Central America Wind Energy Landscape


Central America Wind Energy Landscape

The Whirring Rise of Wind: Central America's Evolving Energy Landscape

Central America, a region known for its lush rainforests and volcanic peaks, is witnessing a transformation in its energy sector. 

Once heavily reliant on hydropower and then fossil fuels, the region is increasingly embracing wind energy as a clean and sustainable alternative. This shift towards wind power has unfolded in a fascinating journey, marked by distinct phases.

In the first chapter, stretching back before the mid-1990s, hydropower reigned supreme. Abundant rivers provided a dependable source of electricity. However, this dominance faced challenges with growing concerns about environmental sustainability and the vulnerability of hydropower to unpredictable droughts.

The mid-1990s ushered in the second phase, where fossil fuels like oil emerged as a replacement for the limitations of hydropower. This reliance, however, exposed Central American nations to the volatility of oil prices. The need for a more diversified and secure energy source became increasingly clear.

The turning point arrived in the mid-2000s. Pioneering countries like Costa Rica, with the first commercial-scale wind farm in Latin America built in 1996, led the charge. Wind power's rise was fueled by several factors: the allure of renewables amidst fluctuating oil prices, government policies promoting clean energy portfolios, and the presence of strong wind resources in specific regions across Central America. This marked the beginning of the third phase, where wind energy has become a well-established renewable source in the region's energy mix.

Central America Wind Energy Landscape

Hystory of Wind Energy Development in Central America

Central America's journey with wind energy can be summarized in three key phases:

1. Hydropower Dominance (Pre-Mid 1990s): Historically, hydropower reigned supreme in Central America. Rivers provided a reliable source of electricity, but droughts and environmental concerns later challenged this dominance.

2. Fossil Fuels Take Over (Mid 1990s - Mid 2000s): As hydropower faced limitations, fossil fuels like oil stepped in to fill the energy gap. This increased dependence on volatile oil prices exposed the need for diversification.

3. Rise of Renewables, Including Wind (Mid 2000s - Present): The mid-2000s marked a turning point. Countries like Costa Rica, Nicaragua, and Honduras began embracing wind power to reduce reliance on fossil fuels and enhance energy security.

Here are some additional details about this development:

  • Pioneering Steps: Costa Rica holds the distinction of having the first commercial-scale wind farm in Latin America, built in 1996.
  • Growth and Challenges: Wind energy capacity has grown steadily since then, but Central America lags behind some other Latin American countries in total installed capacity.
  • Factors for Growth: Several factors fueled wind energy's rise:
    • Fluctuations in oil prices made renewables more attractive.
    • Government policies promoting renewable energy portfolios provided a push.
    • Central America boasts strong wind resources in specific regions.

Current Status:

While hydropower remains a significant player, wind energy is a well-established renewable source in the region. Countries like Costa Rica and Panama boast a significant share of wind power in their energy mix.

Central America has the potential to further develop its wind energy sector. Continued investment, improved infrastructure, and addressing concerns from local communities will be crucial for its future growth.

Central America Wind Energy Landscape

Central America Wind Energy Landscape: Statistic Data

Here's a breakdown of some key statistics on Central America's wind energy landscape:

Installed Capacity:

  • Data can vary depending on the source, but as of 2022, estimates suggest Central America has around 4-5 Gigawatts (GW) of total installed wind energy capacity.
  • Nicaragua leads the region with over 2 GW, followed by Honduras with around 1.5 GW.
  • Guatemala, Panama, and Costa Rica also have operational wind farms, but with smaller capacities.

Energy Generation:

  • Wind energy contributes a significant portion of electricity generation in some Central American countries.
  • In Nicaragua, wind power can account for over 30% of national electricity generation at peak times.
  • Honduras and Guatemala also see a growing contribution from wind, although the percentage might be lower than Nicaragua.

