consider all the region’s power sector dimensions.

The Central American power sector is a topic that has not been extensively covered in the literature. Only a few published references have been found regarding the unique characteristics and challenges that the region faces. For example, Rios et al. in [4] discuss the development of a regional transmission code that considers topics related to open access to the Regional Transmission Grid, transmission rights, transmission use of system charges, regional grid planning, risk investments in transmission, interfaces with the countries’ transmission regulations, the definition of the regional transmission grid, and security criteria and rules. Meza in [5] provided an overview of the power generation scenario in Central America in 2014 and its trends. This document highlights the need for private sector participation and the willingness of Central American countries to move away from oil-fired power generation.

Suffian and Sing in [6] present a more recent study that examines the potential benefits of cooperative economic dispatch between the countries of Central America connected by the SIEPAC transmission line. The analysis suggests that such coordination could save 9 billion USD annually in electricity supply costs, reduce carbon dioxide emissions by 8%, and lead to environmental benefits such as reduced new plant construction and improved air quality. Nevertheless, this work only focused on the Central American Power grid’s economic aspect, not considering other factors such as the network’s reliability.

Some other authors analyzed only sections of the Central American power sector. For instance, Pardo et al. in [7] provide an overview of the Electricity Control Centers (ECC) in El Salvador and Nicaragua and examines their organizational and operational functions in the context of the Electricity Industry Reforms. This work outlines a novel operational model of both ECCs in El Salvador and Nicaragua, which can represent the operational information’s flow and processing. The model covers the relationships with external market agents, the internal information flow, and the functional changes under various demands. In [8], Perez et al. present a voltage stability assessment of the Salvadorian power system, focusing on the MW margin to guarantee voltage stability in the system. The document also presents a reactive power reserve monitoring methodology based on the WECC voltage stability criteria and an under-voltage load-shedding strategy. Document [9] discusses the deployment of Phasor Measurement and Control Units (PMCUs) in the Guatemalan power system. It also presents a modal analysis-based scheme that identifies unstable operating conditions and opens the interconnection with El Salvador to maintain system stability. The scheme is based on time-synchronized measurements of active power and modal analysis of the active power flow of the interconnection between Guatemala and El Salvador. The main contribution of this document is the development of a modal analysis-based scheme that can detect unstable operating conditions and open the interconnection with El Salvador to maintain the stability of the power system. The analysis and results presented in [10] are quite interesting, given that they highlight the photovoltaic generation’s effect on the Honduran power grid. More specifically, this paper presents the impact of photovoltaic power plants installed in Honduras on the power grid and data on the power system operation during a solar eclipse. It also presents data on the next solar eclipses that will be observed in the area. The main contribution of this document is that it highlights the impact of solar eclipses on the Honduran power grid, as well as the increasing number of PV plants in the country, which has led to the installation of 409 MW of PV power, equivalent to 17% of installed generation capacity.

The present paper provides an up-to-date and comprehensive analysis of the whole Central American power sector by presenting an overview of the current electrical situation in the region, the generation and transmission status, and the general aspects of the Regional Electricity Market. Moreover, a Central American power system model is developed using data from the transmission lines, transformers, power generators, and other elements of all the Central American power utilities. This model allows for analyzing the power transmission system’s weaknesses and potential storage solutions. The paper proposes solutions and opportunities to improve the regional infrastructure for renewable energy deployments. Additionally, this manuscript provides an analysis of the power sector with a focus on national issues and circumstances and describes the technical features of the Central American power systems. Historical events are presented in which the power system was close to instability, and one instance resulted in blackouts in the region. The paper identifies mid-term challenges and opportunities and proposes solutions and opportunities to improve the regional electricity market. Overall, this paper emphasizes the region’s challenges for a green transition and highlights the Central American power system’s main accomplishments, challenges, and opportunities.

This article is structured as follows: Section 2 presents the Central American Power System situation. A special event in which a failure in one country originated a blackout in a different one is presented in Section 3. Section 4 presents an analysis identifying the mid-term main challenges and opportunities. Finally, the conclusions are shown in Section 5.

2. Central American Situation

Central America, which includes Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, and Panama, is depicted in Figure 1. This area covers approximately 498,533 ${\mathrm{km}}^2$ and is home to around 50.33 million people, as reported by the Economic Commission for Latin America and the Caribbean (CEPAL) [11]. According to

Table 1. Central American Indicators in 2020 based on [11].

	Access to Electricity	Population	Area km2
Guatemala	92.4	17.91 M	108,889
Honduras	77.2	9.90 M	112,492
El Salvador	96.7	6.48 M	21,041
Nicaragua	92.3	6.62 M	129,494
Costa Rica	99.4	5.09 M	51,100
Panamá	92.9	4.31 M	75,517
Total	91.8	50.33 M	498,533

, in 2020, approximately 91.8% of the population in this region had access to electricity.

Over the past few decades, the Central American nations have made strides in expanding access to electricity, in part due to the growth of the power network since the 1990s, when the region experienced a more stable socio-political climate, as outlined in [5]. In addition, the Central American nations have established a regional power market and made notable progress in reducing carbon emissions from their power generation sources. The work presented in [12] highlights the remarkable success of Costa Rica, which generates more than 99% of its electricity from renewable resources. The countries of the region have focused on planning and implementing policies and solutions to mitigate the negative environmental impacts of economic growth as they move toward decarbonization.

