Nearshore Americas
electricity Latin America

Country-by-Country Update: Surging Demand Puts Electrical Grids to the Test

Ernst and Young, in a recently published review of energy trends, says demand for power is outstripping supply in  Latin America and the Caribbean, and matters are likely to get worse before they get better.

Shared journey, different choices: Will Latin America realize its energy future,” penned by Gavin Rennie and published in May 2019, states that healthy private consumption, among other factors, is driving a surge in demand for energy, which is expected to double by 2050.

The forecast is for  2,822 terawatt-hours (TWh, a measure of industrial demand)  from projected 2020 levels of 1,448 TWh. The report calls for major upgrades to grid infrastructure, especially in light of increased demand from residential home offices. In the markets covered by Nearshore Americas, it is expected that increasingly cities will see the accelerated reconfiguration of the workplace from traditional offices, to home and other remote locations.

Business Process Outsourcing (BPOs) firms are paying much closer attention to the durability of electrical power, at a time when their resources – quite literally – can be spread out into hundreds or thousands of remote work-locations across a metropolitan area. A key concern of course is the reliability of the power supply and the steps local utilities providers are taking in anticipating future demand.

The World Energy Council in a 2017 review of  the region (World Energy Scenarios), noted, “Although a few countries have started structural economic and energy reform programs to raise productivity and competitiveness, it is clear that the recent slowdown of economic growth has made the reform process more difficult.”

Also important is the increased frequency and severity of extreme weather events.  The inter-connectedness of power generation and supply is a weak point,  no matter which country is being considered.

The following is a country-by-country breakdown of power and energy deficiencies in the region, compiled by Nearshore Americas:


In June 2019, a  blackout stripped all of mainland Argentina and Uruguay of power, affecting millions of people. Uruguay’s state-owned utility, UTE, said some systems had been damaged by recent rain. The blackout was caused by a failure in an electrical grid that serves both Argentina and Uruguay. The media reported that the outage was linked to a crash in the transmission of electricity from the Yacycretá hydroelectric dam. 


In November 2019, Barbados was affected by a two day power outage, forcing schools and some businesses to close and hitting water supplies on the island. The Barbados Light & Power Company (BL&P), a subsidiary of Canada’s Emera Inc., suffered an engine failure.


Brazil is the largest electricity market in Latin America, generating and distributing electricity to over 79 million residential, commercial, and industrial consumers. Electricity load growth in Brazil is about 5%t per year.

Due to a nationwide blackout in 2009, Procon, the consumer protection body in Brazil established that for any interruption exceeding four hours, the responsible company would be fined 500,000 Brazilian reais ($300,000) for each hour of power outage beyond the initial four.

In March 2018, a power outage affected tens of millions of people, reportedly due to the failure of a transmission line near the massive Belo Monte hydroelectric station. Some 22.5 percent of the grid’s total output, or 18,000 megawatts, was affected. Media noted that the transmission line that failed is the responsibility of state-run utility Centrais Eletricas Brasileiras SA, commonly known as Eletrobras, and China State Grid Corp Ltd.


Bolivia, a country with over 11 million inhabitants, has seen a significant rise in demand for electricity, leading to outages as supply fails to keep up. Energypedia notes that private companies exclusively generate electricity from hydropower (36.3 percent) and thermal power plants mainly based on gas (59.7 percent).

Researchers say the demand for electricity has risen in the last 20 years dramatically and has led to a series of outages and unsatisfied demand, in large part due to household usage.


An Inter-American Development Bank (IADB) report indicates that Belize faces declining petroleum production as well as electricity costs that are among the highest in Central America.

Dependent on Mexico for over  30 percent of electricity supply, Belize has significant renewable energy resources. The IADB hopes a Sustainable Energy Action Plan developed with its technical assistance will strengthen energy policy.

The IADB report says Belize Electricity  Limited  (BEL),  which was nationalized in  2011,  is the primary distributor of electricity in  Belize, serving a customer base of approximately  80,363  accounts.


In June 2019, a massive power outage left swaths of South America without power, affecting tens of millions.  Then, in January 2019, around 200,000 people went without power following a 6.7-magnitude earthquake near Coquimbo (Coquimbo region). Prior to this, power outages occured in February 2010  when an 8.8 Richter scale earthquake hit the central part of Chile, and a tsunami folloed in coastal areas, affecting electricity, water, gas, and telephones.


Power outages affecting companies  in a typical month in Colombia were reported at 0.8 (a number arrived at by averaging for each month the number of outages in a given year) in 2017, according to the World Bank data.

Service quality in Colombia, as measured by service interruptions, is much lower than the average for other Latin America and Caribbean countries.

