El Salvador Energy Situation

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El Salvador

Capital:

San Salvador

Region:

Latin America

Coordinates:

13.6667° N, 89.1667° W

Total Area (km²): It includes a country's total area, including areas under inland bodies of water and some coastal waterways.

21,040

Population: It is based on the de facto definition of population, which counts all residents regardless of legal status or citizenship--except for refugees not permanently settled in the country of asylum, who are generally considered part of the population of their country of origin.

6,309,624 (2023)

Rural Population (% of total population): It refers to people living in rural areas as defined by national statistical offices. It is calculated as the difference between total population and urban population.

25 (2023)

GDP (current US$): It is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products. It is calculated without making deductions for depreciation of fabricated assets or for depletion and degradation of natural resources.

340,156,200,002 (2023)

GDP Per Capita (current US$): It is gross domestic product divided by midyear population

5,391.07 (2023)

Access to Electricity (% of population): It is the percentage of population with access to electricity.

100.00 (2022)

Energy Imports Net (% of energy use): It is estimated as energy use less production, both measured in oil equivalents. A negative value indicates that the country is a net exporter. Energy use refers to use of primary energy before transformation to other end-use fuels, which is equal to indigenous production plus imports and stock changes, minus exports and fuels supplied to ships and aircraft engaged in international transport.

49.24 (2014)

Fossil Fuel Energy Consumption (% of total): It comprises coal, oil, petroleum, and natural gas products.

48.43 (2014)

Source: World Bank

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Introduction

NOTE: This article is being rewritten and will be completed soon.

El Salvador is a small country in Central America bordering Guatemala to the west, Honduras to the north, Nicaragua to the east, and the Pacific Ocean to the south, with a territory of only 21,040 km². In 2022, the total population of El Salvador was 6.3 million, with 61.7 % of the population living in urban areas and 38.3 % in rural areas. Population density is 301 inhabitants per km²; so El Salvador has by far the highest population density among all countries in Central and South America 64.2 % of the total population is concentrated in only five of the 14 departments (San Salvador, La Libertad, Santa Ana, San Miguel, and Sonsonate). In 2022, poverty was 26.6%, and extreme poverty (income of less than US$ 2.15 per day) was 8.6%. However, by 2022, extreme poverty had redoubled in comparison with the pre-pandemic levels of 2019. The reason for this observation is at least in part attributable to the rise in the cost of living fueled by high inflation rates of 6.1 % in 2021 and 7.3 % in 2022.

Between 2010 and 2022, El Salvador achieved a moderate rate of economic growth averaging 2.4 % per year. In 2020, the gross domestic product (GDP) contracted by 7.9 % in the wake of the COVID-19 pandemic, but recovered in 2021 with a growth rate of 11.2 %, and an additional 2.6 % in 2022. For 2023, the Central Reserve Bank of El Salvador (BCR) expects growth of between 2 % and 3 %, and the inflation rate to be between 3.5 and 4.1 %.

The currency of El Salvador is the US dollar; all monetary figures in this article are in US dollars.

Energy Situation

On-grid power generation capacity installed totals 2,848 MW in 2022; by 2023 it has increased by another 41 MW to 2,889 MW.

In 2022, electric power generation totaled 7.07 TWh from which 5.5 TWh (77.4 %) came from renewable energy sources.

Large off-grid or isolated systems do not exist in El Salvador. Off-grid capacity totals 5.2 MW; its share in total capacity installed is a mere 0.2 per cent. Off-grid capacity is basically hydropower (1.1 MW) and solar-photovoltaic (4.1 MW).

Access to electricity

On national average, 98.2 % of the households have access to electricity by being connected to the power grid. In urban areas electrification rate is 99.3 %, and in rural areas 96.4 % of all households.¹

However, having access to electricity does not necessarily imply being the owner of a connection. Particularly in the rural areas a considerable number of households (21.5 %) do not have an own connection in their own dwelling but receive electricity by makeshift installations from neighbors (they are typically relatives) who are connected to the grid. In the urban areas the percentage of those makeshift installations is 10.7 %. The reason for this is to share the costs of installing the connection and the fixed costs that are charged on the monthly utility bill.

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¹  Encuesta.

Rural electrification

The necessity of huge investments, and high operation and maintenance costs in conjunction with low demand from the potential beneficiaries, have discouraged the private sector from showing interest in electrifying communities outside the concession zones. Service provision to a small number of last-mile users with very low demand in remote areas is not profitable for the local utilities. So, rural electrification has relied mainly on public investments and subsidies, but these are insufficient to reach the most remote users.

