Politics, Business & Culture in the Americas

Drought Forces Electricity Rationing in Panama

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A four-month drought has crippled Panama’s electricity supply, prompting the government to close schools and impose strict limits on electricity use on Wednesday—a day after declaring a state of emergency in four of the country’s nine provinces.

In addition to closing schools, new restrictions curtail operating hours for late-night businesses such as supermarkets, bars and restaurants, forcing them to close between 10:00 p.m. and 6:00 a.m. Wednesday’s restrictions come after orders on Monday for businesses to cut air-conditioning use by four hours each day, among other measures.

Current restrictions will last through Sunday, when officials will determine whether the electricity supply will allow for a loosening of restrictions and re-opening of schools next week.  However, a rainless forecast hints of little relief in the coming days. 

Panama relies on hydropower for 60 percent of its electricity supply and the dry-spell that began in December has dried up two of the largest basins that feed hydroelectric plants.

In recent years, electricity demand has grown sharply.  Between 2011 and 2012, electricity consumption increased nearly 6 percent, according to government statistics, yet supply has hardly grown.

Panama is Latin America’s fastest growing economy with growth exceeding 10 percent in 2012, according to the government.  This growth has resulted in the construction of new business, office buildings and shopping centers throughout the country, taxing the energy supply.

Officials hope current measures will cultivate more conservative energy use even after the restrictions are officially lifted.  Besides emergency restrictions, Panama has focused on diversifying its electrical grid to incorporate more geothermal sources of electricity to complement existing hydroelectric sources.  It is also pursuing initiatives to integrate its electricity grid with other countries in the region, including an ambitious project to connect the transmission networks of six Central American countries and a separate bilateral effort that would link Panama and Colombia with one large power line.

The drought and power rationing have not affected trade on the Panama Canal, which produces its own energy.

Tags: Energy efficiency, Hydroelectric
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