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SMART GRID
Smart Grid  
1 August 2017

Central America and Caribbean utilities to invest $3.3bn in smart grid

Electricity losses and challenges associated with the growth of RE is spurring investment in smart grid infrastructure by utilities in Central America and the Caribbean.

According to a new report compiled by Northeast Group, the Central America and Caribbean region’s utilities face high electricity losses due to theft and significant challenges in incorporating the growth of renewable energy resources. These utilities are expected to invest $3.3 billion in smart grid infrastructure over the next decade to address these challenges. To-date, the region has been slow to adopt smart grid infrastructure but backed by international development agencies, this is beginning to change and several flagship projects are in development.

“Central America will experience gradual growth in overall smart grid investment, led by the deployment of smart meters across the region,” according to Ben Gardner, president of Northeast Group.

Northeast Group's Central America & Caribbean Smart Grid: Market Forecast (2017-2027) study notes that the region’s most pressing problem is electricity theft, which has created challenging financial conditions for utilities and is spurring a number of smart metering efforts, many of which are already underway.

Sustainable loss reduction

At the same time, overall high crime rates – particularly violent crime – can make it difficult for utilities to secure permanent loss reductions and make deployments more challenging. In pilots throughout the region, smart grid infrastructure – combined with community outreach – has proven to be the most effective solution. In addition to loss reduction, Central American and Caribbean countries will deploy smart grid infrastructure to incorporate renewable energy, helping reduce dependence on expensive fuel imports.

“Investment will be driven by the combination of high electricity prices and high levels of non-technical losses—two issues in the region that have not improved over the past decade. Support from international agencies such as the Inter-American Development Bank (IDB), USTDA and others is now helping kick-start projects to address these problems throughout the region," added Gardner.

 

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