Panama's LPI ETESA 01-26 public tender revealed much more than competitive prices. While the immediate takeaway is the aggressive pricing—with renewable energy contracts awarded for as little as $30/MWh and a consolidated average of around $34/MWh —the real message seems to lie in what's to come: a market beginning to shape its next technological evolution.
That's the main takeaway from Guadalupe González , Senior Energy Consultant and former Director of Electricity at Panama's National Energy Secretariat, during her participation in the "It Had to Be Said and It Was Said" streaming event on Strategic Energy. According to the specialist, the next major discussion in the Panamanian market could shift from focusing exclusively on price to entering a new phase marked by energy storage.
“We see it as having a great future: we have high renewable potential and the introduction of storage would be an interesting technological shift,” González noted.
This statement is particularly relevant because Panama has just concluded one of the most competitive tenders in Central America, with 74 bids from 42 generating companies and competitive pressure that ultimately undermined initial market benchmarks. However, sustaining this momentum will require first resolving the regulatory framework.
“We are working hard to have all the regulations and rules ready for the time of the bidding process, so that there is no doubt on the part of the stakeholders about how it will proceed,” the consultant added.
This interest is not isolated. As markets in the region begin to embrace new flexibility solutions, Panama is also following suit. The Dominican Republic is one of the cases currently attracting attention in the sector .
Meanwhile, the current market situation continues to be explained by the economic outcome of the auction. The reference price for clean energy had been set at USD 47.8/MWh , but the final allocation revealed a much more competitive scenario. AES Panamá submitted the lowest bid at USD 29.7/MWh , while several solar projects were priced between USD 32 and USD 34/MWh .
“The most economical in terms of energy was 29.7, the price set by AES, and it really has the largest allocated energy component on the list, which gives very good numbers,” González said.
But behind those prices, the former official identified another structural factor: predictability. The existence of a bidding schedule with new calls for tenders already planned began to send clearer signals to the market, allowing developers and investors to structure their strategies further in advance.
“It is the product of a timeline, and that gives the sector's actors the opportunity to organize themselves, to have enough information to organize themselves in the long term as well, because let's remember that there are two more tenders coming,” he stated.
This change in dynamics is also beginning to be reflected in system costs. Panama, which historically recorded marginal costs of 180 and even 200 USD , now shows a downward trend much more in line with a competitive market.
“The latest marginal cost figures for the system that I saw were around $66 at the beginning of the year,” González said.
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This decrease improves systemic competitiveness and supports one of the main objectives behind these processes: reducing pressure on electricity rates. However, from a public perspective, expectations always remain higher.
“ I always want to see it cheaper… but from the government’s perspective, we ultimately want tariff reductions ,” he acknowledged. Even so, González considered the result consistent with market trends.
The bidding process also provided a strategic definition of how Panama interprets its energy transition. Renewable growth is not presented as an isolated objective, but rather conditioned by the need to preserve operational stability. The executive summarized this by stating that it is important for the country to have clean, renewable energy while maintaining the reliability of the system.
The participation of hydroelectric plants with firm capacity reinforced this logic. The message was clear: the country seeks to advance decarbonization without compromising security of supply.
In that context, storage appears less as a theoretical possibility and more as the next logical step.
More than just a one-off award, the process left a structural signal about where the Panamanian market is evolving: more competitive prices, greater regulatory predictability, and readiness to incorporate new flexibility technologies .
“I believe we can consider this tender a success,” concluded González, noting that the main focus of the analysis seems to be not only on how much the price of the MWh fell, but also on Panama beginning to prepare the conditions for a new stage in the electricity market, where the debate will no longer be solely about contracting cheap energy, but about how to sustain an increasingly sophisticated renewable energy matrix .
Watch the full stream here: https://www.youtube.com/watch?v=REIuAZy1IbM
FES's next stops
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.
To access the full FES 2026 tour schedule, learn more about it and be part of the meetings, the FES digital platform is available, while all events will have a live broadcast through the official Future Energy Summit YouTube channel.
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