Over the last decade Central America has begun launching a range of small clean energy projects to reduce the impact of climate change and high oil prices, and to supply energy to communities in remote regions.
As a result, today almost 65 percent of the electric power supplied to public utilities in the region is contributed by renewable energy sources, according to the Economic Commission for Latin America, a United Nations body.
In Perquin, a village in the forest on the border between El Salvador and Honduras, Salvadoran families have built a gravity-powered micro hydropower plant in the local river.
Previously, community members cut down trees to burn for fuel, deforesting the area and affecting the ecology of the river basin.
But today they sell energy to neighbouring Honduras, using the profit to maintain the hydro plant and as a community emergency fund.
Juan Benitez, a farmer in Perquin, said that electricity generated by the hydropower plant runs lighting that enables children to do their homework in the evenings, and that smoke from fires no longer affects villagers’ lungs and eyes.
“This project has helped us because we are poor communities and don’t have access to anything; we are very remote communities,” Benitez said.
The micro hydropower plant has also given them the chance to seek new ways to improve incomes, he said. The community is developing a chicken farm, for instance, allowing local people to earn money and find alternatives to agricultural fieldwork.
“If there was no (electric) light, this chicken farm wouldn’t be possible, because you always need power for this kind of thing,” Benitez said. “This project allows us to prosper a little more and benefit from this micro hydropower plant.”
Louis Boigues, director of Basic Sanitation, Health Education and Alternative Energy (known by its initials in Spanish as SABES), a nongovernmental organisation, explained that the hydropower plant is the country’s first bilateral energy project.
The scheme, completed in 2010 at a cost of $150,000 was funded by the government of the Spanish region of Aragon and built with the participation of SABES, the Energy and Environment Partnership with Central America (EEP) and local community members.
It currently supplies around 50 families in both countries with the 50 kilowatts generated, but there is potential for it to produce more power, said Boigues.
“People always want projects of this kind (that are) more environmentally friendly,” he said. SABES intends to create three further similar schemes in other towns in El Salvador.
Since Central America began expanding renewable energy programmes in 2004 to reduce the economic impacts of rising oil prices and of climate change, a range of small green energy projects have been developed in Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama, using biomass, geothermal, solar and wind power.
EEP has 283 small renewable energy projects in the region such as hospitals and schools powered by solar panels and factories which use biogas or micro hydropower plants.
POTENTIAL FOR 100 PERCENT?
“Central America has the potential to meet 100 percent of its electricity needs with renewable energy, provided that the proper policies, incentives, and political support are in place,” said a study  published in June 2013 by the Worldwatch Institute.
Around 7 million of the region’s 45 million inhabitants are without access to electric power. Nevertheless, in 2012, production of electricity in the seven countries grew to 44,000 megawatt hours, an increase of 4.7 percent over 2011.
Regional banks are funding many projects, while British and Scandinavian investors are also involved.
The region’s energy is primarily hydroelectric, with much smaller contributions from geothermal, biomass and wind power. However, wind farms and geothermal energy are rapidly growing with funding from the governments of Honduras, Nicaragua and Panama.
The Inter-American Development Bank estimates that Latin America and the Caribbean have a geothermal potential of 6,000 MW, 43 percent of it in Central America.
El Salvador recently announced an investment of between $800 million and $1 billion to develop 355 MW of natural gas, the first such project in the region. Natural gas, while not a renewable form of energy, is considered cleaner than fossil fuel alternatives such as diesel fuel or coal.
“This is the biggest private investment in energy in the country’s history, (and) with this project we are securing the availability of energy for the future, with cleaner and cheaper power,” said Alexander Segovia, Salvador’s technology secretary.