Entrepreneurs assured that various situations in Guatemala have pushed the fall in exports.
Energy exports generated at plants located in El Salvador fell by 48.3 percent between January and July 2024, according to the Central Reserve Bank (BCR).
The government says $52.5 million in electricity was sold in the first seven months of 2023, a figure that fell to $27.1 million for the same period this year.
The BCR reflected that 98.52 per cent of the exports made by El Salvador in 2024 were directed to Guatemala, with $26.7 million negotiated.
Costa Rica bought $300,000 and Nicaragua another $100,000, according to the BCR.
The fall in exports to Guatemala reduces shipments in general. The data confirm that the Guatemalan market bought $50.1 million in 2023, while this year $26.6 million has been acquired, a reduction of $23.4 million
El Salvador and Guatemala are part of the Regional Electric Market (MER), a system created in 1996 for more competitive energy exchanges than their own generation.
The president of the Salvadoran Association of Industrialists (ASI), Jorge Arriaza, acknowledged, without specifying reasons, that the fall in energy exports so far this year is linked to limitrs of the purchasing countries.
El Salvador is an energy exporter, but there have been some issues with Guatemala that have limited export, or with other countries and, for the time being, export is quite diminished.
Jorge Arriaza
President of the IRS
Arriaza recalled that in the past there had been a need for a rationalization of energy due to the few rains in the region due to the El Niño phenomenon. Now, the president of ASI added, the country has returned to a “normal” in terms of the supply of energy.
Strengthening the MER
Previous research by the Regional Operator (EOR) revealed in March the need for investment from$198 millionto improve the transmission of the MER network in order to support the increase in demand over the next 10 years.
In this regard, the European Union (EU) has proposed that the Central American governments support with up to $1,667.4 million (EUR 1.5 billion) for the transformation of the system.
“I was a month and a half ago (June) in Tegucigalpa to meet the Central American ministers of the Energy Council… to propose putting on the table 1,200 to 1.5 billion euros to help modernize the MER, said the EU Ambassador to El Salvador, Francois Roudié.
Roudié acknowledged that they have identified that the market doesn’t work so much, but that they want to drive a system of electricity for everyone.
The diplomat indicated that they are looking for it to be modernized to move from a surplus market, where each country sells – what it does not consume, to one – real, in which it is marketed and generates more energy efficiency.
European support anticipates investment in infrastructure, where wiring and interconnections are modernized, as well as regulations, so that the market will “flux” through “solidarity” among operators.
The advantage of this (is) security of supply and that is crucial for any generator,” Roudié added.
The ambassador assured that the work will help to boost the development of the renewable sector, given that the region has “a great potential.”
For this support to initiate, the diplomat said, a commitment is required by the countries that make up the MER.
The EU indicated that there is interest on the part of governments in applying to this anchorage, but that they are currently awaiting a formal response.