Growth Potential:

  • Central America has the potential to significantly increase its wind energy capacity. Studies suggest potential for up to 20 GW of installable wind resources across the region.
  • Continued policy support, grid modernization, and technological advancements can unlock this potential and further diversify the energy mix.
Central America Wind Energy Landscape

Central America Wind Energy Landscape: Benefits and Advantages

Wind energy offers a multitude of benefits and advantages for Central America, contributing to both environmental and economic well-being. Here's a breakdown of some key points:

Environmental Benefits:

  • Reduced Greenhouse Gas Emissions: Wind energy is a clean and renewable source of power. Unlike fossil fuels, wind turbines do not produce greenhouse gasses during operation, contributing to combating climate change.
  • Improved Air Quality: Transitioning to wind energy reduces reliance on fossil fuels, which can significantly improve air quality by lowering emissions of pollutants like sulfur oxides and nitrogen oxides.
  • Conservation of Water Resources: Wind energy production doesn't require large amounts of water unlike some traditional energy sources, minimizing pressure on freshwater resources.

Economic Benefits:

  • Reduced Reliance on Fossil Fuel Imports: Central America relies heavily on imported fossil fuels, making them vulnerable to price fluctuations and supply disruptions. Wind energy offers a domestic and stable source of energy, reducing dependence on imports and potentially lowering energy costs in the long run.
  • Job Creation: The wind energy sector creates jobs in manufacturing, construction, operation, and maintenance of wind farms. This can contribute to economic growth and development in the region.
  • Rural Development: Wind farms are often located in rural areas, bringing investment and economic opportunities to these communities. Landowners can benefit from lease agreements with wind farm developers, generating additional income.

Additional Advantages:

  • Energy Security: Wind energy diversification strengthens energy security by reducing dependence on a single fuel source.
  • Sustainable Development: Wind energy aligns with the principles of sustainable development by providing clean energy while minimizing environmental impact.

Wind energy offers a win-win situation for Central America. It promotes environmental health, fosters economic growth, and strengthens energy security, paving the way for a more sustainable future.

Central America Wind Energy Landscape

Central America Wind Energy: Policy and Regulation

Central America boasts excellent wind resources, particularly in Nicaragua, Honduras, and Guatemala. To harness this potential, governments in the region have implemented various policies and regulations:

Favorable Policies:

  • Renewable Energy Targets: Most Central American countries have established ambitious renewable energy targets, with wind playing a significant role.
  • Feed-in tariffs and Auctions: Many countries use feed-in tariffs or auctions to guarantee prices for electricity generated from wind power, making it financially attractive for developers.
  • Fiscal Incentives: Tax breaks and exemptions on import duties for wind equipment can reduce project costs and encourage investment.

Regional Integration:

  • The Central American Electricity Market (MER): This supranational body facilitates regional power trade, allowing wind-rich countries to export surplus electricity to their neighbors.

Challenges Remain:

  • Streamlining Regulations: Complex and lengthy permitting processes can slow down wind project development.
  • Grid Modernization: Upgrading transmission infrastructure is crucial to effectively integrate wind energy into the regional grid and manage fluctuations.
  • Social and Environmental Impact: Careful environmental impact assessments and community engagement are needed to address concerns about land use, wildlife, and noise pollution from wind farms.

Resources for Further Reading:

  • **Renewable Energy Roadmap for Central America: Towards a Regional Energy Transition (International Renewable Energy Agency: [IRENA]": This report by IRENA outlines a pathway for Central America to achieve a significant increase in wind energy and other renewables.
  • Renewable Energy Sector in Central America - Trade - European Commission: This European Commission document provides an overview of the renewable energy sector in Central America, including wind energy policies and challenges.
Central America Wind Energy Landscape

Central America Wind Energy Landscape: Infrastructure

Wind energy relies on a network of infrastructure to function effectively. Here's a look at the key components in Central America:

Wind Farms:

  • These are the heart of wind energy production, consisting of numerous wind turbines spaced strategically across a land area with strong and consistent winds.
  • Central America has wind farms of varying sizes, with Nicaragua and Honduras boasting some of the largest.

Wind Turbines:

  • These towering structures convert wind energy into electricity. Modern turbines have large blades that capture wind and rotate a shaft connected to a generator.
  • Technological advancements have led to taller turbines with larger blade spans, allowing them to capture more wind and generate more electricity.

Transmission Lines:

  • High voltage transmission lines are crucial for carrying the electricity generated by wind farms over long distances to population centers and substations.
  • Upgrading and expanding the regional transmission grid is essential to integrate wind energy effectively and avoid bottlenecks.