2.1. Context: Initial Electrical Development

Since the 19th century, Central American policy has been strongly oriented toward the countries’ integration. Power energy policy is not the exception, as it will be shown next. In 1951 the Organisation of Central American States (ODECA) and the related Central American Common Market (CACM) were created to seek greater cooperation and integration within the region. These organizations first discussed the possibility of a regional power market. The Economic Commission for Latin America and the Caribbean (ECLAC) visualized in the 50’s the importance of regional electrical integration in Central America [13]. In 1958 the Committee for Economic Cooperation of the Central American Isthmus created the Central American Subcommittee on Electrification and Water Resources (SCERH) to study and develop the electricity sector and water resources. Additionally, the Regional Electric Interconnection Group (GRIE) was created in 1963, and its function was to promote regional electricity integration supported by ECLAC.

In the 60s, the first regional study of electrical interconnection was developed, and a Regional Operation Centre in collaboration with the Nationals Control Centres of the area was created. As a result, the first bi-national interconnections were achieved between Nicaragua-Honduras in 1976, Costa Rica and Nicaragua in 1982, Panama and Costa Rica and El Salvador and Guatemala in 1986, and El Salvador and Honduras in 2002.

In 1964, the Regional Energy Integration Commission (CIER) was created and sought the American continent’s electrical integration. Based on the previous antecedents and the importance of the subject, the Central American Electrification Council (CEAC) was created in 1979 and ratified in 1985. The objective of CEAC was the electrical interconnection among the region. The decades of the 70s and 80s represented a vital milestone due to the large hydroelectric projects built. At this time, the system capacities met the requirements of the region. However, in the following years, investment in hydroelectric resources stopped due to a lack of capital funds [5].

The first regional electrical interconnection limited the power transfers among countries to 40 MW. In addition, the transmission power lines were susceptible to problems associated with atmospheric lighting yielding low reliability. Nonetheless, the regional electrical interconnection was completed in 26 years. The power transfers among countries were limited to 40 MW. In addition, the transmission power lines were susceptible to problems associated with atmospheric lighting yielding low reliability. Nevertheless, a great experience was generated, and regional interconnection was possible. During the 90s, the first bilateral contracts were generated among the countries, starting the Regional Power Market. At this time, the power companies were public monopolies, and they controlled generation, transmission, and distribution. In 1991, the Central American Integration System (SICA) was created, which was vital for political, social, and economic integration, and ODECA was dissolved.

2.2. Central American Interconnection

The Central American and Spanish governments envisioned the Central American Electrical Interconnection System (SIEPAC) in 1987 within the so-called Puebla-Panama Plan. In 1996, the Central American and Spanish governments and the Inter-American Development Bank (IDB) agreed on the framework for implementing SIEPAC. As a result, technical cooperation was decided to develop technical-economic feasibility studies, which included formulating the Framework Treaty for the Regional Electricity Market (MER). Accordingly, the Regional Electricity Market is governed by the Central American Electricity Market Framework Treaty rules.

SIEPAC has been created and operated by a transnational association of companies from the public and private sectors. More specifically, this association is formed by the National Institute of Electrification (INDE), Guatemala, the Executive Hydroelectric Commission of the Lempa River (CEL) and Transmission Company (ETESAL), El Salvador, the National Electric Power Company (ENNE), Honduras, the National Electricity Transmission Company (ENATREL), Nicaragua, the Costa Rican Electricity Institute (ICE), Costa Rica, the Electric Transmission Company S.A. (ETESA), Panama, the Electric Interconnection Company S.A. (ISA), Colombia, the Spanish Energy Company (ENDESA), España, and the Federal Electricity Commission (CFE), México.

2.3. Central American Power Sector: Current Situation

The United Nations Economic Commission for Latin America and the Caribbean (ECLAC) released as mentioned in report by [11] about the power generation statistics in Central America. Figure 2 summarises the data for 2020, while Figure 3 shows the region’s electrical matrix evolution. Central American power sector investment comes primarily from the private sector (73.29% in 2019, according to [11]). The high participation of the private sector in the Central American electricity system is because about 74% of the energy generated comes from private power plants. Furthermore, the Central American generation capacity is mainly renewable (66.43% in 2019, according to [11]).

Nevertheless, according to [14,15], several Central American governments plan to add 38.5% more non-renewable power capacity to the power system in the short and mid-term. On the other hand, the region must reduce its CO₂ emissions to gain moral authority to call for more significant international action against climate change, given that it is one of the most vulnerable regions to climate change as mentioned by Hidalgo et al. [16]. About 24.11% of the region’s average CO₂ emissions are due to electricity production as mentioned by Granados [17].

2.4. Electrical Infrastructure

Figure 2 illustrates that an exclusive transmission infrastructure links the Central American electrical systems. This infrastructure is called SIEPAC (Spanish acronym for the Electrical Interconnection System for Central American Countries) and spans 1786 km, connecting the region’s nations through 18 electrical substations [14]. It comprises a 400 kV Guatemala-Mexico interconnection and two 300 MW circuits. The transmission line linking Guatemala and Mexico spans 98.6 km and is equipped with two 225 MVA power transformers. While the interconnection between the two countries can withstand power levels up to 450 MVA, the system is limited to transmitting 300 MW [18].