However, a market report on Columbia posted at cites the impact of guerrilla warfare on infrastructure and issues of corruption as affecting electricity supply.


Canada is the second-largest producer of hydroelectricity in the world. In 2014, almost 59 terawatt-hours were exported to the United States, while about 13 terawatt-hours were imported.

The industrial sector in Canada accounts for the largest share of demand, but residential and commercial-institutional areas also consume large quantities of electricity.

Periodically, natural disasters are the cause of power outages in Canada. Starting on September 1, 2019,  Hurricane Dorian damaged transmission systems and caused extensive and lengthy power outages in the Bahamas, the Eastern Seaboard of the United States, and in Nova Scotia and Newfoundland in Canada.

Costa Rica

In July 2017,  an overload in the Central American Transmission System in Panama caused a power outage in Costa Rica. It also partially affected power in Nicaragua, El Salvador, Honduras, Guatemala, and Mexico, the Costa Rican Electricity Institute (ICE) reported.

The Central American countries are interconnected by an electricity transmission line of 1,820 kilometers, which extends from Panama to Guatemala.

Some  1.4 million homes and businesses were left without power for five hours, ICE reported. Subsequent reports cataloged a power failure in a transmission line in Panama caused a strong imbalance of 500 Megawatts at power plants, which caused a crash in Costa Rica’s surge protection system.

Dominican Republic

Companies in the  Dominican Republic are affected by regular blackouts and high operating costs of the distribution companies. Many consumers rely on expensive alternative self-generated electricity.

A World Bank news feature entitled, “24/7 electricity boosts jobs and reduces crime”,   published in August 2015, says the frequent outages “sets the Dominican Republic apart from the rest of Latin America, a region with one of the lowest rates of power outages on the planet,” according to data from the Global Allianz insurance agency. In fact, with an average of 18 blackouts per month, the Dominican Republic was second to only the Democratic Republic of Congo and Yemen in terms of blackouts in 2010.

The report said that years of neglect has left profound challenges with over two-fifths of all the electricity purchased from generating companies lost before it reaches the consumers.  The result is ongoing, system-wide blackouts. Rehabilitation projects have been undertaken with the assistance of the World  Bank.

El Salvador

Power outages in a typical month in El Salvador were reported at 1.2 in 2016, according to the World Bank collection of development indicators.  On  September 16, 2019, a massive blackout left thousands in the country without electricity, also affecting three other countries in Central America, following a failure in the region’s electrical grid.


From June 1 to August 31, 2019, Guyanese customers experienced power outages an alarming eight times per day on average, according to statistics produced by electricity utility, the Guyana Power and Light (GPL) company

Media reports indicate GPL  blamed shortfalls had to do with the lack of capacity and redundancy issues. Promises were made that the utility is working to implement systems that would cause lesser power outages in the next few months.

GPL’s management reported that there were 772 power outages of varying duration from June 1 to August 31, 2019.


In September 2019, a failure in a regional electrical interconnection system caused a blackout in Honduras and Nicaragua and partially affected the operations in Guatemala and El Salvador. A state of emergency was declared in the Central American Electric System (SER) due to a failure in the 230 kW (kilowatts) transmission line in Honduras.


A failure in Central America’s electrical grid left millions of people without power for hours in at least four countries on Monday, September 16, 2019. Media reported that Honduras was  hardest hit, with the entirety of its territory and its more than 9 million inhabitants affected.

Salvador Mansell, president of Nicaragua’s state power transmission company, Enatrel, said the blackout hit his country’s capital, Managua, and its central departments, or provinces.

With  600,000 paying customers for electricity in the country, internet service and water distribution in parts of capital city Managua were also affected.  El Salvador and Guatemala also had partial outages. Power was restored in the afternoon.


Power outages and fluctuations continue to be frequent in Jamaica. Power utility Jamaica Public Service Company, JPS, said in April 2019, it would commission a US$25 million storage facility in phases this year as a safeguard against power outages.

The new facility is expected to recharge and release power during low periods of renewable power generation, arising from cloud cover or low wind speeds. It promises to allow the company to maintain a consistent power supply and curtail the power fluctuations.


Constant low voltage is a  common problem faced in most homes of Mexico. Voltage surges are another challenge. indicates that power cuts are a regular feature in Mexico, especially during thunderstorms.

Improvements to infrastructure to the country’s electricity grid has been ongoing. However, reported on May 15, 2020, that power outages and natural gas shortages on the Yucatán peninsula are still a cause for concern.  The report said energy experts  blame the power cuts on a lack of natural gas to generate power.


Nicaragua is recorded as the country in Central America with the lowest electricity generation, as well as the low levels of  population access.

The country’s electricity system comprises the National Interconnected System (SIN), which covers more than 90% of  residential territory (the entire Pacific, Central, and North zone of the country).

