In 2016, renewable energy in Costa Rica provided about 98.1% of the nation's electrical energy. The country imported 807,000 MWh of electricity, which met 8% of its annual needs. In 2014, fossil fuel energy made up 49.48% of total energy use, and oil demand had increased in recent years. That same year, 99% of Costa Rica's electricity came from renewable sources, with about 80% from hydroelectric power. For the first 75 days of 2015, all of the country's electricity was from renewable sources. By mid-2016, this achievement lasted for 110 consecutive days, even during challenging weather conditions.
In 1948, Costa Rica ended its military, which saved millions of dollars from the defense budget. These funds were used to support healthcare, education, and environmental protection. At that time, President José Figueres stated that the former military budget would be redirected to improve these areas.
Costa Rica has natural advantages for producing renewable energy. Its high number of rivers, dams, and volcanoes per person allows for strong energy output. The country also receives an average of 2,926 mm of rainfall per person each year, making it the fourth highest in the world for rainfall per person. As a small nation with 5 million people and no major industries, Costa Rica requires less energy infrastructure than larger, more densely populated countries. While hydroelectricity is the main energy source, other types include geothermal energy, biomass, solar power, and wind power.
Energy consumption in Costa Rica
The commercial use of energy in Costa Rica has increased three times between 1980 and 2009. Electricity use has grown by 4.2 times because more people have access to electricity. According to the World Bank, 99.5% of the population in Costa Rica has electricity. At the same time, the use of fossil fuels has grown by 2.4 times because there are more motor vehicles in the country.
Over the past 20 years, the average yearly growth of fossil fuel use has been about 4.7%, and electricity use has grown by 5.3% each year. At these rates, electricity demand is expected to double in 13 years, and fossil fuel demand in 15 years. In 2009, Costa Rica relied on fossil fuels for 64% of its commercial energy and electricity for 22%. The remaining energy use came from biomass (12%) and other energy products (2%). According to the World Bank, in 2013, the energy use per person in Costa Rica was 1029 kilograms of oil equivalent, and the electricity use per person was 1955 kilowatt-hours.
Energy organizations
The Ministry of Environment and Energy of Costa Rica (MINAE) is the government group responsible for managing the country's environmental and energy resources. In May 2014, President Luis Guillermo Solis Rivera appointed engineer Irene Cañaz Díaz, a former consultant with the Deutsche Gesellschaft für Internationale Zusammenarbeit, as Deputy Minister of Energy. According to MINAE's goals, Costa Rica's energy plan focuses on using energy more wisely, reducing reliance on international markets, and preparing for climate change and the decline of oil supplies. The Viceministry of Energy includes three main departments: Sectoral Energy, Hydrocarbons and Transportation, and Fuels Marketing.
The Sectoral Energy Department (Dirección Sectorial de Energía, or DSE) is responsible for creating and promoting energy planning that ensures a reliable and high-quality energy supply in Costa Rica. One of its main tasks is to develop the National Energy Plan, which considers the country's National Development Plan and the needs of the Ministry of Environment and Energy.
The Costa Rican Institute of Electricity (Instituto Costarricense de Electricidad, or ICE) was established on April 8, 1949, as an independent, government-owned organization to address electricity shortages in the 1940s. Since its creation, ICE has managed the country's electrical development. In recent years, ICE has grown into a corporation called Grupo ICE, which includes other public companies such as "Radiográfica Costarricense" (RACSA) and the National Company of Power and Illumination (Compañía Nacional de Fuerza y Luz, CNFL).
Grupo ICE primarily uses hydroelectric power to support its operations but has also built and continues to build geothermal, wind, and solar energy projects. The organization employs over 15,000 people and has customer service offices throughout the country. Although large-scale hydroelectric power began to develop after the formation of Grupo ICE, the first major hydroelectric station started operating in the early 1900s.
The Costa Rican Petroleum Refinery (Refinadora Costarricense de Petróleo, or RECOPE) is a government-owned company and the largest in Central America. Established in 1963 and nationalized in 1974, RECOPE focuses on importing and distributing fossil fuels in Costa Rica. In research, RECOPE operates an experimental biodiesel plant and partners with public universities and research centers to develop alternative fuels such as biofuels, natural gas, and hydrogen.
In 2011, RECOPE's board of directors signed a partnership with Ad Astra Rocket Company, an American rocket propulsion firm with facilities in Costa Rica, to research hydrogen technologies for transportation. The project had three phases: Phase A (2012, focused on feasibility studies and hydrogen storage design), Phase B (2013, designing storage systems), and Phase C (developing an integrated hydrogen energy system). However, the research stopped in 2014 when RECOPE's new leadership decided not to continue, citing concerns about its legal authority to invest in clean energy. In March 2015, Dr. Franklin Chang Diaz, CEO of Ad Astra and a former Costa Rican-American astronaut, announced the end of the partnership due to delays and lack of direction. This decision led to strong criticism from the public and media against RECOPE's board and other government groups involved.