In 2021, a geospatial planning model for access to electricity (Plan Georeferenciado de Acceso Universal a la Electricidad, PGAUE) was implemented. One purpos of PGAUE was to identify homes (househoöds) and other community or productive uses without access to electricity. A total of 8,759 households were identified as lacking access to electricity. The plan considers three possible alternatives for their electrification: (i) extension of the existing local power grid, (ii) isolated systems such as mini grids, and (iii) individual solar-photovoltaic systems (solar home systems). The plan estimates the investments necessary to achieve universal access to electricity by 2030 at approximately US$ 65.7 million.

In order to serve this market and close the gap in electricity access, the government of El Salvador, through the CEL, has acquired one of the utilities, namely the Distribuidora Eléctrica Cuscatlán (DEC) with headquarters in Santa Tecla..

Renewable Energy

PV Potential

Based on data derived from the Global Solar Atlas the World Bank indicates the average practical photovoltaic power output of a utility scale PV system with optimum tilt on all lands that exclude physical obstacles to utility-scale pv plants (“level 1” zones) as of 4.827 kWh per kWp per day; that is 1,762 kWh per kWp per year with a minimum of 1,602 kWh and a maximum of 1,832 kWh per kWp per year.

Policy Framework, Laws and Regulations

Tariffs

The charge per kWh varies in accordance with the type of use, power demanded, and voltage level of the connection (low tension, medium tension, and high tension). The charges are revised and adjusted every three months.

In 2022, the charge as yearly average of all utilities and all types of users was 20.71 ct., but varied between 17.53 ct. for the biggest users and 24.04 ct. for residential users. The monthly electricity bill is subject of additional charges such as for commercialization, distribution, street lighting, and other public interests. Residential users with a maximum consumption of 105 kWh per month receive a government subsidy of US$ 5.00 that will be discounted from the monthly bill.

Institutional Set up in the Energy Sector

As in many other countries the electric power sector in El Salvador maintained a vertically integrated structure until the 1990s. There was a sole public utility company that was the Lempa River Hydroelectric Executive Commission (Comisión Ejecutiva Hidroeléctrica del Río Lempa, CEL). In 1996, the new General Law of Electricity (Ley General de Electricidad) took effect. It liberalized the electricity market, opened it to other public and private companies.besides the CEL, and introduced free competition in the wholesale and retail market segments.

The transmission system is operated by the Empresa Transmisora de El Salvador (ETESAL). ETESAL is a state-owned corporation that also owns the transmission infrastructure.

Electricity distribution  is concessioned to eight public and private distribution companies (utilities). A transactions unit manages  the  operation  of  the  transmission system  and  the wholesale electricity market.

The sector regulatory authority is the General Superintendency of Electricity and Telecommunications (Superintendencia General de Electricidad y Telecomunicaciones, SIGET). SIGET is responsible for enforcement of the General Law of Electricity; among other functions it issues norms  and  technical  standards, determines the rates  and  charges  for  using the  national transmission  system; and supervises  compliance  with  technical  standards  and the quality.of the services.

Other Key Actors / Activities of Donors, Implementing Agencies, Civil Society Organisations

The Inter-American Development Bank (IDB) approved on 11 October 2023 a loan of US$ 93 million to the Lempa River Hydroelectric Executive Commission (Comisión Ejecutiva Hidroeléctrica del Río Lempa, CEL) for the purpose of the implementation of the Universal Energy Access Program in El Salvador. The general objective of the first individual operation is to contribute to the universalization of the electrical energy service in El Salvador, through the implementation of sustainable electrification modes that maximize the use of renewable energies. The specific objectives are: (i) increase access to the electricity service in the country; (ii) strengthen the technical capacity of the Lempa River Hydroelectric Executive Commission (CEL) to plan and manage electrification projects; and (iii) promote productive uses of energy in the beneficiary communities of electrification projects.

The 27th of june, 2024, the CEL signed a letter of understanding with the french corporation HDF Energy, and the french Embassy to El Salvador regarding the cooperation between El Salvador and France in matters of energy, particularly mentioning energy transition.

References

SIGET (2021): Mercado eléctrico de El Salvador 2020 (abril 2021). Superintendencia General de Electricidad y Telecomunicaciones (SIGET). San Salvador; available online at: https://www.siget.gob.sv/wp-content/uploads/2021/05/Mercado-Electrico-de-El-Salvador-2020-2.pdf .

SIGET: Boletín de Estadísticas eléctricas Año 2022 (No. 24). Superintendencia General de Electricidad y Telecomunicaciones (SIGET). San Salvador; available online at: https://www.transparencia.gob.sv/institutions/siget/documents/556832/download.