Description

Nicaragua finished 14th out of the 55 countries assessed for Climatescope 2014, with a score of 1.37. The relatively small $11bn

GDP economy beat out much larger countries, including Nigeria and Argentina. Among the 26 LAC countries in the index, it finished in 8th position and would have fared even better had clean energy investment there not fallen from its 2012 peak. The country was also negatively impacted by a re-weighting of the parameters of Climatescope 2014 from prior years. The change increased the importance of clean energy value chains in the overall score.

The country has the smallest power sector in Central America, at 1.3GW of installed capacity, and is connected to its neighbors through the regional electricity market. It has one of the highest clean energy penetration rates in the region, with 39% of its national capacity coming from geothermal (12%), wind (11%), biomass (11%) and small hydro (5%). Nonetheless, it relied on oil and diesel for almost half the 4TWh generated in 2013, showing that there is still considerable potential for clean energy to make further inroads.

Nicaragua has attracted $1.6bn of clean energy investment since 2006. Last year, in 2013, there was a significant decline to $129m, from $290m the year before. Such fluctuation is not surprising given the small size of the power sector. Looking ahead, the government has an ambitious plan to almost double its clean energy installed capacity (including large hydro) in the next 15 years, and to shift away from thermal generation towards a renewable energy-based system.