Panama’s electricity consumption in 2021 comprised a significant amount of low-carbon energy, largely sourced from hydropower which accounted for almost 7.2 TWh. Low-carbon energy in total was approximately 8.33 TWh, making up a large portion of the country's electricity generation. On the other hand, fossil fuel sources only represented about 2.86 TWh of the electricity generated. In comparison with the global average electricity use per person (410 watts), Panama's consumption is relatively low. This by itself may have a couple of potential implications, such as less strain on energy infrastructure or lower per capita contributions to global greenhouse gas emissions.
To increase its low-carbon electricity generation, Panama could learn from countries that have significantly advanced in this area. Taking into account Panama's geographical features and climate, the country could increase its efforts in utilizing wind energy, emulating countries like China and the USA, with 941 TWh and 423 TWh respectively, in wind energy generation. The substantial solar energy production in countries like China (531 TWh) and India (119 TWh) also stands as potential models for Panama. Countries like Brazil, generating 94TWh of wind energy, could serve as a benchmark for Panama being a fellow Latin American nation with similar climate conditions.
The history of low-carbon electricity generation in Panama majorly revolves around the production of hydropower. This journey commenced in 1978 with an increase of 0.4 TWh in hydroelectric generation and continued into the 1980s with notable growth. However, the decade saw some fluctuations, with increases in 1981, 1984 and 1985 and a decrease in 1998. The first decade of the 21st century reflected similar volatility, with notable surges in 1999, 2002 and 2004 followed by reductions in 2001 and 2003. The latter part of the 21st century saw more stability, even with significant hydroelectric generation growth in 2012, 2015, 2017, and 2020. A considerable event in 2015 was the introduction of wind energy, marking an important step towards diversifying Panama's low-carbon energy sources. Adverse changes occurred in 1998, 2001, 2003 and significantly in 2019 with a decrease of 2.8 TWh in hydropower, pointing to the susceptibility of this energy type to certain environmental and infrastructure challenges.