With declining reserves, experts warn that Bolivia will need to import gas to generate electricity | Ante caída de reservas, alertan que Bolivia tendrá que importar gas para generar electricidad

By Marco Antonio Belmonte, Vision 360:

Bolivian Electricity Chamber

According to the Bolivian Electricity Chamber (CBE), this impact can be mitigated if the shift in the energy matrix towards electricity generation based on water, solar, wind, and hydrogen is emphasized. The Altiplano region has high potential for solar energy due to its strong radiation.

El presidente de la Cámara Boliviana de Electricidad, Angel Zannier (camisa blanca), junto con el exdirectivo de la CBE, Miguel Castedo. Foto: CBE

The President of the Bolivian Electricity Chamber, Angel Zannier (white shirt), with former CBE executive, Miguel Castedo. Photo: CBE

Angel Zannier, President of the Bolivian Electricity Chamber (CBE), warned that, due to the lack of new natural gas fields, Bolivia is on course to import gas in the medium term, which will affect electricity generation and, consequently, the final consumer.

To minimize the impact, Zannier recommended accelerating the gradual transition towards clean energy sources such as hydroelectric, photovoltaic solar, and wind power, along with the production of green hydrogen.

Currently, renewable energy generation in Bolivia is at a disadvantage compared to thermoelectric generation, which has benefited from subsidized gas prices over the past two decades at $1.30 per thousand cubic feet, while the same volume is exported at prices ranging between $8 and $11, Zannier explained.

He reminded that the Bolivian Central Bank (BCB) granted state loans to thermoelectric plants with 30-year terms and interest rates below 2%, as if they were development entities.

However, due to the decline in natural gas production and the scarcity of foreign currency, it makes sense to gradually implement renewable energy generation in the medium to long term, Zannier noted.

He also revealed that Bolivia currently has an installed capacity of around 4,000 megawatts, predominantly from natural gas-fired thermoelectric plants, far exceeding the internal market demand of only 1,800 megawatts, meaning there is significant idle capacity.

To avoid a significant negative impact on the final consumer, the expert recommended that the government should promote renewable energy generation and gradually reduce natural gas subsidies. If Bolivia has to import gas, electricity rates may need to rise, unless large subsidies are maintained.

The Altiplano’s Potential for Green Hydrogen

Zannier emphasized that the solar radiation in Potosí and Oruro offers great potential for green hydrogen production, even surpassing Chile, which has already ventured into this process.

He explained that green hydrogen is an alternative for creating synthetic fuels that can replace diesel and jet fuel, provide energy to refineries, or be transformed into ammonia used in the explosives industry.

Chile currently produces green hydrogen for export to the European Union using solar energy from the north and wind energy from the south. “The Chileans project $50 billion per year in revenue from green hydrogen exports,” Zannier said, adding that Uruguay also has projects to promote the production of this energy.

As a suggestion, Zannier proposed installing a green hydrogen production plant at Viru Viru airport to replace the expensive jet fuel used by planes at Santa Cruz’s terminal.

50 Years of the CBE

These recommendations stem from the technical expertise of the Bolivian Electricity Chamber, which will celebrate its 50th anniversary on September 26. The chamber began as the National Association of Electric Companies (ANELEC), formed by electricity distributors like CRE (Santa Cruz), SETAR (Tarija), SEPSA (Potosí), and CESSA (Sucre).

The enactment of the Electricity Code and the creation of the National Electricity Company (ENDE) structured the sector, which later entered a liberal period with the promulgation of the Electricity Law. Initially, this strengthened the private sector, but the public sector later shifted the paradigm by centralizing the production chain through ENDE.

This year, the CBE, which brings together the private electricity sector, counts a total of 14 members nationwide, a milestone made possible by the incorporation of electricity generators, construction companies in the sector, equipment suppliers, and energy intermediaries working with final consumers.

In CBE’s early days, 60% of Bolivia’s energy demand was met by hydroelectric power, while 40% came from thermoelectric plants that consumed natural gas and other fossil fuels. Today, the internal market is supplied by 70% thermoelectric power and 30% renewable energy from water, sun, and wind.

The growing demand for natural gas contrasts with the global trend toward renewable energy generation and consumption aimed at decarbonization.

Additionally, Bolivia’s natural gas fields are in clear decline due to nearly two decades of a lack of exploration work, meaning the country has only consumed previously discovered reserves. New exploration wells will take time to yield results and, if successful, produce gas.

The President of the Bolivian Electricity Chamber, Angel Zannier (white shirt), alongside former CBE executive Miguel Castedo. Photo: CBE

Leave a comment