Recent renewable energy tenders in Central America and the Caribbean are beginning to offer more complex signals for those evaluating investment opportunities in the region. During the " It Had to Be Said and It Was Said" livestream by Energía Estratégica , Julián Nóbrega , Project Manager at Quantum América , and Rafael Velazco Espaillat , Senior Consultant, analyzed how recent processes in Panama, Guatemala, and the Dominican Republic show that competitiveness no longer depends exclusively on the price offered, but also on variables such as energy storage, regulatory design, and the actual capacity of the electrical grids.
In this context, the Dominican Republic likely issued the most immediate warning to the market, following a tender that ultimately awarded only half of the initially promised capacity , amidst questions from developers and doubts about the technical criteria used to limit the final capacity. At the same time, Guatemala demonstrated a remarkable acceleration in storage competitiveness, while Panama opened a relevant discussion on how the economic results of certain bidding processes should be interpreted.
Regarding this last point, Nóbrega explained that the widely reported figures for the Panamanian process do not directly reflect the contractual price for energy purchases, but rather the result of a financial methodology used to compare bids under standardized criteria. “The evaluation and comparison are done using all bids discounted to their present value,” he affirmed.
As explained, the model developed by Quantum for ETESA allows for the comparison of technologies with different delivery profiles within the same tender. Under this logic, the average value of USD 23.86/MWh, widely replicated in the market, arises from the financial calculation of discounted costs, while the actual contracts are in considerably higher ranges.
The Panamanian bidding process awarded 500 MW of firm power for long-term supply between 2026 and 2046 , solidifying its position as one of the markets with the lowest reference prices in the region. A total of 47 companies participated, with solar proposals predominating, although wind energy ultimately captured the majority of the allocation due to its generation profile and firm power contribution.
The Panamanian experience also replicates part of the methodology that Quantum has been developing for over 15 years in Guatemala, where it participates as a consultant in processes related to the supply of distributors. However, there the strongest indicator was not the awarding mechanism, but rather the competitiveness achieved by the BESS systems.
Nóbrega acknowledged that even within the technical sector itself "there was surprise" at the performance of the bids submitted in the latest Guatemalan tender, especially because the process required more robust configurations than those typically found in other markets.
The PEG-5 tender, aimed at meeting a demand of up to 235 MW , identified nearly 50 awardable projects and resulted in a weighted average price of USD 101/MWh . However, hybrid projects with batteries signaled an even more aggressive trend, with bids dropping to as low as USD 94/MWh , driven by configurations with six hours of storage .
This figure was particularly significant because it far exceeded market expectations. According to the executive, batteries had participated in previous tenders, but without achieving sufficient competitiveness to secure contracts.
Furthermore, the design of the Guatemalan market incorporates a successive auction mechanism, which progressively pushes prices down in each round, helping to explain the highly competitive behavior observed in this edition.
In contrast, in the Dominican Republic, the discussion focuses less on technological competitiveness and more on operational constraints. Velazco explained that the reduction in allocated capacity was due to the electrical system's actual capacity to absorb new renewable generation, in a context where project expansion has outpaced transmission infrastructure growth. "Our networks are under immense strain," Velazco warned.
According to the consultant, the country's renewable energy growth has been particularly rapid in recent years. "The country has experienced an incredible boom: in just five and a half years, we went from 349 MW of renewables to 1,600 MW injected into the grid," he stated.
This already operational capacity will now be supplemented by newly awarded projects, which are expected to come online between 2027 and 2030. In addition, storage is already part of the technical requirements of the Dominican market, since any power plant that injects more than 20 MW must incorporate backup equivalent to 50% of that capacity.
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However, even with that requirement, the main concern remains the physical capacity of the network to receive the new generation.
“Here, they are dispatched when the resource is available, so the cut is because the electrons literally don't fit in the network,” Velazco said.
This scenario introduces a particularly sensitive variable for developers and investors, as it directly affects the predictability of revenue from awarded projects. Unlike other markets where curtailment is driven by economic decisions made at the office, in this case the bottleneck is strictly infrastructure-related.
The final result also substantially altered initial market expectations. While the first stage projected a scenario of approximately 605 MW of awardable capacity, with over 1,500 MW offered and a highly competitive price range, the final allocation reduced the volume to 325.69 MW , leaving out nearly 280 MW compared to that preliminary scenario.
Furthermore, the awarded values ranged between USD 0.106/kWh and USD 0.131/kWh , a dispersion that reinforces the interpretation that the economic variable was not the only determining criterion.
In that context, Velazco warned about the growing unrest within the sector, and even explained that some companies are considering taking legal action against state distributors and the regulator, in a context where the discussion is no longer solely about price competitiveness, but also about operational predictability and real evacuation capacity.
Beyond these three markets, the regional map can still be expanded. Quantum is also working on the planned 1500 MW auction in Honduras , designed under a similar logic to that applied in Guatemala, although it is currently on hold due to regulatory changes and political decisions.
Taken together, the various processes show that understanding the renewable energy business in the region requires increasingly sophisticated technical, regulatory, and operational skills to identify real opportunities.
Watch the full stream here: https://www.youtube.com/watch?v=AQEgpR0MoRM
FES as the epicenter of the debate
The Future Energy Summit tour will continue with FES Guatemala on May 14 and FES Mexico on May 19, where key players from the public and private sectors will address the challenges and opportunities linked to the expansion of the energy system, new investment schemes and the execution of strategic projects.
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