Nicaragua's energy situation is badly in need of help and it can only get worse without immediate assistance. The Nicaraguan government, luckily, is aware of the problem and they are taking steps to remedy it by soliciting foreign investment to repair and improve existing facilities as well as to build new electricity generators.
Click here to see a photo of a typical electricity-less house.
Nicaragua's potential for electrical energy generation is divided between traditional plants, hydroelectric plants, and geothermal plants. Of the nine plants in the country, two are traditional thermal, two gas, two hydroelectric, two mini-hydroelectric, and one geothermal.
Hardly any maintenance has been done on the plants since the beginning of the Sandinista regime, however, so many of the plants are in bad condition and are aging. Often only a small percentage of the available turbines at plants are operating, resulting in the fact that Nicaragua has the least efficient energy production in Central America leaving only 48% of the population with access to electricity. Also, rationing and electrical cuts are frequent, especially during the dry season.
ENEL's (Nicaraguan Electrical Company) power-generating capability actually decreased slightly in the last year while demand increased by around 4%. Thermal generation accounts for more than half of the electricity and two-thirds of that amount is generated by just one plant. Production at the two thermal plants has increased but geothermal and gas production has decreased to compensate for that increase. The one geothermal plant at Momotombo volcano is now producing only 30% of it's capacity.
ENEL's has announced that there is a need to install an additional 200 MW capacity in the next three years, just to maintain the current level. There is also a need to extend electricity to the other half of the population who are currently powerless. Wishing to remedy Nicaragua's immediate energy needs, ENEL has and is negotiating with investors to build new thermal plants, rehabilitate the Momotombo plant, and build some bunker fuel oil plants as well as some bagasse- powered plants. In the long future, however, ENEL wants to rely on geothermal sources instead of the expensive thermal and gas plants. They are looking into the possibility of building on two more volcanoes and they have discussed a hydroelectric plant. Oil and gas could help somewhat and some industry sources say that the Atlantic coast is promising (there are 34 oil well in the Pacific and Atlantic which were built between the 1930s and 1980s).
ENEL has dire financial problems which account for the lack of maintenance and inability to build new plants and extend power lines. ENEL's annual losses are estimated to be 6% of the gross domestic product. This problem has resulted from the inefficient beurocrasy, the illegal tapping of electrical lines (which is highly common in poorer neighborhoods), a culture of not paying electric bills, and poor collection procedures. Due to new laws which attempt to streamline ENEL, new tariffs are being instituted and the company is being privatized.