Costa Rica Follow-Up: Fatal Dependence on Renewable Electricity (Tom Friedman’s energy paradise loses its luck)

“When an abundant natural fall of water is at hand, nothing can be cheaper or better than water power. But everything depends upon local circumstances. The occasional mountain torrent is simply destructive. Many streams and rivers only contain sufficient water half the year round and costly reservoirs alone could keep up the summer supply. In flat countries no engineering art could procure any considerable supply of natural water power, and in very few places do we find water power free from occasional failure by drought.”

– W. S. Jevons, The Coal Question (London: Macmillan and Co., 1865), p. 129.

Thomas Friedman in the New York Times has presented Costa Rica as a model for the energy world, noting its reliance on renewable energy (hydro) to generate electricity. In response, we posted last week about how such dependence had left it vulnerable to the vagaries of rainfall, and (to a much lesser degree) wind. W. S. Jevons, the father of energy economics, said as much in 1865.

With all hydro development in the hands of the government, and with hydro responsible for 75-80% of power generation, any shortfall in rain can, within 1-2 weeks result in reduced electricity generation. And the odds have now caught up with Costa Rica – recent dryer conditions have led to blackouts in the country.

Exacerbating the country’s policy of hydro dependence for its power sector, recent investments have been run-of-river. This means that new dams have little storage capability and power output can be regulated only within broad ranges and depend on rainfall patterns over a very short period, ranging from hours to less than two weeks. Run-of-river projects are the ecologically preferred type of hydro development these days, since the construction does not involve flooding a large amount of land to create a reservoir. At the same time, the project’s output will fluctuate – not as much as wind or solar, but significant nevertheless.

When run-of-river hydro provides an essential element of a country’s electricity output, the system can be highly sensitive to even small variations in rainfall. For Costa Rica, a small reduction in rainfall, down just a bit over 2008, has proven beyond the capabilities of the country’s storage reservoirs to buffer.

As a result of recent rainfall variations, even the country’s modest electricity growth of just over 2% could not be met from current generation resources. The result has been cutbacks in electricity supply through periodic load shedding across the country. Predictably, the country’s industrial sector bears the brunt of unreliable electricity supply, and is 2% below last year’s level. Fluctuating electricity supply is bound to lead to problems with modern industrial process technologies and the country has virtually assured its continued dependence on tourism and plantation crop exports with such an energy policy.

The results of the country’s energy policy, denying citizens the ability to develop better sources of power generation, will be applauded by foreign eco-tourists who will return to an electricity supply rendered utterly reliable by reliance on coal, gas and nuclear. But what of the supposed beneficiaries – the citizens of Costa Rica – do they all really want to see their economic horizons shrink to hotel and restaurant jobs and agricultural labor? Talk about McJobs!