Energy Purchase Processes

Article

Under Law 6 of February 3 1997, the National Authority of Public Services (ASEP) in Panama is entitled to regulate the energy industry. Its purpose includes securing the availability of an efficient energy policy capable of supplying the country’s energy demand, while meeting economic, social, and financial viability criteria.

As a consequence of the energy crisis and the state’s interest in promoting the use of renewable energy resources, mitigating adverse environmental impacts, and reducing dependence on traditional fossil fuels by means of Law 43 of August 9 2012, Law 6 was modified. It now allows the purchase of power and energy through special public tender processes, approved by ASEP and subject to the energy guidelines issued by the National Energy Secretariat, which have their own rules and are more expeditious.

Thanks to the changes introduced to Law 6, several public tenders have been carried out which have attracted the national and international interest of investors. Such investors may take advantage of the incentives provided by this Law along with new technology, to guarantee the efficient, continuous, and uninterrupted provision of the energy public service.

Some of the most recent examples include Public Tender ETESA 01-15, for the procurement of a long-term supply of power and energy exclusively for thermoelectric generation plants; and, public tender ETESA 02-15, also for the procurement of a long-term supply of power and energy exclusively for thermoelectric generation plants, but with new machines or units, which individually aim to increase the capacity of firm power and associated energy to 350 MW.

Law 6 is a clear example of an attentive legislative body that seeks to adapt to changing circumstances. This is crucial if Panama wishes to retain its position as a promoter of the most relevant renewable energy projects in the region.