Table 2. Power transmission infrastructure among Central American countries.

	Length in km					Transformation in MVA		MVAR Compensation		% Losses
	SIEPAC	230 kV	138 kV	115 kV	69 kV	2-W	3-W	ind	cap
Guatemala	282	2490	472	0	2418	7865	2895	230	125	13.3
Honduras	270	1011	1034	0	690	5660	2550	80	40	32.5
El Salvador	287	288	0	1215	133	5378	937	0	116	13.5
Nicaragua	305	851	1857	0	623	4908	1415	95	126	21.2
Costa Rica	492	1581	602	0	98	4068	7305	80	267	10.9
Panamá	150	3293	0	618	0	8931	5513	250	971	13.3
Total	1786	9514	3965	1833	3962	36,810	20,615	735	1645	17.4

2-W: Two Winding; 3-W: Three Winding.

displays the distinct characteristics of the transmission infrastructure in each country, such as voltage levels, capacities, transformation, and losses, among others. As per the details presented in

Table 3. Events outside the normal operating range.

Date	MW Transfer to SER	Interconnection Voltage in p.u.
03-04-17	404.23	0.952
03-21-17	413.48	0.956
04-26-17	441.94	0.958
06-27-17	442.40	0.937
08-28-18	418.53	0.933
10-30-18	326.17	0.946
03-11-19	408.02	0.954
06-23-19	408.31	0.957
07-05-19	469.76	0.950
07-08-19	444.06	0.959
06-23-20	459.06	0.957
08-27-20	381.97	0.959

, issues with the Mexican interconnection are common. Additionally,

Table 4. Supplementary Control Schemes in the Central American Electrical System.

SCS	Location	Aim
1	Guatemala	Low voltage and high power protection ($V_{int}$ ≤ 0.97 pu and $P_{int}$ ≥ 300 MW)
2	Guatemala	Regional electrical system oscillation modes protection
3	Guatemala	Loss of generation or load protection in the SER or Mexico Power System
4	Honduras	To avoid the injection of Power ≥ 210 MW toward Nicaragua
5	Nicaragua	To avoid the injection of Power ≥ 160 MW toward Costa Rica
6	Nicaragua	To avoid the injection of Power ≥ 220 MW from Costa Rica and Panamá
7	Costa Rica	To avoid the injection of Power ≥ 0 MW toward Panama
8	Panamá	To avoid the injection of Power ≥ 200 MW toward North Region

presents the current solutions to mitigate these operational problems using Supplementary Control Schemes (SCS). Nevertheless, although these measures are valuable for protecting the integrity of the system and preventing operational risks, they have frequently led to blackouts or partial disconnections between the nations of the region. Figure 2 shows the percentages of electricity production for every country in the region. A significant reliance on non-renewable energy sources can be observed. Notably, the Honduran power system exhibits that nearly 20% of electricity generation originated from non-conventional renewable sources like solar and wind. However, it is crucial to remember that both these sources have intermittent modes of operation. In the same way, the Costa Rican power system displays a substantial proportion of renewable electricity generation.

As it can be seen in Table 2, the power systems across Central American countries are not uniform. Thus, the following summary is based on the data from [15] for 2019 and 2020 and provides an overview of the current situation in each Central American country. The subsequent section describes the current circumstances in each country.

2.4.1. Guatemala

The electricity generation in Guatemala amounts to 12,228 GWh, with a maximum demand of 1785 MW and an installed capacity of 4111 MW, where nearly one-quarter of the total comes from non-renewable sources. The reliance on non-renewable electricity generation was 24.72% in 2020. The percentage of the population with electricity access in Guatemala is 92.4%. In 2019, the power system experienced losses of 14.9%. The infrastructure includes a substantial 69 kV network, as shown in Table 2, and voltage regulation may become problematic if there is inadequate investment in power infrastructure.

2.4.2. Honduras

The electricity system in Honduras had a maximum demand of 1639 MW, an installed capacity of 2713 MW, and generated a total of 9253 GWh. Reforms were implemented in the 1990s but mainly focused on power generation, neglecting transmission and distribution, which resulted in inadequate investment in these areas. Consequently, the power losses in its system were significant, reaching approximately 33.2% in 2019 according to [11,19]. Furthermore, only 77.2% of the population had access to electricity, making Honduras the country with the lowest electric power accessibility among Central American countries. In 2020, non-renewable sources contributed to 42.77% of the power generation, as reported by ECLAC [20].

2.4.3. El Salvador

In El Salvador, the maximum electrical system demand was 1044 MW, which was supported by an installed capacity of 2258 MW from various generation sources. Furthermore, the country generated 5672 GWh of electricity in 2019. Regarding electricity access, El Salvador ranks second among Central American countries, as 96.7% of its population has access to electricity. The power system experiences relatively low losses, as the percentage of power lost in 2019 was 11.9%. El Salvador has also implemented an energy policy that aims to promote renewable energy sources and encourage efficient energy consumption practices. As of 2020, non-renewable sources accounted for 15.29% of the country’s electricity generation.

