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June 2001

Renewable energy for sustainable agriculture and rural development in Honduras

FAO and Energy

As part of the follow-up of the Earth Summit, celebrated in Rio de Janeiro in 1992, the Food and Agriculture Organization of the United Nations (FAO) was designated task manager of Chapter 14 of Agenda 21 - Sustainable Agriculture and Rural Development (SARD). The main objective of SARD is to increase food production and food security, without harming natural resources. It emphasizes the importance of rural energy to obtain increased productivity and enhanced income generation.

In theory, energy - and especially renewable energy - has a great potential to contribute to the objectives of SARD; in practice, integration becomes difficult mainly due to institutional factors. Most of the projects of rural electrification and renewable energy are developed by the power sector without involving other sectors, and are many times supply oriented; most agricultural and rural development projects do not take into account explicitly the energy requirements, which are viewed as a "black box" to be provided by others. Rarely do the energy and agricultural sectors join their efforts to effectively promote energy systems to support sustainable agriculture and rural development.

FAO collaborates in Honduras with national institutions in the process of integrating projects of renewable energy in rural development from the base: the demand of the communities.

Energy in Honduras

Honduras is the second largest country in Central America and has a population of about 6 million inhabitants, of which about 65% live in rural areas. The country has various potential resources for power generation such as hydropower (estimated between 3,600 and 5,000 MW), solar energy, wind energy (40 MW), geothermal (120 MW), and bio-fuels (140 MW). In 1999, 56% of the total installed capacity (600 MW) was based on hydro plants and the remaining on fossil-fuel thermal plants. Power generation is mainly accomplished by ENEE (Empresa Nacional de Energía Eléctrica), the national utility (350 MW), and five private thermal generators (250 MW). ENEE is also in charge of transmission and distribution systems.

In Honduras, there are more than 7,000 communities off the grid where rural electrification by conventional grid extension may not be cost-effective because these rural centers are small, dispersed, and low-intensive power consumers. Small and mini (less than 10 MW) and micro hydro (less than 100 kW) sites have been identified and some of them have been developed up to the investment stage. These types of investments "match" the needs of particular end users, like the huge existing market for productive uses of electricity made up by 5,000 small coffee processing facilities.

The agro-industrial sector has an interesting potential for "biomass-to-energy" projects with an estimated capacity of at least 140 MW. Various bagasse co-generation projects have been identified with a potential of at least 25 MW; in the palm oil industry and in some forest-to-energy projects a potential of at least 50 MW has also been identified, which can be connected to the national grid.

Next to ENEE as a public institution, the Energy Cabinet (Gabinete Energético), made up by several ministries, is the main authority in the energy sector responsible for the formulation of the overall energy policy. The Secretary of Natural Resources and Environment (SERNA) is responsible for the implementation of policies and regulations of the energy sector through the "Dirección General de Energía". Another public body, the National Energy Commission (CNE), has the main responsibility of regulating the electricity sector, as well as of revising changes to the tariff structure.

At the rural level, there are a few commercial entities and NGO groups that have acted as catalysts in creating rural consumer awareness, providing technical assistance and training, and helping to establish micro-entities that sell and finance solar home systems.

Energy in the South of Lempira1

From its start in 1994, one of the most important components of the FAO project on Rural Development in the South of Lempira (PROLESUR) has been the management and rational use of natural resources. Energy touches on many aspects of its rural development activities: watershed management (agro-forestry, woodfuel supply and erosion control), irrigation (and small scale hydro-power), household improvements (improved stoves, adequate lighting) and community development and education (lighting and audiovisuals for community centers). This project therefore decided to focus also on energy issues and its related problems.

In 1998 a Participative Energy Demand Assessment study was done in cooperation with SERNA and ENEE in 4 selected communities of Lempira to gain better insight in energy demand and people's priorities. This study formed the basis for a series of small demonstration projects and other energy activities.

The studies indicated that the respective populations invest more money and time on energy than expected: around 1,000 lps.2 per year, for illumination only (candles and kerosene wick lamps); and 80 'cargas' of firewood - corresponding to a value of approx. 1,700 lps. Among the priorities expressed by the population, energy was always ranked between the first and fifth place, mainly for illumination. In the community meetings 8 small projects were prioritized: PV-systems for homes (2x) and communal use (2x); forest management (2x), a small-scale hydro-project and a biodigestor. These projects were selected with the communities being informed that for implementation of such projects, they would have to invest part of all the costs.

Based upon this prioritization various community demonstration projects were developed. Altogether 9 solar systems for community buildings and 4 solar lanterns were installed in communities where adult education activities are part of FAO's assistance. Furthermore 2 small-scale hydro projects and a forest management/agro-forestry plan were implemented. Also a detailed study on the woodfuel demand and sources was done as part of a national study. In all the projects a participative methodology for planning and design was used.

The following is an evaluation of the projects carried out in 1999.

Solar Energy

The community solar projects functioned well. Most of the communities were content, but several indicated that they were interested in paying more for a system with more capacity. The analysis also indicated that these small low cost projects have a big impact in the remote communities, especially if they are accompanied with programs of education and community organization. Studies about the program of education for adults organized in the communities, showed an average annual increase in the level of income of 545 lps. with every year of study obtained. Also significant were changes in the life of the feminine participants, such as improvements in health, increase in civil participation and improved performances of their children at school. These classes had been much more difficult without the energy for illumination and radio cassette recorder. Several communities took advantage of the opportunity to move or to create their community store in the same building to have this communal service at night. One also could observe that these projects had a big impact on the promotion of solar energy. Many people indicated their interest in buying a SHS, especially under a credit opportunity.

In general solar energy technology in Honduras is a commercially mature technology as much for SHS as for solar systems for community use. Several barriers for their introduction on big scale exist, such as high investment costs, financing problems (lack of credit), lack of promotion and instruction, and lack of infrastructure (installation, maintenance, sale of spare parts). There exists good potential in Honduras to overcome these barriers.

Hydro energy

The reviewed hydro-projects, which had been implemented with locally manufactured technology, were showing some technical problems, which could be resolved locally. This technology still needs improvement and investment in time and money to arrive at its commercial maturity. Honduras is endowed with a great hydro potential. Small turbines are well adapted for local production. Small-scale hydro can be very interesting in remote, unelectrified areas, especially in combination with small-scale irrigation or a combination of small electric mechanical energy demand, e.g. in coffee areas.

Towards a Rural and Renewable Energy Policy

The whole process of participative energy demand studies, demonstration projects and evaluation, has been implemented in close cooperation with SERNA and other national institutions. SERNA has shown interest in supporting the creation, from the base, of a sustainable market of distribution, installation, maintenance and service of renewable energy systems in Honduras in collaboration with FAO. Potential synergies have been identified when the barriers for the creation of this market are eliminated simultaneously from diverse sectors like education, rural electrification and agriculture. Both institutions have decided to dedicate time and personnel to elaborate proposals and strategies in more detail.

(for more information contact or

Dr Gustavo Best

Bert van der Plas

Bart van Campen

Reinerio Zepeda
SERNA - Dirección General de Energía

1 Lempira is the Department of Honduras with one of the highest rates of poverty. PROLESUR is a project of FAO and the Secretariat of Agriculture and Livestock (SAG), financed by the Dutch Government
2 lps. = lempiras; approximately 15,3 lps./US$ (2001)

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