  • These electrical substations act as control centers, transforming the high voltage electricity from wind farms to lower voltage levels suitable for distribution to homes and businesses.
  • Modern substations can also integrate energy storage solutions to help manage fluctuations inherent in wind power generation.

Supporting Infrastructure:

  • Access roads, maintenance facilities, and communication networks are also necessary to ensure the smooth operation and upkeep of wind farms and their associated infrastructure.

Challenges and Opportunities:

  • Grid Modernization: Central America's existing transmission grid faces limitations in handling the variable nature of wind energy. Upgrading the grid requires significant investment but is crucial for maximizing wind energy potential.
  • Interconnectivity: Strengthening regional electricity interconnection allows for smoother energy exchange between countries, enabling wind-rich nations to export surplus power to their neighbors.
  • Smart Grid Technologies: Implementing smart grid technologies can enhance grid management and improve the integration of wind power by dynamically adjusting power flow based on real-time wind conditions and electricity demand.

By addressing these challenges and leveraging opportunities, Central America can further strengthen its wind energy infrastructure and unlock its vast potential for clean and sustainable energy generation.

Central America Wind Energy Landscape

Central America Wind Energy Landscape: Wind Farm Projects

Here are some of the significant wind farm projects operational or under construction in the region:

  1. Cerro de Hula Wind Farm, Honduras: Located southwest of Tegucigalpa, Honduras, this wind farm holds the title of the largest in Central America with a capacity of 102.5 MW. It consists of 51 wind turbines and supplies clean energy to thousands of homes.

  2. Eolo Nixcoyol Wind Farm, Nicaragua: Situated in Rivas, Nicaragua, Eolo Nixcoyol boasts a capacity of 64 MW, significantly contributing to the country's wind energy production and its goal of becoming a leader in renewable energy.

  3. San Buenaventura Wind Farm, Panama: Located in the Chiriquí province of Panama, San Buenaventura has a capacity of 100 MW, contributing to Panama's transition towards a cleaner energy mix.

  4. Planta Eólica Punta Cana, Dominican Republic: While geographically not part of Central America, the Dominican Republic is another major player in Caribbean wind energy. Punta Cana is the largest wind farm in the country with a capacity of 80 MW.

  5. Santa Ana Wind Farm, El Salvador: El Salvador's wind energy sector is relatively new but growing. Santa Ana, with a capacity of 50 MW, is one of the largest operational wind farms in the country.

  6. Jäkälä Wind Farm, Costa Rica: A leader in Central American renewable energy, Costa Rica has several notable wind farms. Jäkälä, located in Guanacaste province, has a capacity of 55 MW and contributes to the country's impressive reliance on clean energy sources.

  7. Miramar Wind Farm, Nicaragua: Another significant wind project in Nicaragua, Miramar boasts a capacity of 49.5 MW, exemplifying the country's commitment to wind energy and diversification of its energy mix.

  8. El Coyol Wind Farm, Costa Rica: Further contributing to Costa Rica's clean energy production, El Coyol wind farm has a capacity of 45.5 MW.

  9. Agua Caliente Wind Farm, Nicaragua: Located in Rivas, Nicaragua, Agua Caliente contributes 35.5 MW to the national grid.

  10. Xoel Schacher Wind Farm, Nicaragua: Another wind farm in Rivas, Nicaragua, Xoel Schacher has a capacity of 30 MW and helps power Nicaraguan homes and businesses with clean energy.

This list is not exhaustive, and there are many other wind farm projects under development or recently completed across Central America. As the region strives for cleaner energy solutions, wind power is certain to play an increasingly vital role.

Central America Wind Farm Projects: a Table overview

CountryWind Farm ProjectCapacity (MW)
HondurasCerro de Hula102.5
NicaraguaEolo Nixcoyol64
PanamaSan Buenaventura100
Dominican Republic*Planta Eólica Punta Cana80
El SalvadorSanta Ana50
Costa RicaJäkälä55
Costa RicaEl Coyol45.5
NicaraguaAgua Caliente35.5
NicaraguaXoel Schacher30
  • Dominican Republic is geographically not part of Central America but included for reference.