The Asociación Costarricense de Productores de Energía (ACOPE) was founded in 1989 and represents over 40 private companies that generate electricity from hydroelectric, wind, and biomass sources in Costa Rica. Most private energy companies in the country sell power to ICE.
The Consorcio Nacional de Empresas de Electrificación de Costa Rica (Conelectricas), formed in 1989, is a group that works to develop hydroelectric projects. It includes four smaller agencies: Coopeguanacaste, R.L., Coope Alfaro Ruiz, R.L., Coopelesca, R.L., and Coopesantos, R.L. Together, these groups provide electricity to about 500,000 people, or 22% of the country. Conelectricas operates the San Lorenzo Hydroelectric Center and the Sigifredo Solís Solís Hydroelectric Center in San Ramón.
The Asociación Costarricense de Energía Solar (ACESOLAR) is a nonprofit organization that aims to promote the use and development of solar energy in Costa Rica. It works with both private and public groups involved in the energy sector.
2017: 300 days of renewable energy
In January 2017, Costa Rica's population of 4.9 million people used only renewable energy for 75 days. This was a record because Costa Rica became the first country to rely completely on clean energy without using fossil fuels for such a long time. During the summer, Costa Rica experienced very heavy rainfall. Usually, this time of year is dry, but the unusual amount of rain increased the amount of hydroelectric power produced.
Carbon neutrality
In 2007, the government of Costa Rica, led by former president Oscar Arias Sánchez, announced a goal to make the country the second carbon neutral nation in the world (the first was Bhutan) by 2021. This year also marks 200 years since Costa Rica gained independence from Spain. The plan was officially shared with the United Nations Framework Convention on Climate Change (UNFCCC) in 2010. Future governments, including those of President Laura Chinchilla Miranda and Luis Guillermo Solís Rivera, continued to support this goal. The aim is to reduce the country’s carbon footprint to no more than 1 ton of CO2 emissions for each person.
Costa Rica plans to produce 100% of its electricity from carbon neutral sources by 2021. Currently, the country relies on 99% renewable energy, such as electricity from wind, water, and the sun. To reach carbon neutrality, the government will also promote electric and hybrid vehicles. Additional steps include new laws, budget changes, and incentives to support biofuels, hybrid cars, and clean energy. A "C-Neutral" fee will be used to ensure that industries, such as ecotourism, balance their carbon emissions. At $10 per ton of carbon, this money will help fund conservation, reforestation, and research.
The plan requires replacing fossil fuel energy with cleaner technologies and improving transportation. Transportation is responsible for 66% of the country’s fossil fuel emissions and 54% of total CO2 emissions. To reduce these, the government will promote electric vehicles, biofuels, hybrid cars, hydrogen vehicles, and public transportation. About 41% of transportation emissions come from private vehicles, according to the government. These changes could save the country between $1.5 and $2 billion each year. To meet the goal, Costa Rica must also improve waste management and agriculture, as these areas contribute large amounts of greenhouse gas emissions.
In recent years, private companies have helped by adopting energy efficiency policies and creating low carbon certifications. The National Institute of Technical Norms of Costa Rica (INTECO) has set rules for businesses to follow in order to earn carbon neutral certification.
Regulatory framework
The energy policy of the current administration focuses on using energy in a way that is sustainable and reduces pollution. The "VII Plan Nacional de Energía 2015-2030" was created based on the goals of the National Development Plan 2015-2018 and the government plan of President Luis Guillermo Solís Rivera.
This plan has five main goals: 1) changing the National Power System to improve energy efficiency, save energy, and better manage electricity use; 2) supporting the growth of electricity produced close to where it is used and electricity that is used by the people who generate it; 3) updating laws and rules that help promote energy efficiency; 4) improving how electricity prices are calculated; and 5) making public electricity organizations work more efficiently.
For the transport sector, the national energy plan also includes goals to promote cleaner public transportation systems and encourage the use of fuels that do not harm the environment. These goals aim to reduce reliance on oil, lower pollution, and improve rules for importing vehicles to increase energy efficiency and reduce pollution.
The National Development Plan of Costa Rica 2015-2018 sets energy policy goals: 1) to take action against climate change by involving citizens, using new technology, and improving research to ensure the country’s safety and competitiveness; and 2) to meet the country’s energy needs using a mix of energy sources that guarantees a steady supply of electricity and fuels while promoting efficient energy use.
Private electricity projects are regulated by Law 7200, approved by Costa Rica’s Legislative Assembly in 1990. Private companies provide about a quarter of the electricity generation capacity and 10% of the electricity produced in the country. However, there is still debate about how much private involvement should be allowed in the electricity market.
By 2013, private companies provided about 14.5% of the total electricity generated and 23% of the electricity system’s installed capacity, according to ICE. Law 7200 allows ICE to buy electricity from private companies in two ways. Chapter I explains the rules for autonomous or parallel electricity generation, which includes BOO (Build, Own, and Operate) contracts. Article 7 of the law says ICE can approve projects for small electricity plants, as long as they do not exceed 15% of the total electricity produced by the national system.
