My Contact:
Mr. Adolfo Quesada
Trade Commissioner
San Jose, Costa Rica

Costa Rica’s clean energy sector profile


Costa Rica had electricity coverage of 99.4% of its territory, of which 95% is from clean energies. However, according to the Law, ICE (Instituto Costarricense de Electricidad) the Costa Rican Public Electric Utilty is guaranteed the decisions about who can produce and sell electric power, in a way that allows that entity to keep monopolistic practices.

According to this legislation, there are several private operators that produce and distribute energy.  Electricity demand is guaranteed by 2026 so ICE will not make more investments in the short and medium term. After this year, investments by ICE in wind and solar plants are planned.

Costa Rica rated at 14 (out of 127 countries) in 2017 for energy access and security according to the World Economic Forum´s Global Energy Architecture Performance Index.

CR Energy Sector Indicators 2017

Total Installed capacity (Mw): 3.530 (70% generated by ICE, 20% by private means)

Peak Demand  (Mw): 1692.8

Total generation (GWh): 11.210

Electric Energy Electric Energy Distributors: 8 

The National Electric System (SEN) is comprised of 3 systems:

  1. Generation
  2. Transmission
  3. Distribution

All the systems of the SEN are completely interconnected in one single transmission system.

ICE and 7 other interconnected institutions are in charge of the distribution system. ICE and its subsidiaries  are responsible for the energy distribution throughout the whole country.

ICE 41.7%, its subsidiary: Compañía Nacional de Fuerza y Luz (CNFL) -National Company of Light and Power (36.15%-, two municipal companies: Empresa de Servicios Públicos de Heredia (ESPH) -Public Services Company of Heredia- (5.9%), Junta Administrativa de Servicios Eléctricos de Cartago (JASEC) -Administrative Board of Electric Services of Cartago- (6%) and four cooperatives: Coopealfaro (0,3%) , Coopesantos (1.1%), Coopelesca (4.7%) and CoopeGuanacaste (4.3%).

In Addition, chapter 1 and 2 of law 7200 allows the private sector to generate power in two ways: one by BOT (Building Operate Transfer) and BOO (Building Own and Operated).

The energy matrix, per subsector is operated by 522 different plants, broken down by source as follows:

Energy generation matrix 2017, by plant
CompanySourceOperating plants
ICE, CNFL, Coopelesca, Coopeguanacaste, Coneléctrica, JASEC, ESPH, *BOT, *BOOHydro150
ICE, Coopelesca, Coopeguanacaste, Coneléctrica, Coopesantos, JASEC, ESPH, BOT, BOOWind325
Coopelesca, Coopeguanacaste, BOTSolar11
ICE, BOTGeothermal7
Total Plants522

*Bulding Operated Tranfer/Building Own and Operated
Source: 2017 CENCE Report

Subsector identification

Renewable energy

The Hydroelectric contributes 66% of the SEN, with 150 existing electrical plants. In 2021 three hydroelectric plants from private developers will enter into operation. Most important actors are: ICE, CNFL, Conelectrica, ESPH, Coopelesca, Jasec, P.H. Río Volcán, Cïa. Hydroelectric doña Julia. The Geothermal contributes 6% of the SEN, with 7 existing electrical plants. In 2026, the 55 MW Borinquen 1 geothermal project will come into operation. Climate change will affect the availability of most renewable energy sources, with the exception of geothermal energy.

Thermal energy contributes in less than 1% to the SEN with 25 existing electrical plants. The country's electricity generation in recent years has been almost 100% renewable. However, the installed thermal capacity is an essential element to ensure the backup capacity of the system in critical hydrological periods. The wind energy contributes 11% of the SEN with 325 existing electrical plants. Most important actors: CNFL, Coopesantos, Costa Rica Energy Holding, Inversiones eólicas Campos Azules, Inversiones Eólicas Guanacaste, Molinos de Viento del Arenal, Fila de Mogote.

The biomass contributes 1% of the SEN, with 4 existing electrical plants. Most important actors: Ingenio Taboga, Azucarero El Viejo. With regard to solar energy, the installed capacity of photovoltaic systems was 23 MW in 2017 and was the fastest growing renewable energy. In 2010, the installed capacity of this energy was 0. The total energy amount that did not get withdrawn from the national generation system was a total of 50 GWh. There is a strong trend of installation of photovoltaic systems and other systems that reduce the electric bill. Currently it contributes about 1% to the country's energy matrix with 11 existing electrical plants. Most important actors: Coope-Guanacaste, ICE. With respect marine energy source, it has not been developed in Costa Rica. It is just in the phase of study by universities and ICE.

