Nicaragua’s Volcanoes Fuel Green Energy Drive

Nicaragua has the potential to become a paradise of renewable energies. The Central American country has extensive geothermal resources – thanks to major seismic and volcano activity – great exposure to wind and plenty of sunshine year long.

Even though Nicaragua is now third in the region, after El Salvador and Costa Rica, in generating electricity from geothermal energy, its potential is considered the highest in Central America. Its geothermal reserves are estimated at 1,500 megawatts – higher than the whole current national energy system, which generates 1,300 megawatts – but only 10 percent of them have been developed at two centers: Polaris, located in Managua, and Momotombo, close to the volcano of the same name by Lake Nicaragua.

Until recently, Nicaragua relied exclusively on oil to generate energy, which was neither cost-effective nor environment-friendly. The geography of the country contributed to a very limited electricity supply and one of the highest prices in the region, with an average of $0.24 per kilowatt hour. With 42.5 percent of Nicaragua’s population living under the poverty line, the lack of access to electricity is an obstacle to development.

With this scenario, the country set course for a fundamental change in 2006, when it launched its renewable energy program. Seven years later, 58 percent of Nicaragua's energy comes from clean sources, and the remaining 42 percent comes from oil, according to the Ministry of Energy and Mining.

Switching to geothermal energy could do a lot for Nicaragua. According to the World Bank, the country stands to save $88 million now spent on oil imports. Polaris alone could generate 20 percent of its energy needs. Initial investment in the effort, financed by the International Finance Corporation, is expected to reach $450 million.

Another wing of the government's clean energy program is the wind farms that are already part of the Nicaraguan rural scenery. Last month, the government opened Eolo, a 22-turbine farm in the state of Rivas, which will provide the country with 44 megawatts.

Nicaragua aspires to generate 90 percent of its energy through renewable sources by 2020. Reaching the goal would put it ahead of neighboring Costa Rica, which with 84 percent of its energy from renewable sources is currently the “greenest” of Central American countries.