2.4.4. Nicaragua

In 2019, the Nicaraguan power system had an installed capacity of 1599 MW, and renewable sources generated 54.55% of the total energy. The system produced 4056 GWh of energy with a peak demand of 717 MW. The power system experienced losses of 22.76% in 2019, according to sources [21,22]. The electricity access rate in Nicaragua was 92.3%, as reported in [15]. Compared to other Central American nations, Nicaragua’s power system is highly dependent on fossil fuels. As of 2020, non-renewable energy sources accounted for 31.38% of the total energy produced, as stated in [20].

2.4.5. Costa Rica

In 2020, Costa Rica’s power system had an installed capacity of 3566 MW, generating 11,312 GWh with a maximum demand of 1715 MW. 99.15% of the electricity produced was from renewable energy sources. According to reports, power transmission losses in 2019 were 11.6%. Costa Rica’s power system is highly accessible, with 99.4% of the population having access to electricity. Public companies generate approximately 80% of the electrical energy produced. Moreover, the distribution and transmission lines are owned by public companies.

2.4.6. Panama

The power system in Panama has an installed capacity of 4124 MW, producing 11,553 GWh of electricity, with a maximum demand of 1961 MW. In 2019, Panama experienced losses of 12.7% in its power system, while 92.9% of its population had access to electricity. Non-renewable energy sources generate 24.14% of the power mix in Panama. In recent years, Panama has increased its investments in power infrastructure, such as transmission lines and inductive and capacitive reactive power compensation. Panama is also planning a new interconnection with Colombia, which is expected to improve the stability of the power system significantly.

2.5. Imports, Exports, and the Regional Power Market

The Framework Treaty for the Regional Power Market (see Section 2) opens national markets to the regional market regarding access to electricity transmission and opportunities to buy and sell electricity between participants from different countries.

Regional electricity transactions between market participants occur in the Regional Power Market (RPM). Short-term exchanges can occur from a regional economic dispatch of energy and medium and long-term contracts.

Market transactions can occur between all market agents: generators, transmitters, distributors, traders, and large consumers. This way, all agents of the national wholesale markets will be agents of the RPM. Agents will be able to carry out electricity transactions freely and without discrimination. Vertical integration is allowed if business units are created with cost separation.

The RPM uses the concepts of injection and withdrawal at the nodes of the regional transmission infrastructure, which causes energy flows in the transmission lines that cross the political borders of the countries. These energy flows are called exports or imports.

The RPM and SIEPAC have improved the reliability of the Central American power systems, making them more robust and promoting their modernization and optimization [5,23]. Since 2014, imports and exports in the region have doubled among countries, as shown in

Table 5. Historical power import and exports among Central American countries in GWh.

	GUA		HON		SAL		NIC		CRC		PAN		Total
	Imp	Exp	Imp	Exp	Imp	Exp	Imp	Exp	Imp	Exp	Imp	Exp	Imp	Exp
2014	1.4	986.4	320.4	4.1	618.8	238.0	22.3	49.0	251.5	69.7	189.2	98.5	1403.6	1445.7
2015	1.9	842.4	151.7	2.7	981.4	82.2	33.5	21.5	172.5	280.1	17.1	139.4	1358.1	1368.3
2016	5.2	1110.2	195.3	16.2	1212.2	224.0	204.8	17.9	313.4	181.2	30.0	397.9	1960.9	1947.4
2017	19.2	1741.1	331.1	12.7	1729.1	143.8	326.6	1.0	31.8	230.0	6.6	318.2	2444.4	2446.8
2018	9.7	1789.9	381.3	8.4	1968.3	209.1	201.1	0.2	65.7	307.5	14.7	327.2	2640.8	2642.3
2019	9.5	1657.1	259.5	5.9	1948.8	656.7	434.4	0.2	339.8	322.6	96.3	431.5	3088.3	3074.0

Imp: import; Exp: export.

. Guatemala, Costa Rica, and Panama are the leading exporters, and the rest of the countries are net power importers.

Table 6. Power transfer limits between countries in MW.

Demand	GUA-HON-SAL		HON-NIC		NIC-CRC		CRC-PAN
	N-S	S-N	N-S	S-N	N-S	S-N	N-S	S-N
Max	300	300	210	220	160	220	0	200
Med	300	300	190	200	180	220	0	200
Min	300	300	180	220	170	220	0	200

N: North; S: South.

shows the maximum power transfer among countries for June 2021.

The Mexican power system is significantly larger than the Central American regional power system; therefore, it is more robust to disturbances. Guatemala has benefited from RPM, i.e., the power prices have decreased to be more competitive and to supply the internal demand effectively as mentioned by Molina [23].

