Honduras and biomass

Official Name: Republic of Honduras.

Summary: With an economy largely tied to the United States, Honduras is the second-poorest country in Central America. Its primary energy source is biomass, while hydropower, fossil fuels, and imports are also used for electricity.

Honduras is the second-poorest Central American country. Its traditional dependence on coffee and bananas for export has broadened, but its economy remains strongly tied to the United States, which was its largest trading partner in the early 2020s. Despite the Central America Free Trade Agreement (CAFTA) in 2006, internal problems including crime, corruption, and instability have limited foreign investment, though direct foreign investment by US firms totaled $1.4 billion in 2022. Poverty affected 52.4 percent of the population that same year. As of 2021, 25 percent of Hondurans lacked access to electricity.

A staple source of energy has long been firewood, agricultural waste, and other biomass. In 2021, biofuels and waste handled 33.7 percent of the total energy demand, with coal and oil covering more than 52 percent, sources like wind and solar energy accounting for 8 percent, and hydropower a mere 5.6 percent. More than 39 percent of energy used in 2021 was for residential purposes; transportation took 35.8 percent; and industry took 14.4 percent. Honduras remains around 50 percent dependent on fossil fuels it has to import. The United Nations lists Honduras as one of the countries most vulnerable to the negative impacts of climate change, primarily due to poverty and underdevelopment. Drought is a recurring problem already

Electricity Production

In 2020, Honduras generated 10,038 gigawatt-hours of electricity. Consumption in 2021 was 52 terawatt-hours, and the country seemed self-sufficient, unique for a Central American nation. In 2021, Honduras produced an estimated 12.01 terawatt-hours of electricity.

In 2023, Honduras had an estimated 3,159 megawatts of installed capacity. One important source of this installed capacity was hydropower. It had two major hydroelectric plants, at El Cajon and Cañaveral-Río Lindo. A fire at El Cajon in 1999 disrupted 60 percent of the country’s power supply, forcing rationing for half a year. In 2007, the US embassy in Honduras reported that Honduras was approaching an electricity crisis because of insufficient capacity, overreliance on expensive bunker fuel, management and turnover problems in Empresa Nacional de Energía Eléctrica (ENEE), and reluctance to increase rates to a level that matched costs.

ENEE was losing $200 million a year, and within five years it would take all of Honduras’s borrowing capacity. Honduras needed an additional 250 megawatts by 2009 to meet demand, perhaps as much as 380 megawatts by 2010, absent improved efficiency. Either ENEE needed to provide a 20–30 percent increase within three years, or Honduras would face brownouts or blackouts. Some worried industrialists built their own power plants just in case. The government sought to contract for 20 megawatts of capacity in 2007, but suppliers said that they could not meet the government price, and ENEE persisted in paying more for electricity than it recouped. The situation did not improve. A new government took over in 2009, but problems in Honduras' energy sector continued. Between 2010 and 2014, conflicting interests between political-entrepreneurial groups like politicians, private electricity generators, banks, and labor unions led to the signing of numerous contracts for electricity generation, resulting in an installed capacity of about 4,023 megawatts—much more than was needed. The majority of these contracts were handed out to renewable energy companies, which meant that private actors dominating the energy sector benefited from corrupt one-sided government deals. On the other hand, while this approach continued to cause problems for Honduras' energy sector, it also helped the nation become Latin America's largest producer of solar energy. Even so, Honduras still struggles with a complicated energy sector that lacks proper planning and regulation.

Oil and Natural Gas

Honduras has no proven oil or natural gas reserves, and it consumes no natural gas. In 1991, Honduras spent $143 million, or 13 percent of total export earnings, on imported oil, 16,000 barrels a day. In 2016, it consumed 58,000 barrels of oil a day and produced none.

US companies have been exploring for oil since 1955, and Texaco began refining petroleum derivatives at Puerto Cortes in 1968, exporting them to the United States and Belize. The Puerto Cortes refinery closed in 1993. The consortium, which includes the Venezuelan national oil company, Cambria Oil, and Texaco, merely opened the Puerta Castilla refinery in 1993. Although speculation has long been that the Rio Sula Valley and Caribbean coastal waters are likely to have substantial oil deposits, various governments have shown little interest, which has kept the oil consortium from actively pursuing exploration.

Honduras, as of 2016, had thirty carbon emission reduction projects listed with the natural resource and environment ministry. Fifteen projects produced $2.4 million in certified emission reduction (CER) credits in 2009. The worldwide CER market was $126 billion that year. Nine of the projects were for the generation of hydroelectric power, three captured methane gas, and three produced biomass. Honduras has still more untapped potential in wind, biomass, and hydropower. In 2022, Honduras's annual carbon dioxide (CO₂) emissions totaled 11.16 million tons.

In January 2011, Honduras was preparing to begin construction of its first wind energy plant, the largest in Central America, a wind farm with 51 turbines capable of generating 100 megawatts. With construction estimated to take 18 months, the project was undertaken by a local subsidiary of Mesoamerica Energy. Funding of $250 million came from the US Export-Import Bank and the Central American Bank for Economic Integration. The National Electricity Company contracted to take the energy for 20 years. The wind farm, operated by Terra Energy in San Marcos de Colón, started operations in 2015 with 25 turbines and a capacity of 50 megawatts. By 2023, Honduras had five wind farms and a total operational wind capacity of 228 megawatts.

In 2011, Honduras signed an agreement with Sinohydro to build the Patuca III power plant for $50.5 million. The plant was one of three planned for the river. After years of funding issues, it finally began commercial operations in 2020. As hydropower capability grows, dependence on imported petroleum shrinks.

Bibliography

“Honduras.” CIA World Factbook, 2024, www.cia.gov/library/publications/the-world-factbook/geos/ho.html. Accessed 2 Aug. 2024.

“Honduras: 50 MW Wind Farm Starts Operations.” CentralAmericaData.com, 16 Feb. 2015, www.centralamericadata.com/en/article/home/Honduras‗50‗MW‗Wind‗Farm‗Starts‗Operations. Accessed 2 Aug. 2024.

“No Money for Hydroelectric Station Patuca III.” CentralAmericaData.com, 8 Apr. 2015, en.centralamericadata.com/en/article/home/No‗Money‗for‗Hydroelectric‗Station‗Patuca‗III. Accessed 2 Aug. 2024.

Pena Flores, Gustavo. “The Honduran Electric Sector Debacle.” ReVista, 6 Feb, 2024, tonto.eia.gov/cfapps/country/country‗energy‗data.cfm?fips=HO. Accessed 2 Aug. 2024.

Regulación Eólica con Vehículos Eléctricos. “The First Wind Energy Plant in Honduras.” Spanish Wind Energy Association, January 20, 2011, www.evwind.es/noticias.php?id‗not=9675. Accessed 2 Aug. 2024.