El Salvador's energy sector is largerly focused on renewables. El Salvador is the largest producer of geothermal energy in Central America. Except for hydroelectric generation, which is almost totally owned and operated by the public company CEL (Comisión Hidroeléctrica del Río Lempa), the rest of the generation capacity is in private hands. With demand expected to grow at a rate of 5% in the coming years, the Government's 2007 National Energy Strategy identified several hydroelectric and geothermal projects as the best option to meet demand in the future and to diversify the country's energy mix.
This would also reduce the dependence on traditional thermal sources and, with that, the vulnerability to high oil prices that the country started to face in 2005. El Salvador is also one of the countries included in the SIEPAC project, which will integrate the electricity network of the country with the rest of the Central American region.
Electricity supply and demand
Installed capacity
El Salvador is the country with the highest geothermal energy production in Central America. Total installed capacity in 2006 was 1,312 MW, of which 52% was thermal, 36% hydroelectric and 12% geothermal. The largest share of generation capacity (65%) was in private hands. In terms of evolution, installed capacity has almost doubled in the last 20 years and increased by 200 MW since the year 2000.
Gross electricity generation in 2006 was 5,195 GWh, of which 40% came from traditional thermal sources, 38% from hydroelectricity, 20% from geothermal sources, and 2% from biomass.
Demand
In 2006, total electricity sold in El Salvador was 4,794 GWh, which corresponds to 702kWh annual per capita consumption. The residential sector accounted for 33% of the consumption, with the unregulated market making up for 11% of the electricity consumed.
Maximum demand in the wholesale electricity market was 881 MW, 6.3% higher than the figure for 2005.
Demand versus supply
Increase in maximum demand since the year 2000 has been matched by similar increases in installed capacity. Average annual increase in maximum demand has been 2.6%, while average increase in installed capacity has been 2.9%, with increase percentages above 6% for both measures for the year 2006. The nominal reserve margin for the system in 2004 was 36%. Although high, this number does not capture the vulnerability of the generation system to particular unit outages, especially those related to hydroelectric capacity and availability.
As for the future, demand is expected to grow at an annual rate of 5% in the coming years. Peak demand is expected to grow from 833 MW in 2005 to 1,030 MW in 2010. Planning simulations indicate that the risk of power rationing is unlikely to occur until 2010 even if there is a delay in the commissioning of the SIEPAC interconnection. The 2007 National Energy Strategy identifies the geothermal and hydroelectric projects more likely to be executed in order to close the gap between demand and supply in the future and to meet the objective of diversifying the country's energy mix.
Access to electricity
In 1995, only 65.5% of the population in El Salvador had access to electricity. Currently, the electrification index is 83.4%. This coverage is higher than that in Guatemala (83.1%), Honduras (71.2%) and Nicaragua (55%) but lower than the one for Costa Rica (98.3%) and Panamá (87.1%) and also below the 94.6 average for LAC. Electrification in most major urban centers is estimated to be above 97%, whereas rural coverage is around 72%. The Ministry of Economy's plans seek to reach a 93% rural electrification index by 2009. This ambitious plan includes the expansion of the distribution network as well as the installation of photovoltaic solar panels in areas that are isolated from the network.
Service quality
Interruption frequency and duration
In 2005, the average number of interruptions per subscriber was 12, while duration of interruptions per subscriber was 16 hours. This is very close to the weighted averages for LAC, which are 13 interruptions and 14 hours respectively.
Distribution and transmission losses
In 2006, distribution losses in El Salvador were 12.4%, only higher than those of Costa Rica (9.4%) and below the regional Central American average of 16.2%. On the other hand, transmission losses were as low as 1.7% for the same year.
Responsibilities in the electricity sector
Policy and regulation
The regulatory entities for the electricity sector in El Salvador are: