Salvadoran Electricity Sector
16 Oct 2015Salvadoran authorities outlined investment opportunities in the sector, announced a 150W tender and detailed the inner workings of the electricity market in the country.
INTRODUCTION
The electricity sector in El Salvador is characterized by an electricity market in which public and private investors are able to compete with clear and transparent rules.
The Salvadoran market has a regulatory framework that enables all participants to freely operate in generation, transmission and distribution activities.
This regulatory framework ensures the legal certainty needed for investments in the electricity sector. The enforcement mechanisms and constitutional basis cannot be modified without the support of all participants. The operation of the Transmission System and the Wholesale Market is based on production costs with a marginal economic model that rewards efficiency and allows investors to obtain guaranteed profits, while end users get affordable rates.
The salvadoran electricity market requires that most of the generation be contracted under the Power Purchase Agreement scheme, having the goal of not being dependent on a single generation source, but instead having a diversified energy matrix. In that sense, investment in non-conventional renewable sources is a priority for the coming years, but investment in other technologies such as natural gas and coal is not limited.
This document shows our competitive advantages, our achievements over the years, and the experience of those who are already developing investments in our country.