Panama finished 28th among Climatescope nations for 2014 with a score of 1.11. Compared solely to Latin American countries, it ranked 13th.
Panama is one of the fastest growing economies in the region, posting an average 8% GDP annual growth rate over the past five years. Electricity demand has grown accordingly and the need for new, non-hydro sources of generation has become more apparent in light of a serious drought in 2013.
Small hydro remains the country’s flagship clean energy sector with 195MW of installed capacity. The technology also accounted for 87% of the $1.2bn total invested in clean energy since 2006. Panama now has a strong pipeline of wind projects under development. Once online, these should significantly boost clean energy’s share of the power generation matrix.
Panama uses tenders to contract renewable capacity and in 2011 and 2013 held two such reverse auctions for wind power contracts. Its first solar-specific tender is expected in 2014. Renewables are likely to face significant competition from natural gas in Panama as the country also has plans to add 1GW of new gas capacity by 2026 as well.