Central America Wind Energy Landscape

Central America Wind Energy Landscape: The Technology

Central America has good potential for wind energy, and it's playing an increasingly important role in the region's transition to renewable energy sources. Here's a breakdown of the wind energy technology being used in Central America:

Dominant Technology:

  • Horizontal-axis wind turbines (HAWTs): These are the most common type used worldwide, and they are also the dominant technology in Central America. HAWTs have a long, horizontal shaft with blades that rotate perpendicular to the wind direction. The wind spins the blades, which in turn convert the kinetic energy into electricity through a generator.

Trends and Advancements:

  • Larger turbines: As wind technology advances, turbines are becoming larger and more powerful. This allows for capturing more wind energy and generating more electricity per turbine.
  • Improved efficiency: Advancements in blade design and materials are leading to more efficient turbines that can capture more energy from weaker winds.

Considerations for Central America:

  • Site selection: Careful selection of wind farm locations is crucial to ensure consistent and strong winds. This often involves analyzing wind resource maps and conducting on-site wind measurements.
  • Grid integration: Integrating wind energy into the existing power grid is essential. Sometimes, grid upgrades might be necessary to handle the variable nature of wind power.

Central America is utilizing well-established wind energy technology with ongoing advancements to maximize efficiency and power generation from this renewable resource.

Central America Wind Energy Landscape

Central America Wind Energy Landscape: Private Sector Contribution

The private sector plays a vital role in driving the growth of wind energy in Central America. Here's how:

Investment and Project Development:

  • Financing: Private companies invest significant capital in developing, constructing, and operating wind farms. This helps to reduce reliance on public funding for renewable energy projects.
  • Expertise: Private companies bring expertise in wind turbine technology, project management, and construction. This ensures efficient development and operation of wind farms.

Market Participation:

  • Independent Power Producers (IPPs): Many wind farms in Central America are built and operated by IPPs. These companies sell electricity to utilities or directly to large consumers through power purchase agreements (PPAs). This creates competition in the energy market, potentially leading to lower electricity prices.
  • Operation and Maintenance (O&M): Private companies often provide O&M services for wind farms, ensuring the smooth operation and performance of the turbines.

Policy Advocacy:

  • Collaboration with Government: Private companies can collaborate with governments to develop supportive policies and regulations for wind energy development. This can create a more attractive investment environment for renewable energy projects.

Challenges and Opportunities:

  • Streamlining Permits: Long and bureaucratic permitting processes can hinder project development. Private companies can advocate for streamlining these processes.
  • Attracting Investment: Creating a stable regulatory framework and providing attractive financial incentives can encourage further private sector investment in wind energy.

The private sector is a key driver of wind energy development in Central America. By investing in projects, providing expertise, and advocating for supportive policies, private companies are helping to expand renewable energy and transition the region towards a more sustainable future.

Central America Wind Energy Landscape

Central America Wind Energy Landscape: Key Player Company

While there isn't a single dominant company solely focused on wind energy in Central America, several key players contribute to the industry's growth. Here's a breakdown of some important participants:

Independent Power Producers (IPPs):

  • These are private companies that invest in, develop, and operate wind farms. They sell electricity to utilities or large consumers through power purchase agreements (PPAs). Examples of IPPs active in Central America include:
    • Corporación Multi Inversiones (CMI) Energía: A prominent player with wind farms in Guatemala, Costa Rica, and Panama. They issued the largest green bond for a renewable energy company in Central America and the Caribbean [CMI Energia Press Release].
  • There are many other IPPs involved in Central American wind energy, making the market diverse.

Turbine Manufacturers:

  • These companies manufacture and supply wind turbines used in wind farms. Major global players like:
    • Vestas Wind Systems A/S
    • Siemens Gamesa Renewable Energy SA
    • They don't directly operate wind farms but provide the critical technology.


  • Established utility companies in Central America might also invest in or manage wind farms alongside their traditional operations.

The Central American wind energy landscape is driven by a combination of IPPs bringing investment and expertise, global turbine manufacturers supplying the technology, and potentially existing utilities participating in the market. It's a collaborative effort where different players contribute their strengths.

