COSTA RICA NEWS – The state energy company, the Instituto Costarricense de Electricidad (ICE) says it has finished the pending works for the transmission line of the Central American Electrical Interconnection System (SIEPAC).

The 1.800 kilometre line is an interconnection of the power grids connecting some 37 million consumers in six Central American nations: Panama, Costa Rica, Honduras, Nicaragua, El Salvador, and Guatemala.

Some 500 kilometres of the SIEPAC lines go across Costa Rica.

The last stretch covered 32 kilometres between the Parrita and the Palmar. The works were delayed due to the opposition of ecologists and neighbours, and also because of problems of environmental viability that were solved in court.

The project was discussed since 1987. The constructed new transmission lines was to have been completed in April 2013.

SIEPAC network includes a 1,790-kilometre 230 kV transmission line with a capacity of 300 MW between Guatemala and Panama, as well as improvements to existing systems. At the second stage the capacity will be increased up to 60 MW.

Proponents of SIEPAC expect that interconnecting the nations’ electrical transmission grids will alleviate periodic power shortages in the region, reduce operating costs, optimize shared use of hydroelectric power, create a competitive energy market in the region, and attract foreign investment in power generation and transmission systems.

SIEPAC is owned by a Regional Operations Entity (Empresa Proprietaria de la Red – EPR), created in 1999 with registration in Panama, and comprising the public utilities and transmission companies of the six participating countries (75%) and private capital (25%). In some countries integrated utilities are shareholders – ENEE of Honduras, ICE and CNFL of Costa Rica – while in others shares are held by transmission companies – INDE of Guatemala, ETESA of Panama, and ENTE of Nicaragua. In the case of El Salvador the utility CEL and the transmission company ETESAL own the shares jointly. The private shareholders are Endesa of Spain and ISA from Colombia.

Critics have argued that the project will not make electricity cheaper for consumers in Central America, but may actually increase tariffs. Some critics also argue that SIEPAC will facilitate electricity exports to Mexico and not contribute to expand access in Central America. It is also argued that much of the increased generation capacity facilitated by SIEPAC would be in the form of large hydropower with associated social and environmental costs. Also, there are fears that the dominance of the power sector in Central America by large foreign corporations would be increased. Finally, there are some environmental concerns related to the transmission line itself. The initial Environmental Impact Assessment financed by the Inter-American Development Bank (IDB) analyzed only the direct impacts of the transmission line and not its indirect impacts from induced power generation.

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