2.6. Green Transition Central America Power System

Guatemala has a diverse range of energy sources that offer significant potential for growth and development. Private sector participation in the country’s energy generation for 2019 was approximately 83% of the total. It is worth noting that approximately 903 MW of the installed thermal generation capacity comes from coal. However, the National Energy Plan [24] highlights the enormous potential of Guatemala in terms of renewable energy sources. According to estimates, solar energy generation has the potential to reach 200,000 TWh, while wind power could generate up to 20,000 GWh. Furthermore, there is a clear and robust policy aimed at reducing greenhouse gas emissions. Based on the energy matrix, renewable sources accounted for 58.01% of the energy generated in 2019, while the installed capacity was 69.49% [11]. The country has proposed three guiding principles to steer the growth of its energy sector, namely: a. Sustainable Use of Renewable Resources, b. Energy Efficiency and Saving, and c. Reduction of Greenhouse Gas Emissions.

Private participation has been a dominant factor in the Honduran electricity market. This was reflected in both the installed generation capacity and electricity generation, both at 82% in 2019. Of this, 55% was generated from renewable sources, while 125 MW of installed thermal generation capacity was based on coal technology. To promote economic development and provide low-cost electricity, the Honduran government created the ENEE. However, there are challenges in the electricity sector due to low electricity coverage. In response to an energy crisis in 1994, the government increased private participation, leading to a dependence on oil derivatives for non-renewable energy. This, coupled with a lack of investment, resulted in high losses above 30% in the power system. In 2014, reforms to the electricity sector improved conditions for private investment in both distribution and transmission and in 2017, distribution was outsourced to a mixed capital company to reduce technical losses. The installation of renewable generation is now encouraged, but political and administrative aspects are important in planning the Honduran electrical system. Honduras has great hydroelectric potential estimated at a capacity of 5000 MW, like the rest of the countries in the region.

El Salvador, like Honduras, has heavily relied on imported energy, which accounted for 20.36% of the country’s total electricity consumption. To address this and other energy-related issues, the government has implemented six fundamental energy policies and strategies, as outlined below: 1. The first strategy aims to diversify the country’s energy matrix by promoting the use of renewable energy sources. The objective is to reduce dependence on petroleum derivatives and minimize the generation of electricity from non-renewable sources. This involves increasing imports and exploring the incorporation of mega-projects, both nationally and regionally. However, the construction of hydroelectric plants has been met with socio-environmental conflicts, as has been observed in Guatemala. 2. The second strategy seeks to strengthen the role of the state as a regulatory and governing body of the energy sector. The goal is to promote sustainable and environmentally friendly energy development that benefits the citizens. Proposed reforms include strengthening the role of the CEL and its subsidiaries in decision-making to enforce the government’s strategic objectives and energy policies. 3. The third strategy promotes a culture of efficiency and energy saving. This involves the rational use of energy resources based on efficient technologies that promote energy savings. 4. The fourth strategy is the expansion of coverage and preferential social rates. The policy prioritizes electricity penetration in areas with a low Human Development Index and promotes renewable sources with a cost-effective and easily accessible rural electrification policy. 5. The fifth strategy is technological innovation and development. It promotes research and development in clean energy, involving universities, research centers, private companies, international organizations, and all stakeholders involved in related issues to solve problems, challenges and provide opportunities for the development of a better society. 6. The sixth strategy is regional energy integration, which promotes the potential of the electricity market to acquire cheaper energy from more diversified sources.

The energy mix of the Nicaraguan electrical system is characterized by a high proportion of non-renewable sources. Furthermore, private companies currently hold a 96.24% share in power generation, whereas state-owned entities own 15.76% of the installed capacity. The government aims to add the following capacities to the system from 2019 to 2033: 207 MW from wind power, 162 MW from solar power, 54 MW from biomass, 1102 MW from hydroelectric power, 550 MW from geothermal sources, and 1096 MW from thermal sources. [25] According to [22], the transmission and distribution infrastructure in Nicaragua requires further investment.

The electrical system of Costa Rica is distinctive compared to other countries in the region, as it generates 99.1% of its electrical energy from renewable sources, with the public sector contributing more than 75%. In 2019, 100% of new electrical energy additions were geothermal, with plans to retire 73 MW of obsolete, expensive, and inefficient thermal generation. The country’s short and medium-term electrical planning is focused on renewable sources, including solar, wind, and hydroelectric generation. The Diquís hydroelectric project had been identified as a candidate project, but studies show that it is not a compelling option due to low demand growth. The country’s wind potential, which does not include water surfaces, is estimated to generate around 6700 GWh per year. While Costa Rica considers the use of Liquefied Natural Gas (LNG) for electrical generation, its growth plan from 2018 to 2026 includes installing 198 MW of energy, with 24% in hydroelectric, 15% in wind, 56% in geothermal, and 5% in solar. Long-term plans (by 2031) include 1435 MW in hydroelectric, 220 MW in geothermal, 120 MW in wind, 81 MW in solar, and 480 MW in thermal. The country’s electrical system expansion is guided by the National Energy Plan (2015–2030) with a 15 to 20-year study horizon.

The participation of private entities in the generation of electricity in Panama was quite high in 2019, accounting for 94.14% of the system. Additionally, non-renewable sources were responsible for 46.89% of electricity production, with 120 MW of the installed thermal generation utilizing coal-based technology. Panama has a significant potential for integrating wind energy with an estimated capacity [26] of 7180 MW, and its solar potential is also highly promising due to an average radiation of 4.8 kWh/day/m². Plans are underway to establish a new international connection with Colombia capable of transmitting 400 MW of power, and there are proposals for major electricity generation projects based on Liquefied Natural Gas (LNG) in combined cycle over the short and medium terms. In the long term, however, priority will be given to the availability of hydroelectric resources to reduce the dependence on petroleum derivatives for electricity generation.

2.7. Issues and Identified Risks

Problems in transmission and generation capacities can affect the power transfer and operation among countries, notwithstanding the use of Supplementary Control Schemes necessary to solve regional electrical problems. Table 3 shows the information collected, the reviewed data, and the analysis through thousands of Central American Power transmission system records measured by SIEPAC. Based on this information, we identified operational risk conditions at the Mexico interconnection with the SER, where it is restricted in power and voltage. Notice that the maximum capacity is limited to 300 MW, and the voltage must be kept above 0.95 p.u. (per unit of voltage).

Central American countries have increased intermittent power resources such as wind and photovoltaic power plants. For example, Honduras and Nicaragua have many intermittent resources in their power grid, as shown in Figure 2. In Honduras, wind and photovoltaic resources represent 7.86% and 11.61% of the total production, while, in Nicaragua, wind generation represents 16.16% of the whole production. On the other hand, PV generation in El Salvador comprises 13.73% of the entire power generation. Additionally, hydropower stations that can operate as base load power plants are scarce and are concentrated in the region’s south, see

Table 7. Larger Hydropower plants in Central America installed to 2021.

	Hydro Power Plant	MW Capacity
Guatemala	Chixoy: 300 MW	300
Honduras	Francisco Morazán: 300 MW	300
El Salvador	15 de septiembre: 180 MW 5 de noviembre: 180 MW Cerrón Grande: 172 MW	532
Costa Rica	Reventazón: 306 MW Miguel Dengo: 174 MW Arenal: 157 MW Angostura: 172 MW Garita: 134 MW Cachí: 152 MW	1095
Panamá	Fortuna: 300 MW Estí: 120 MW Bayano: 260 MW Changuinola: 222 MW	902

. The abovementioned situation makes it difficult to maintain power stability without using fossil-fuel power plant peakers. Moreover, fossil-fuel are expensive to operate in a Region that imports almost all of the processed oil as discussed in [5].

Another problem is the limit to power transmission between countries. For instance, there is a practical limitation in power flow among Honduras, Nicaragua, Costa Rica, and Panama due to the high losses in the Nicaragua and Honduras power system network, as shown in Table 2 and Table 6. This restriction in power flow reduces the transmission line capacity between north and south. The abovementioned situation has yielded congested power transmission lines, as shown in Table 6, limiting the power transfers among countries.

Power contingencies can cause the Central American power system to split into two large islands: Guatemala-Honduras-El Salvador (North) and Nicaragua-Costa Rica-Panama (South). The first island is interconnected to a more robust grid (Mexican Power System). On the second island, Costa Rica and Panama are the Central American countries with larger inertia generators and power generation. Nevertheless, problems could arise if the rolling reserve is insufficient to maintain the energy balance between generation and load in the two islands.

According to Table 6, the grid can be at risk when the power flows between North-South or vice versa. The balance between generation and load can be broken if the power system has single or multiple contingencies with high power transfer among countries. As a consequence, this problem causes frequency and voltage instability. Honduras, Nicaragua, and El Salvador import much energy, as shown in Table 5.

Therefore, the interconnection among these countries will experience high power flows, but the internal generation can not supply the demand; however, Mexico’s interconnection can compensate for it. Therefore, the interconnection between Mexico-SER can be vulnerable if the power flow exceeds 300 MW and the voltage interconnection reaches a 0.95 pu level or less, according to Table 3.

Currently, the Central American Power System (CAPS) is protected by Supplementary Control Schemes (SCS), as shown in Table 4. The primary function is to keep the power system operational and safe and minimize the possibility of a regional blackout. CAPS has a limited inertia capacity and depends on its interconnection with Mexico. However, an SCS-1 opens the interconnection between Mexico and CAPS when the power flow from or to Mexico is over 240 MW for a certain amount of time. This situation may produce instabilities in the power grid and may leave part of the CAPS without power. Several SCSs have been added to protect different areas of control in the region. SCS-7 disconnects the Panama power systems with the CAPS in case a power flow is outside the normal operational limits. This occurred on 1 July 2017, causing the total blackout in Costa Rica, Panama, and Nicaragua and partially in Guatemala, Honduras, and El Salvador. On the other hand, SCS-6 has been added between Honduras and Nicaragua power areas due to the total blackout in Nicaragua (9 June 2021).

3. Case of Study: A Blackout in Central America

3.1. Materials and Methods

To gain insight into the weaknesses and issues of the Central American power system, it was modeled and simulated using ETAP (Electrical Transient Analyzer Program) [27], which accounted for all transmission network elements, including power transformers, reactive power compensation, generators, and loads. The Electrical Transient Analyzer Program (ETAP) is a software that has been in development since the early 1990s and is used to analyze power systems. For instance, Siddique et al. and Makola et al. utilized ETAP in their work in [28,29], respectively. ETAP uses the Newton-Raphson and Accelerated Gauss-Seidel methods for power flow analysis, allowing for efficient loop and radial system modeling. ETAP also provides the ability to adjust the acceleration factor, enhancing the solving speed of certain systems. Figure 4 illustrates the developed model where the different colors represent different voltage levels, i.e., red represents 230 kV, blue 138 kV, cyan 69 kV, and green 34.5 kV.