Central America Wind Energy Landscape

Central America Wind Energy Landscape: Financial Support

Central America's wind energy sector thrives due to a combination of funding sources, including public and private initiatives. Here's a breakdown of the key financial support mechanisms:

Public Funding:

  • International Financial Institutions: Multilateral organizations like the World Bank, Inter-American Development Bank (IDB), and the Central American Bank for Economic Integration (BCIE) provide loans and grants to support renewable energy projects, including wind farms.
  • National Governments: Some Central American governments offer financial incentives for wind energy development, such as tax breaks, feed-in tariffs (guaranteed prices for electricity produced from renewable sources), and concessionary financing.

Private Investment:

  • Independent Power Producers (IPPs): As mentioned earlier, IPPs are a major driving force. They raise capital from private equity firms, banks, and institutional investors to finance wind farm projects.
  • Green Bonds: Issuing green bonds allows companies to raise funds specifically designated for renewable energy projects. This is becoming an increasingly popular option in Central America.

Additional Considerations:

  • Risk Mitigation Instruments: Guarantees and insurance products can help mitigate risks associated with wind energy projects, making them more attractive to investors.
  • Carbon Markets: If properly established, carbon markets could create additional revenue streams for wind farm developers by generating tradable carbon credits.

The financial landscape for Central American wind energy is evolving. International support plays a role in getting projects off the ground, while private sector investment is crucial for sustained growth. Innovative financial tools like green bonds and risk mitigation instruments are also contributing to making wind energy a more attractive investment.

Central America Wind Energy Landscape

Central America Wind Energy Landscape: Enviromental Impact

Central America's Wind Energy: A Balancing Act

Central America boasts abundant wind resources, making it a prime location for wind farms. While wind energy offers a clean alternative to fossil fuels, it's not without environmental considerations. Here's a breakdown of both sides of the coin:


  • Reduced Greenhouse Gas Emissions: Wind turbines don't burn fossil fuels, resulting in significant cuts to greenhouse gasses and air pollution compared to traditional power plants. This combats climate change. (reference: [IRENA Latin America Market Analysis])
  • Renewable Resource: Wind is a constantly replenished resource, unlike fossil fuels. This ensures a sustainable energy source for the future.


  • Impact on Wildlife: Spinning turbine blades can pose a threat to birds and bats, causing collisions and fatalities. Careful planning and mitigation strategies are crucial. (reference: [Unjust Transition: Environmental Justice Issues])
  • Habitat Disruption: Constructing wind farms can disrupt natural habitats, affecting local flora and fauna. Minimizing land use and choosing appropriate locations are key.
  • Visual and Noise Pollution: Large wind turbines can alter the landscape and generate noise, potentially impacting nearby communities.
  • Social Impact: Wind farm development might lead to land-use conflicts and displacement of local communities. Open communication and community engagement are essential.

Moving Forward:

Central American countries can harness wind energy's potential while minimizing environmental drawbacks by:

  • Strategic Siting: Conducting thorough environmental impact assessments to identify locations with minimal wildlife and habitat impact.
  • Technological Advancements: Utilizing bird-friendly turbines and innovative deterrents to minimize wildlife collisions.
  • Community Engagement: Involving local communities throughout the planning process, addressing concerns, and ensuring fair compensation for any land use.

By carefully considering these environmental factors, Central America can develop a robust wind energy sector that contributes to a cleaner future without compromising ecological well-being.

Central America Wind Energy Landscape

Conclusion for Central America Wind Energy Landscape

Central America boasts potential for wind energy, with several countries like Costa Rica and Honduras already generating power through wind farms. While progress has been made, some nations still rely heavily on fossil fuels. This highlights the opportunity for further development in the region to tap into this clean and abundant energy source.

Central America has good potential for wind energy, with some countries already leading the way. 

Here's a summary:

  • Growth potential: The region is seeing increasing wind power capacity, contributing to the global renewable energy landscape.
  • Leaders: Costa Rica, Honduras, and Nicaragua have the most established wind farm operations.
  • Room for improvement: While some rely on renewables like geothermal, other countries depend more on fossil fuels for electricity generation.

Central America is on the path to harnessing more wind energy, but there's opportunity for further development.