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El Salvador Electric Power Transmission & Distribution (T&D) Infrastructure Industry Analysis
Electricity generation in El Salvador is largely dominated by thermal power plants. As of 2021, El Salvador's installed electricity capacity was approximately 1.7 GW, of which around 68% was thermal, 31% was hydro, and 1% was wind power. The country's electricity demand has been increasing steadily in recent years, mainly due to economic growth and urbanization.
The country's electricity transmission and distribution infrastructure are managed by two state-owned companies, DELSUR and CLESA. DELSUR is responsible for the distribution of electricity in the southern part of the country, while CLESA distributes electricity in the northern region.
Currently, the Electric Power Transmission & Distribution Infrastructure industry in El Salvador is facing several challenges. The aging infrastructure is one of the main issues. Many transmission and distribution lines are outdated and require significant upgrades to meet the growing demand for electricity. In addition, the lack of investment in the sector has led to an inadequate supply of electricity in some areas, particularly in rural regions.
However, there are several major drivers that are expected to shape the industry's outlook in El Salvador. One of the primary drivers is the government's commitment to expanding the country's renewable energy capacity. The government aims to generate 70% of the country's electricity from renewable sources by 2030, which would significantly reduce El Salvador's dependence on fossil fuels and increase energy security.
In addition, the government is also focused on improving the efficiency of the transmission and distribution infrastructure. This involves upgrading the existing transmission and distribution lines and building new ones to ensure a reliable and stable supply of electricity. These projects are expected to attract significant investment in the industry and create new job opportunities.
Overall, the industry outlook for the Electric Power Transmission & Distribution Infrastructure industry in El Salvador is positive, with significant opportunities for growth and development. The government's commitment to expanding the country's renewable energy capacity and improving the efficiency of the transmission and distribution infrastructure is expected to drive investment in the sector and create new business opportunities. However, addressing the challenges related to aging infrastructure and inadequate supply of electricity in some areas remains a priority for the industryCurrent Scenario:
El Salvador has a relatively small electricity market, with total installed capacity of approximately 1.3 GW. The country relies heavily on fossil fuels for power generation, with oil and gas accounting for approximately 67% of electricity production, while renewable energy sources such as hydroelectricity, wind and solar make up the remaining 33%.
Construction of new projects:
The government of El Salvador has recognized the need to diversify its energy mix and reduce its dependence on fossil fuels. As a result, it has set a goal to generate 100% of its electricity from renewable sources by 2025. To achieve this goal, the government has launched several initiatives to encourage investment in renewable energy projects.
Major drivers:
The major drivers of the Electric Power Transmission & Distribution Infrastructure industry in El Salvador include government support for renewable energy, increasing demand for electricity, and the need to upgrade and modernize the existing power grid. The government is offering tax incentives and other benefits to encourage investment in renewable energy projects, which is expected to attract significant foreign investment in the sector.
Industry outlook:
The outlook for the Electric Power Transmission & Distribution Infrastructure industry in El Salvador is positive, with significant growth expected in the renewable energy sector. The government's target to generate 100% of the country's electricity from renewable sources by 2025 is expected to attract substantial investment in the sector. Additionally, there is a need to modernize and upgrade the existing power grid, which presents opportunities for investment in transmission and distribution infrastructure.
In conclusion, the Electric Power Transmission & Distribution Infrastructure industry in El Salvador is poised for growth, driven by government support for renewable energy and the need to upgrade and modernize the existing power grid. With its favorable investment climate and abundant renewable energy resources, El Salvador is well positioned to attract significant foreign investment in the sector.
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