Table 8. Central America Power System Features Modelled using ETAP.

Description	Element Simulated	Capacities
Buses	193	230/138/34.5 kV
Transmission Lines	119	—
Generators-Production	49	37,989 MWh
Power Transformer	133	2–3 W
Loads-Demand	66	1563 MW
Interconnections	5	GUA-MEX, SAL and NIC
Storage	2	1060 MW h/160 MW, H = 6 s

outlines the simulation components. A power flow analysis and transient stability study were conducted to replicate a 9 June 2021 event that caused a disturbance leading to a blackout in the Nicaraguan power system. Consequently, the system split into two large islands comprising Guatemala-Honduras-El Salvador and Costa Rica-Panama, respectively, with a disconnection from the interconnection with Mexico resulting in a regional frequency reduction.

3.2. Description of the Event

Besides the issues identified in Table 3, there has been a significant disturbance that occurred in 9 June 2021, which produced a large frequency reduction in Central America Power System as it is indicated in report of EOR [30] originating a black-out in the Nicaraguan power system. The following events in the Honduras power system provoked the unbalanced power:

1.

The disconnection of a transmission line in the Honduras Power Grid caused a high power transmission, translating into an unbalanced condition in the Regional Power System. It caused the loss of 169 MW in PV Generation.

2.

Un-balance condition provoked a change in the power flow (Mexico interconnection) from 200 to 484 MW. After 2 s, the power breaker opened the interconnection between Mexico-CA.

3.

After 120 s, power flow increased from 140 to 361 MW between Costa Rica and Nicaragua (interconnection 1), and opened the power breaker.

4.

Power flow increased from 218 to 394 MW between Costa Rica and Nicaragua (interconnection 2) and opened the power breaker.

5.

Power flow increased between Honduras and Nicaragua interconnection. The power breaker opened the two interconnections.

6.

Nicaragua was in black-out stage

For the model simulation, the demand and generation behavior profile is developed for the 9 June 2021 conditions at the time of the event. In this case, Honduras’ power demand reached 1563 MW. The three interconnections (Mexico-Guatemala, El Salvador, and Nicaragua) are modeled as dynamic equivalents based on data provided by regional power companies.

3.3. Simulation Results

As previously mentioned, a regional event resulted in a disturbance that led to the disconnection of the interconnection with Mexico, a blackout in the Nicaraguan power system, and a frequency impact on the region. The simulation shown in Figure 5 indicates that the voltage in the interconnection with Mexico was less than 0.97 pu, and there was a power flow exceeding 300 MW. This state persisted for at least $T\ge 11$ cycles. According to Table 4, these conditions trigger the activation of SCS-1 protection, which opens the interconnection after a specified duration. Table 3 reveals that this system anomaly is recurring and that the interconnection’s opening depends on the operational status at the time.

At the time of interconnection opening, the power reached 469 MW as there was inadequate inertia capacity to handle the disturbance at the regional level. The system operator’s report [30] confirms that modeling and simulation achieved conditions akin to the event’s description. Figure 6 displays the simulated frequency behavior on 9 June 2021, during the blackout, viewed from 16 multiple points in the Central American power system.

Figure 2 indicates a vulnerability condition since Guatemala-El Salvador interconnects with Honduras, while Costa Rica-Panama interconnects with Nicaragua, the countries with the highest losses in the regional power system, as described in Table 2. From this viewpoint, it is crucial to find solutions beyond the Supplementary Control Schemes since they are temporary fixes. Instead, investments must be made in the transmission system to enhance transfer capabilities and make the system more flexible. For example, it has been observed in Figure 2 that the Honduran power system can generate up to 20% of energy from renewable sources (which are intermittent), but without a sturdy transmission infrastructure, it would be impossible to transmit this power. The high losses in transmission lines result in saturation, leading to insufficient power capacity when they are compromised during high generation levels and causing overload trips. The main problem identified is that an imbalance in generated or demanded power can trigger instability conditions similar to those witnessed in the analyzed event. The stability of the system is adversely affected by the limited ability to provide inertia, particularly in response to specific disturbances due to unbalance of power affecting the frequency. As demonstrated by Table 7, the majority of the largest HydroGenerators are located in the southern region, with only El Salvador possessing larger capacity machines in the northern region. This circumstance renders the electrical system more vulnerable because there is no interconnection with Colombia, and Honduras and Nicaragua experience substantial losses in their electrical networks, as mentioned earlier. The situation does not significantly impact Guatemala’s power system due to its robust interconnection with Mexico. Consequently, there are considerable opportunities to be seized through investments, and electrochemical storage may be a viable option in the short term due to network congestion.

4. Challenges and Opportunities

It has been identified that Central America suffers from an insufficient transmission infrastructure and a heterogeneous distribution of its energy resources. Nevertheless, as indicated by [5], Central America has excellent conditions for developing renewable energy sources such as wind and photovoltaic.

