Enabling Central America's energy transition through renewable energy, energy citizenship, and regional integration

Transitioning to renewables in Central America is crucial for mitigating climate change and promoting energy citizenship. Research on highly renewable energy systems in the region is still lacking. To fill this gap, this study assesses pathways to defossilise the Central American energy system through 100% renewable energy in the seven countries of the region. Three main scenarios, Best, Delayed, and Current Policy, are formulated based on renewable energy technology penetration in power, heating, and transport sectors, as well as electricity exchange and market maturity. A novel approach incorporates country-specific weighted average cost of capital to model these assumptions. The energy transition is projected in 5-year increments until 2050 using the LUT Energy System Transition Model. Key findings indicate that the ambitious Best Policies Scenario foresees eliminating fossil fuel-generated electricity by 2050, relying solely on renewables, and defossilising hard-to-abate sectors via Power-to-X solutions and sector coupling. This transformation aims for zero CO2 emissions by 2050, requiring investments of 125-140 b<euro>. Despite substantial investments, system cost reductions could profoundly impact Central American economies and societies, yielding socio-economic and environmental benefits. Achieving this transition necessitates supportive regulation, an attractive power market, and active engagement from energy citizens. The study highlights the feasibility and benefits of defossilising the Central American energy system using 100% renewable energy. It provides valuable insights for policymakers and stakeholders to develop effective strategies to accelerate the energy transition and achieve climate goals. The results could also be relevant to other regions with similar energy systems and challenges.