From 1990 to 2006, electricity demand grew at an average annual rate of 5.5%. From 2007 on, the growth rate decreased and became negative in 2009. Several aspects contribute to the modification of the growth rate of the demand, among them are: change in consumption patterns of the population, distributed generation, energy efficiency policies, migration of the manufacturing process industry to services and the economic contraction. Electricity demand projections for the period 2018-2040, the average annual growth rate will be 1.9%.

ICE contributed to total generation with 66%, the private generators with 24%, and the remaining 10% was produced by the distribution companies such as BOT and BOO according to the Expansion Plan of Generation 2018-2034, showing a positive exchange result of 191 GWh, being the exports of 741 472,58 GWh  and the importations of 550 633,6 GWh.

In terms of taxes and given the support of the government to promote clean energy, there are tax exemptions and tax incentives for all energy-efficient appliances in energy consumption, as well as for the generation of clean energy equipment such as solar panels and even for electric cars.

The National Electric System identifies four major areas of consumption: residential (38%), industry (21), general 36%, high voltage 2% (more than 50 MW) and public lighting 3%.

The private generators are managing 33 different projects, of which 21 are hydroelectric (77,4%), 10 are wind projects (11.49%) and 2 are biomass (0.78%).


Sector Challenges

Definitely, the monopoly granted by the law to ICE limits, among other things, the attraction of foreign investment in the field of electric generation. In order to change that situation, the government must make adjustments to the 7200 law since an investor has limited investment possibilities, in addition to the decision of ICE not to make more investments in energy in the next eight years, considering the demand satisfied and the growth in demand of 1.9% projected to 2040.

Other aspects that require monitoring for possible impacts on the electricity demand are the changes in the patterns in the use of liquefied petroleum gas (LPG); which is possible given the relative high price of electricity; distributed generation and other applications of self-consumption technologies and the use of electric vehicles. Preliminary estimates show that there would be significant changes in the demand when the vehicle fleet exceeds 20,000 vehicles.

Recent Developments and outlook

The energy sources that project greater growth in the upcoming years are: Solar, wind and geothermal. As can be seen from 2021, no more hydroelectric plants will be built. Based in that premise was presented the Generation Expansion Plan 2018 – 2034 such as a follows:

Wind plants280 MW
Geothermal165 MW

Source Plan de Expansión de la Generación 2018-2034, ICE-Source: Generation Expansion Plan 2018-2034, ICE

Renewable energy projects in the pipeline

In short, the Expansion Plan of the Electricity Generation 2018 - 2034 ensures that the country is guaranteed the attention of the electricity demand for the next eight years, based on a matrix of renewable, reliable and diverse generation. With the installed capacity of the generation park in operation, the projects that will go online in the next two years, and the Borinquen 1 geothermal project of 55 MW, which would be online in 2026, will be enough to meet the national demand until that year, consolidating a national electric model based on renewable sources, which has ruled out large projects that were included in previous estimations.

Likewise, the operational exit of the Barranca and San Antonio thermal plants is scheduled after 40 years of operation, given the high cost of operations.

Despite the efficiency that has been achieved with the new technologies applied to clean energy, we could ensure that one of the weaknesses the clean energy sector faces is the climate change, except for geothermal energy.

Market opportunities

One of the opportunities looming on the horizon in the short term, is the infrastructure needing to change gradually, the vehicle fleet, operated with fossil fuels, to one operated with clean energies, since it is a priority recognized by the Government and whose development is scarce.

After 2026, it is foreseen the entry of new energy plans that have not yet been assigned. By 2028, a 50 MW wind plant and a 50 MW solar plant. Then, for 2029, it is envisaged that there will be two more plants, a wind power of 50 MW and a solar plant of 100 MW.

Key contacts

(506) 2246 5618

(506) 2233-4533 / 2257- 0922

(506) 2258 4141

(506) 800-363-7442

(506) 2562 3774

(506) 25406800

(506) 2681-47-00

(506) 2546 2525

(506) 2484-0300

Related links

Prepared by: Adolfo Quesada, Trade Commissioner at the Canadian Embassy at San Jose, Costa Rica.

Date: August 01, 2019

Disclaimer: The Government of Canada has prepared this report based on primary and secondary sources of information. Readers should take note that the Government of Canada does not guarantee the accuracy of any of the information contained in this report, nor does it necessarily endorse the organizations listed herein. Readers should independently verify the accuracy and reliability of the information.

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