However, due to the intermittent and unregulated nature of wind and solar generation, the excess of these energy sources in the electrical grid could generate more problems than solutions. Thus, Central America has the challenge of promoting its great renewable energy potential without deteriorating the stability of its electrical grid by using a limited transmission infrastructure.

Several authors have proposed solutions for integrating renewable generation, stability controllers, power balancing, virtual inertia, and storage. For instance, kang et al. [31] and Huo et al. [32] propose voltage management options by conducting a sensitivity analysis of the system to high penetration of renewable energy.

In this regard, the power management methods are an alternative in the distribution system for decreasing the fossil-fuel dependence and transfer capacities in transmission in power systems. The strategy, as mentioned above, can be applied to the cases of Honduras and Nicaragua, which present high losses and a high generation of non-renewable.

The replacement of generation-based fossil fuel with renewable energies can be developed as proposed by [33] where the use of Power-Angle Modulation Controllers or Fast Local Voltage Controller is proposed.

As discussed in [34,35], problems in frequency oscillations can occur if the power generation does not have the inertia capacity to respond to the disturbances.

In this regard, virtual inertia, as cited in [36,37,38,39], is an opportunity to enhance performance in situations of instability conditions.

Considering the technical problems in Honduras and Nicaragua, virtual inertia applications can be an option in the north of the region (Guatemala, Honduras, El Salvador, and Nicaragua), increasing renewable generation, stability support, ancillary services, and demand response.

Kim et al. and Dratsas et al. have proposed the used of storage in applications of frequency regulation [40,41] and it acquired importance in the Regional Security Assessment of the power system with high penetration of renewable generation. Figure 2 shows that Honduras, El Salvador, and Nicaragua have a significant penetration of wind and solar energies compared to hydropower generation. In these cases, storage can support the power system for maintaining the generation balance.

Also, the region should have sustained growth, tending to be more distributed and less centralized to meet the energy requirements of certain areas as mentioned for Pérez and Knittle in [42]. In this way, the generation can be less concentrated, reducing power flows in transmission lines.

Even storage combined with distributed generation can be essential as mentioned for Wong et al. and Gómez et al. in [43,44,45]. Moreover, Iweh et al. indicated the distributed generation can be an alternative to manage demand locally, decongest transmission, and minimize cost [46].

The Nordic Power System shows some similarities with the Central American Power System. For instance, both regions have large hydropower and wind energy potential. However, the Nordic countries have planned their power system and implemented policies to increase renewable resources making generation and transmission more sustainable.

For example, Nordic countries have designed storage integration with hydro generation plants [47] to seek a better frequency response in case of disturbances considering a high wind energy penetration as it is mentioned by Acosta et al. Such practices can also be beneficial for the Central American power system. But unfortunately, the lack of investment has caused vulnerability and instability of the power systems in certain conditions.

However, on the other hand, alternative solutions can strengthen the power system using technology such as storage and a well-planned mix of renewable resources such as wind, PV, and marine. Thus, we can summarise the possible solutions for the Central American electricity system in two types: intelligent grid management solutions and storage integration. Both types of solutions are not exclusive; on the contrary, they are complementary.

From the point of view of the electricity sector, it is possible to implement innovative technology for grid stability through actors that provide intelligent ancillary services. This means giving value in the electricity market to service providers that ensure the stability of the power grid.

In several countries, there is recognition of this service but in a minimal and basic way, as [48] comments in the case of Colombia. However, economic incentives can be implemented to promote the development of innovative ancillary services, as proposed by [49].

Few electricity markets in low- and middle-income countries recognize the grid services that storage can provide. In this regard, Winfiel et al. and Sioshansi et al. [50,51] have presented strategies to develop energy policies to encourage grid storage.

Additionally, the region is vulnerable to natural disaster risks, and the possibilities of affectation are very high. Therefore, power planning must develop actions to improve power grid resilience by taking advantage of storage as it is mentioned by [52,53,54].

In this regard, a regional vulnerability study, such as the ones mentioned by [55,56], is necessary to identify the best options for the possible integration scenarios of non-programmed (intermittent) renewable generation. For this reason, alternatives should be analyzed to increase transmission capacities and give generation flexibility.

Furthermore, in long-term power planning, renewable generation represents an opportunity to reduce the dependence on fossil fuels in the region. Therefore, hydroelectric generation with storage can contribute to increasing it.

Another aspect to consider will be to seek solutions to integrate renewable generation resources in the medium and long-term context of generation planning and avoid using thermal generation, as it is in the expansion generation planning. For instance, the power system of the Nordic countries has been planned with a vision beyond the technical aspects as it is mentioned by [57]. They consider the necessary options to integrate renewable generation resources, considering all the implications in power planning. The region can follow this generation’s planning.

5. Conclusions

Central America has abundant renewable energy resources, and recent policies have aimed to develop a regional electricity system and more non-conventional renewable energy projects. However, significant challenges remain due to uneven infrastructure and energy resource development, causing system instability. To address this, integrating ancillary services and storage solutions can improve the Central American power system’s robustness, along with developing microgrids, energy management, and sustainable decarbonization plans. Power planning should be done in the short, medium, and long term to make better decisions based on good criteria and practices, considering other regions’ examples.