There is a direct relationship between the procedures to obtain an environmental license and the risk of not covering the energy demand that the country needs.
According to Alfonso González, president of the Association of Generators with Renewable Energy (Ager), a permit that could be obtained in a matter of 90 days can take six to eight months.
Their view is that the Executive does not have all the resources to be able to expedite permits, because, for example, there may be only one person responsible for addressing 50 license requests.
Also read: Country needs more energy to invest and grow
This is an excerpt from the conversation that González had with the team of Free press and Guatevision.
How do you perceive the progress of the new generating plants included in the PEG-4?
At Ager, we have been looking at the PEG-4 projects from the outside, since, in one way or another, it is not up to us to play an active role in the development of these projects.
What we do know is that some are still in the permitting and development phase and others have a certain level of progress, with some setbacks in said progress, but, in general, we understand that the PEG-4 process and the entry into operation of these new plants is going well.
What are the challenges in executing energy generation projects?
I have personally experienced the development of renewable generation projects. First, it is not necessarily a lack of information, but often there is information with bad intentions—to put it as it is—, with particular interests. And that is where developers have to go with a lot of transparency to earn the trust of a project’s neighbors.
In the end, these surrounding communities – or the neighbors – begin to understand that there is no ill will in installing a generation project in a particular place, but rather a development initiative not only for the business as such, but also for the neighbors.
Renewable energies have a particularity, and that is that we cannot invent where to put the projects or choose very precisely where to install one, because the projects are developed where the resource is. We are one of the few industries that truly go to the interior of the country to develop, to generate employment, to change the environment around where there is a project.
There are many examples where great value has been added around renewable generation projects. That is, let’s say, like the first part.
Then there are the authorities, who can also become heroes, leading and supporting these business initiatives in their municipalities, which, in return, bring a return in taxes for the mayor’s office, both in construction licenses and in the IUSI (Single Property Tax).
At the same time, they are income that is transformed into the multiplication of the economy, even if it is on a small scale within the municipality. So municipal or local authorities—including the Cocodes—can become great heroes from their communities, or they can become great stumbling blocks.
How agile is the environmental licensing and permitting process so that projects can move forward?
It’s an ordeal, that’s the right word. I believe that there is no development that does not suffer from paperwork. Now, an environmental license that could be obtained in a matter of 90 days can take six to eight months.
And here we must not only point out, but, when we go to explore a little, we also see that the entities do not have all the necessary resources; The Executive does not have all the resources to expedite permits.
So, it turns out that there is one person responsible for attending to 50 license requests. Now, whose responsibility is it to solve it? From the ministry itself. And yes, it is an obstacle, really, because it literally kicks back the start of work on any project.
Not only renewable energy generators suffer from this: it is any project that wants to be carried out with private infrastructure. So that is a part where the sense of urgency and agility should be considered within the institutions, in such a way that not only think about the procedure per se, but also the effect that delaying a work entails.
In Guatemala we have a very significant growth in demand for electrical energy consumption: it grows twice as much as the gross domestic product. Every day there is more demand, and the capacity we have installed is what it is.
The only way to cope with the growth in demand is to install new generation projects. To the extent that all the permits are further delayed and they are not given the agility that they should be given, we run the risk of water reaching our noses and returning to a time that young people did not know, but in the 80s we had electricity rationing.
So we run the risk of going to those extremes, and a lot of it has to do with the time it takes for permits.
What risks exist if projects fail to be completed on time?
The most serious risk is a shortage of electricity, and that is what worries us all. Today we are in a world where, truly, nothing can be done if we do not have electricity.
If in Guatemala the GDP grows at a rate of 3% to 3.5%, electricity consumption exceeds 7% growth. And if we do not install more electrical energy, more generation, well what is going to happen one day is that, as we chapines colloquially say, there is no electricity.
So the risk does not only affect large companies, as is sometimes thought; This is something that is going to hit all of us Guatemalans. The most basic activities are carried out with electricity, starting with education, health… You cannot provide electricity without electricity. Look at the chaos that has happened in public hospitals when they have lost power.
What are the necessary actions to expedite the construction of new energy generation projects?
The first is the promotion of more bidding processes. The bidding processes seek to attract new investment, national or international – it does not matter – but the bidding process has to motivate the installation of new electricity generation plants.
The same thing happens with energy transmission: new transmission networks must be encouraged to be installed throughout the country. If this does not happen, the same thing will happen as with traffic in the city: the transmission lines become saturated and the service will not arrive with the quality, volume or coverage that it should provide.
So, bidding processes are very important. The State must continue to promote this, and it must also continue to promote that distributors do them more frequently.
The PEG-5 is very relevant because it turns out to be the largest bidding process in the history of Central America. We are talking about awarding 1,550 MW in a single process.
Some of us believe that it could have been easier to handle it in three or four different processes. So, very quickly, leaving PEG-5, PEG-6 must come, even if it is with a much smaller volume of demand.
And the support of the authorities in the development of the projects. That is to say, they assign you a plant somewhere in the interior and you go to see how to solve community, social problems, the absence of the State, with the municipalities, the local authorities.
Of course it is our responsibility to solve it, but also the State’s. If the State does not actively participate, together with us, to ensure that the projects go ahead, the impact will be felt by the entire population.