Guatemala's PEG-5 tender not only redefines the current technology mix but also anticipates the future evolution of the electricity market: a model dominated by hybrid solutions that integrate renewables and storage. With 1,258 MW awarded across 57 projects, the process marks a turning point in how the supply is structured.
In this context, Quantum America's analysis focuses on the transition to more complex configurations, capable of providing flexibility and adapting to demand. " The future lies in hybrid offerings, that is, in the combination of technologies ," stated Julian Nobrega, project manager at Quantum America.
This change addresses an operational need of the system: to avoid inefficiencies such as energy curtailment and to improve the management of generation profiles. Integrating storage allows for capturing surplus energy and providing stability, which is becoming increasingly important in systems with high renewable energy penetration.
Meanwhile, the tender reveals a structural shift in the energy mix: over 900 MW awarded correspond to renewable technologies, representing 73% of the total, while thermal power plants play a complementary role. These latter plants are distributed among coal/biomass (175 MW), petroleum coke (135 MW), and gas/bunker fuel (93 MW).
Within the renewable energy sector, solar with storage leads with 671 MW, representing approximately 55% of the total awarded capacity and over 70% of the renewable energy segment. This configuration is not only driven by cost considerations but also by its operational adaptability.
“Without a doubt, PEG-5 demonstrated that storage systems are highly competitive,” Nobrega stated.
The advancement of these technologies cannot be explained without considering the level of competition achieved in the bidding process, one of the highest in the region. The process lasted 14 hours, with multiple rounds and intense competition among bidders.
The depth of competition—73 rounds, dozens of bids, and an average price of $101.09/MWh—was key to consolidating more efficient solutions. Furthermore, the price dispersion—power ranging from $5 to $47.62/kW-month and energy ranging from $2 to $129.32/MWh—reflects the diversity of strategies.
Continue reading
In this context, gas gradually lost competitiveness. “While the participation of gas projects was significant in the first rounds, the prices offered were not competitive,” Nobrega explained.
The lack of gas infrastructure in Guatemala increased entry costs, leading to the withdrawal of these bids in intermediate stages. This factor ultimately tipped the scales in favor of renewable energy solutions with storage.
In turn, the design of the bidding process was key to channeling this competition efficiently. Quantum America participated as a technical advisor in the economic evaluation, using optimization tools that determined the award.
The OPTIME model allowed for the allocation of contracts based on cost-minimization criteria, while the successive bidding rounds intensified competition. This was further enhanced by the inclusion of a virtual bid from the National Electric Energy Commission, which acted as an additional competitor to optimize prices.
This combination of factors not only explains the current results but also lays the foundation for a more dynamic and attractive market for new investments. Pending official confirmation, preliminary results already position Guatemala as a key destination in the region.
“The entry of new players into the Guatemalan market is expected, attracted by the results of the process and by the confidence generated by the contracting scheme,” Nobrega concluded.
Thus, PEG-5 not only consolidates the leading role of storage and renewables, but also projects a system where flexibility, technological complementarity and economic efficiency will be the cornerstones of development.