The Wind Blows in Guanacaste’s Direction, but is it Beneficial?

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In 2018, Costa Rica had the best year in wind energy of its history. Without Guanacaste, that wouldn’t have been possible.

Of all the electricity the national electrical system produced in that year, 16 percent was from wind, according to data from the National energy control center. Six years ago it was only 4.25 percent. Almost all of the 16 percent came from wind farms in Guanacaste.

The sustained growth in wind energy production made wind the second biggest source of energy in the country, only surpassed by water at 73 percent.

At the end of the 1970s, the Costa Rican Electricity Institute (ICE) started studying wind and found that Guanacaste was the best zone in the country to produce wind energy. The studies became a reality in 1996 when Costa Rica celebrated the inauguration of the first wind plant in Latin America located in Tilaran. (Plantas Eólicas S.R.L).

More than 20 years later the country has 18 wind farms, 16 of which are in Guanacaste. This gives us international prestige and even generates modest numbers of employment in the province, but more can be done, experts say.

Wind in Millions of Colons

Wind farms in the province that leave profits for municipalities in cantons chosen for installations.

At the local level the companies in charge of the plants have the obligation to be up to date with their payments (municipal patents and taxes on real estate, for example). They pay construction permits once they start the projects.

Tilaran is home to nine wind farms, the most in Guanacaste. Juan Pablo Barquero, the mayor of this town, said that the city receives 108 million colons ($180,000) for the payment of patents from all the plants installed in the province. That corresponds to between 60-70 percent of all the government’s money from this area.

The municipal patents are the most important for the city and its because of the wind farms. The money is used for different community projects and even for administrative expenditures,” he said.

But the mayor said it’s not enough. For him, Tilaran and the rest of the cities in the province need to receive more direct financial benefits.

In November 2017, the city drafted a bill that would tax the companies that develop and own wind farms in Guanacaste at one percent per 1,000 gross colons in revenue.

According to the document, which was presented by congressman Rodolfo Peña, the money would be distributed among all the local governments in the province, but the text doesn’t specify how much earnings would increase for cities if it enters into law. Tilaran doesn’t know either.

The bill was approved by all cities and is being studied by the environmental committee in congress.

Cheaper energy?

According to ICE, since 1991 Guanacaste has produced almost 40 percent of the nation’s electricity. It’s the only province that generates electricity from four renewable sources, including water, biomass, solar and geothermal.

This doesn’t mean that the electricity receipt is going to be cheaper.

Electricity produced in the province is administered by ICE in order to supply the national grid. Planning director for ICE Javier Orozco says that the law requires the institute to buy electricity that the majority of wind farms in Guanacaste produce. That means that ICE takes the generation and mixes it with energy in its own plants in order to meet national demand.

“In terms of price, we have a tariff system that is universal and in solidarity,” he said.  

For Carlos Montenegro, energy advisor to the national industry commission, CICR, the system that makes all of ICE’s subscribers pay the same amount and be vulnerable are due to “errors the institute made that make all the subscribers end up paying.’

Some investments that ICE has made have doubled the budget they are planned with and that makes the tariff more expensive.”

Their own energy

Guanacaste is peculiar. Coopeguanacaste serves 40 percent of the bonuses in the province while ICE covers the rest. Besides, with their own production it covers 62 percent of the energy that it sells and the rest is bought from the institution.

What does this mean? That those who receive energy from Coopeguanacaste can have decreases in their electricity tariff with the development of wind farms, because tariffs of the cooperative respond to more efficiency by the company producing the energy.

Data from the regulatory institute (ARESEP) says that the cooperative has cheaper tariffs. For example, the electricity consumption for an average family of subscribers of Coopeguanacaste has a cost of around 92 colons ($0.15) per kilowatt hour while ICE is 139 colons ($0.23).   

Erick Herra, manager of projects for Coopeguanacaste, said that it’s the inauguration of the second wind farm in Santa Cruz in January of this year that will help subscribers see a decrease in their receipts.

The first wind farm of the cooperative is located in Rio Naranjo, Bagaces and started operation in August 2018.

For Herra, the cooperative seeks to depend less on ICE and generate its own electricity which could make it more competitive. “If eventually the country lives through an opening of the electricity market, we would have the most competitive prices,’ he said.

Help without Supervision

When companies come to the province, they assume that every one of them will enter a process of social responsibility that consists of giving back to the community.

Barquero, mayor of Tilaran, says that if all the companies in the canton take on this commitment “they won’t all work in the same way.”

The community ends up being the only vigilante of that happening. In the case of the El Cacao plant, the communities of Bernabela, Cacao and Santa Barbara confirmed that they received benefits.

Sandra Alvarez, representative of the El Cacao development association said that the cooperative collaborated in the construction of a kids park and a restaurant that generated revenues for the community.

Henry Segura, former director of the Invenio University (a private university focused on technology in Cañas), estimates that for every wind farm that functions there are 25 people hired for it. However, nationwide ICE doesn’t have studies detailing the true employment in the energy sector in the country, including jobs that are generated by wind farms in Guanacaste.

This number estimated by Segura isn’t high compared to what a company that manufactures goods could generate (100 jobs, for example) but the consultant insists that they are high quality jobs.

It’s people that are highly trained and end up exporting projects internationally because they know how to,” he said.

During the construction of the farms, job numbers go up. In the case of the most recent wind farm inaugurated by Coopeguanacaste, the sum reached 300 direct jobs and 700 indirect jobs.

Education Doesn’t Fly

For Segura, education is one of the most important challenges for the province. It’s necessary to diversify it at least at the same speed as the energy projects in Costa Rica.

“With the consolidation of the wind farms, the education offerings must be taken advantage of, at the same pace or faster than the sector, but the reality is that we are going slower,” Segura says.

The country has taken some steps toward preparing human capital for energy advances, but not enough. For example, the national learning institute is graduating mechanics specialized in electric vehicles, but for the moment that training is exclusively for the cantons of the central valley.

Wind in the future

Energy tourism, or wind tourism in this case, could also benefit the country, but it’s something that Costa Rica is not really exploring. It’s about taking advantage of energy projects in order to attract more tourists who want to understand how they generate energy.

Countries like Scotland are pioneers in combining wind farms with visitors centers or tourist strategies. According to newspaper El Pais the wind farm in Whitelee that is located 74 kilometers form the Scottish capital offers 130 kilometers of road to travel through its 215 turbines that can be seen on foot, bike or horse.  

Barquero, the mayor of Tilaran, says that the country and the local government “have slept through taking advantage of this type of tourism” but that there is still time to take advantage of it.

According to the mayor, the city is working on a tourism project that seeks to take advantage of the energy plants in the canton.