El Salvador’s energy exports have experienced significant growth in recent months, with Honduras and Nicaragua being the primary destinations for the country’s energy. However, Guatemala and Costa Rica have also been making significant purchases, according to the Directorate General of Energy, Hydrocarbons, and Mines (DGEHM). The transactions reflect a constant dynamism in the Regional Electricity Market (MER), where Honduras and Nicaragua have emerged as the biggest buyers, followed by Costa Rica and Guatemala, while El Salvador and Panama demonstrate importer and exporter behavior.
The DGEHM Director, Daniel Alvarez, attributed the dynamism in exports to El Salvador’s achievement of having the most competitive prices in the region. He stated that the government’s investment in renewable energy in recent years has contributed to an increase in renewable energy generation, allowing El Salvador to be more efficient in the MER.
Alvarez clarified that exports are based on energy surpluses, prioritizing local demand. He also explained that when the country imports energy, it does not indicate a lack of generating capacity in El Salvador, but rather a shutdown of plants and importing the surplus from elsewhere.
The growth in energy exports is primarily due to El Salvador’s shift towards renewable energy, with 76% of the country’s energy being produced from renewable sources. The country has achieved this through public and private investment in constructing renewable energy plants and centers. The energy matrix of the country consists of 17.57% hydroelectric, 17.41% geothermal, 15.44% biomass, 6.91% solar, and 1.49% wind energy.
According to the Banco Central de Reserva (BCR), the energy sector grew by 14.4% in 2022, with energy exports increasing by a staggering 1,860%. El Salvador’s renewable energy generation totaled 58.82% as of March, where 34.98% was produced by the Comisión Ejecutiva Hidroeléctrica del Río Lempa (CEL) and LAGEO, according to the Directorate General of Energy.
The Salvadoran government has stated that it will continue to invest in renewable energy to maintain its position as a top energy exporter in the region. This includes constructing two new geothermal plants and the second government solar plant.
The Salvadoran energy sector’s growth is a positive sign of progress towards sustainable development and a cleaner environment, both domestically and for the wider region. The country’s efforts to increase renewable energy use have proven to be a catalyst for economic growth and a cleaner future, with Honduras and Nicaragua benefitting as top buyers of Salvadoran energy.