On September 16, an emergency in the Central American Electrical System due to a line failure in Honduras caused an extensive blackout which hit capital city, Managua, and 15 other provinces.

A new project is being worked on to integrate the electricity network with the rest of the Central America. It is expected to improve the reliability of supply and reduce costs.

Peru indicates that Peru has an electrification rate of 83.55 percent (6,394,049 households) on the national level.

However,  38.32 percent (979,476 households) of the rural population (around 4 million people) do not have access to electricity. This is one of the lowest rural electrification rates in Latin America.

The access to grid electricity varies across the different regions. The  Andean North and Amazon region have the lowest rural electrification rate (22 percent and 18 percent respectively) compared to Coastal Central and South regions which are more densely populated and also more easily accessible (60 percent and 71 percent, respectively).

Peru has two main power transmission grids.  The Colombia-based ISA Group controls over half of the grid through its subsidiaries Red de Energia del Peru and Interconexion Electrica (ISA).


As reported by, the Panamanian power company ETESA recorded power disruptions across the country in January 2019. The outage reportedly affected millions of homes and businesses, along with a water treatment plant near Chilibre.

Outages were also reported in Costa RicaNicaraguaGuatemala, and El Salvador. The cause of the blackout has not been reported.

In June 2019, Panama’s government launched bidding to supply firm capacity and energy to power distributors Empresa de Distribución Eléctrica Metro-OesteEmpresa de Distribución Eléctrica Chiriquí and Elektra Noreste.

BNamericas reported in April that officials were preparing such a process to cover an expected near-term capacity shortfall due to delays in the development of thermoelectric projects Gas to Power Panamá (GTPP) and Telfers for 441MW and 670MW, respectively.

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Saint Lucia

Saint Lucia experienced a massive power failure island-wide on January 21, 2020. It was reported that several businesses suffered financial loss due to  the three-hour blackout.

Four months before, On September 5, 2019, the island experienced a total shutdown lasting nearly three hours.

In a media statement, The St. Lucia Electricity Services Limited (LUCELEC) said that the outage was due to a significant internal fault at one of its main power stations, stating  that‘the failure tripped all of the generators, resulting in a total system shutdown.

Power was restored in three hours. LUCELEC said it was  continuing to investigate the cause of the problem and to take necessary corrective action, but did not give timelines.


In June 2019, a  massive electrical failure left tens of millions of people in the dark in Uruguay and Argentina. Argentine President Mauricio Macri promised a full investigation.

Media reported that the blackout was prompted by failure in an electrical grid that serves both Argentina and Uruguay

The outage occurred as people in Argentina were preparing to go to the polls. Parts of Paraguay and Chile were also affected, a state energy company said.


BPOs are commonly promised secure fiber-optic networks and a multi-source power supply in all the markets to which they are wooed to set up a business.

Regional exports agencies indicate the availability of broadband access and high quality of electricity supply, with 90 percent or more of the regional population having access to electric power at “affordable prices.”

However, there is one glitch. Many BPOs now find themselves operating in countries where the investment in constant energy supplies is often below par because of financing challenges, aging infrastructure, and “Acts of God.”

The World Bank,  in a research project entitled, “Meeting the Balance of Electricity Supply and Demand in Latin America and the Caribbean,” (2011) projected that by 2030, with a modest rate of economic growth, the region’s demand for electricity would reach nearly 2,500 terawatt-hours (TWh), up from about 1,150 TWh in 2008.

Electricity demand in Brazil alone could more than double to about 1,090 TWh. The World Bank report concludes that investment in new generation capacity under the ICEPAC (Illustrative Country Expansion Plans Adjusted and Constrained) scenarios are estimated to be about US$430 billion between 2008 and 2030.

The OECD, in research published in 2019, said that for BPO firms, there exist broader structural challenges in the LAC region remain, such as lack of basic electricity and road infrastructure in remote areas.

The Paper, “Broadband and Beyond”,  published online in the OECD library notes, “As is typical of such geographical areas, necessary infrastructures, such as adequate roads or stable electricity grids, is lacking, which makes it challenging to install broadband infrastructure.

“Suburban areas too in many cities often lack basic infrastructure for telecommunications providers, and management of rights of way is frequently a major hindrance for network deployment and infrastructure co-investment.”

With more home offices being established, the build-out for BPOs in the region will require not only an investment in hardware, software, and broadband services from the private players. It will also hinge on a reliable power supply systems that is backed by a clear, believable plan to sustain those services for the long-term.


Avia Ustanny-Collinder

Avia Ustanny-Collinder is a senior editor at Nearshore Americas and an award-winning business journalist residing in St. Catherine, Jamaica.

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