Reviewing the Nicaraguan transition to a renewable energy system: Why is business-as-usual no longer an option?

In 2012, there was a peak in investment in clean-energy technologies in Nicaragua. However, the renewable installed capacity used at that time represented only 12% of the theoretical potential. This prompted the Nicaraguan Government to develop an ambitious national action plan to expand the use of cleaner technologies for electricity generation. Using LEAP and EnergyPLAN, this study simulates the Nicaraguan energy system and provides a prognosis of the outcome of the national action plan by 2030. An additional scenario is created to assess the potential effects of a more intensive use of clean-energy technologies in the Nicaraguan energy system such as biofuels and efficiency measures in the residential sector. Furthermore, a sensitivity analysis is performed to identify the impact of interest rates and carbon prices on the electricity sector. The study found that focusing efforts solely on the electricity sector is likely to achieve modest changes to the primary energy mix, but no reduction in total GHG emissions by 2030. These findings suggest that decarbonization must take place in the whole energy system and that radical change in the fuels used for transport and cooking are necessary to enable a transition to a smart energy system.