In 2021, Panama's electricity generation was largely dominated by low-carbon sources, specifically hydropower, which contributed 7.2 TWh to a total low-carbon generation of 8.33 TWh. In contrast, energy generated from fossil fuels was significantly lower, at 2.86 TWh. Despite leaning significantly towards clean energy, Panama's total electricity generation per capita was below the global average of 410 watts per person. Predominantly relying on hydropower comes with its own set of challenges, including the vulnerability to changing rainfall patterns due to climate change. Lower levels of electricity generation could potentially hinder economic development and limit access to essential services.
To boost its low-carbon electricity generation, Panama could consider diversifying its energy sources and inspect the strategies undertaken by countries similar to it. For instance, Brazil, a fellow Latin American country with a significant reliance on hydropower, has made an impressive progress in harnessing wind energy, generating 94 TWh. Similarly, wind energy has proven productive in countries with varying geographical and climatic conditions, ranging from the United States to Spain. Panama could also study the successful model of solar power utilization in countries like Mexico, generating an impressive amount of electricity. Importantly, as an advocate of low-carbon sources, Panama should also contemplate the development of safe and clean nuclear energy, following the successful examples of countries like United States and France.
Historically, Panama's approach to low-carbon energy has undergone interesting changes. Hydropower was at the heart of these changes, with consistent expansions in electricity generation from the late 1970s until the 2010s. Specifically, the early 1980s and mid-1990s saw moderate growth in hydropower, contributing around 0.4 to 0.6 TWh each year in the stated periods. However, the late 1990s and early 2000s experienced fluctuation in hydropower with occasional decreases. From 2012 onwards, a significant increase in hydroelectricity generation can be observed, including a large surge in 2020. A particularly noteworthy development came in 2015, when Panama invested in wind energy for the first time, indicating a move towards diversification of its low-carbon energy sources.