Electrical Power Equipment

An Expert's View about Electricity Generation and Distribution in Panama

Posted on: 26 Apr 2012

Panama has an installed capacity of approximately 2,000 MW, over 50% of which is
hydropower. Since Panama experiences a dry season, it supplements hydropower with
thermal generation, primarily fuelled by bunker. The net cost to end users is approximately
$.12/kW h, much of which is attributable to generating costs. Panama is seeking to lower this
cost, as well as smooth out the supply, in order to increase its competitiveness for foreign
direct investment. For comparison with electricity rates in other countries, including the
U.S., please refer to the U.S. Department of Energy’s Energy Information Administration
table: http://www.eia.doe.gov/emeu/international/elecprih.html.
Panama’s demand for electricity is growing by approximately 50 MW per year. The growth of
the construction sector has generated a steady demand for electricity in the last 5-7 years.
This growth is expected to continue during the next few years driven by the projected
increase in low cost housing construction and the implementation of a number of
infrastructure projects, including the expansion of the Panama Canal. The electric sector in
Panama is controlled by the private sector with the exception of the transmission company
which is fully owned and operated by the government.
The Panamanian market is very receptive to U.S. electrical power equipment. Its high
quality, durability, competitive prices, quick delivery and service capability are the main
factors behind this preference. Price and quality are the main factors in selecting equipment
suppliers, followed by after-sale service, which includes technical assistance.
Competitors come principally from Sweden, Italy, Brazil, Germany and England. Panama has
no particular standards and regulations for power generation equipment. All U.S. made
equipment is readily accepted in Panama.

Sub-Sector Best Prospects
The market offers excellent opportunities for both hydroelectric generators, especially small
and medium size plants, and thermo generators. There is strong interest by several
companies to develop non-traditional energy sources and the government is expected to play
a stronger role in promoting the use of these technologies. The U.S. Trade and Development
Agency (USTDA) published a report in March 2010 on renewable energy projects in Central
America, including Panama, which provides more specifics. To view this report, please click
on the following link: http://buyusainfo.net/docs/x_827397.pdf.

The Government of Panama passed Law No. 45 of August 4, 2004 to provide a number of
incentives for the construction and development of new electric generation plants, especially
hydroelectric plants (up to 20 MW) and other clean energy sources. Also, a new law to
promote wind power generation was passed in 2011.

Read the full market research report

Posted: 26 April 2012

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