Chapter II explains the rules for competitive electricity generation, which includes BOT (Build, Operate, and Transfer) contracts. Article 20 allows ICE to buy electricity from private companies up to an additional 15% of the limit in Article 7. This includes electricity from sources like hydro, geothermal, wind, and other non-traditional energy sources, in amounts up to 50,000 kW of power (as added by Law 7508 in 1995). By 2014, ICE had 25 BOO contracts and 9 BOT contracts.
Although some politicians want private companies to play a larger role in the electricity market to lower costs, ICE argues that its current expansion plans will meet the country’s needs for 20 years and that its energy costs are already among the lowest. ICE says the country will need 850 MW of electricity by 2020, and all of this is already planned through ongoing projects.
Despite having many renewable energy resources, more than 25% of Costa Rica’s land is protected, limiting access to some renewable sources, such as geothermal energy in national parks.
In 2016, the Legislative Assembly of Costa Rica discussed a proposal that would allow ICE to use geothermal energy in protected areas. The proposal, called Project 19.233, was introduced by Ottón Solís, a member of the Citizen Action Party. Under this plan, ICE would use land outside of protected areas to compensate for land used in geothermal projects. The proposal focuses on areas like Rincón de la Vieja, Tenorio, and Arenal Volcano national parks. Some activists worry that the environmental rules managed by the National Technical Bureau of Environment (SETENA) are not strong enough and that geothermal exploration methods are similar to those used in oil and mining.
In June 2015, the Minister of Environment and Energy, Edgar Gutiérrez Espeleta, said that MINAE is not currently planning to use geothermal energy in national parks and will wait for more research on how it might affect the country’s environment and wildlife before making a decision.
Conflicts
The biggest problem in achieving carbon neutrality is the transportation sector. Vehicles use 70% of the petroleum in the country, which makes up 40% of all carbon emissions. Most public transportation in Costa Rica uses diesel-powered buses. Over 50% of the country’s personal passenger cars are more than 20 years old and have engines that produce a lot of pollution. However, the government is starting to suggest new programs for hybrid and plug-in electric vehicles. The current rail system is only in the Central Valley and is not powered by electricity. Other ideas to improve transportation include upgrading the rail network (including adding electricity), building gondolas (Tiquisia 3S Gondola Mesetransporte), and using trolleys in the Central Valley.
Hydroelectric power from dams is a strong energy source, but it depends on weather conditions. It needs enough rainfall to work, so it is not reliable during dry seasons. In 2014, after a very dry season, Costa Rica had to use diesel generators because the dams could not produce enough electricity.
Solar energy also depends on weather and is used less than hydroelectric, wind, or geothermal energy.
A major challenge for geothermal energy is that many volcanoes are in national parks and protected areas, which makes it hard to build facilities near them. For example, Rincon de la Vieja has the potential to produce a lot of geothermal energy, but laws in Costa Rica stop resource extraction in national parks to protect the land. Hydroelectric dams have also faced criticism for harming ecosystems and displacing people. They can affect fish migration, water quality, and cause flooding that harms land.
The Pirrís dam caused controversy because it forced people, including indigenous communities, to leave their homes. While dams create jobs, they also move many people from their land.
The El Diquís Hydroelectric Project is one of the most important projects for the Instituto Costarricense de Electricidad. It will be the largest hydropower dam in Central America and is designed to provide stable electricity to Costa Rica. The project will produce 655 MW, totaling 3050 MW. Its reservoir will cover about 7,407 hectares (900 hectares in indigenous protected lands), and its tunnel will be more than 11 kilometers long with a 9-meter diameter. The project will require seven communities to relocate, affecting over 1,000 families. The total cost is expected to be about $2 billion.
The project’s size and its effects on local people have raised concerns. Activists have taken legal action, protested, and tried to cut communication with the government and Grupo ICE. The Diquís reservoir is expected to flood 10% of the China Kichá territory (104 hectares) and 8% of Térraba land (726 hectares).
The project is currently in the pre-investment phase, but its impact on indigenous cultures and the environment has led the United Nations Committee on the Elimination of Racial Discrimination (CERD) to become involved since 2011. CERD reminded Costa Rica of its duty to consult with affected indigenous communities. Costa Rica responded to the U.N., explaining the project’s status and stating that construction had not started.
In July 2015, an association representing indigenous communities filed a $200 million lawsuit against ICE and the Costa Rican government, claiming environmental damage from early exploration work. The court dismissed the case.
In October 2016, after a meeting with government officials failed, indigenous leaders and local leaders reaffirmed their opposition to the project. The government said it was working on a decree to improve the consultation process, which was expected by January 2017.
In November 2016, Costa Rica’s Constitutional Court ruled that Article 8 of a presidential decree, which allowed ICE to use materials in areas with indigenous communities, was unconstitutional.
On November 2, 2018, ICE indefinitely paused the Diquís project.