Distributed generation of renewable energies for self-consumption and electric mobility in Nicaragua

By: Silvio Argüello y Daniela Matus

It is well known that worldwide there is a clear and important trend to promote the use of sustainable technologies in power generation, and that, in turn, contribute to the reduction of greenhouse gases and combat climate change.

This trend is not indifferent in Nicaragua and its future projection is in favor of opposing the traditional, large, and centralized production carried out by a few generation centers towards a change that consists in the production of self-sustainable electricity from many small sources, and of course, seeking the least possible impact on the environment. 

To this effect, from a legal perspective, the legislation in Nicaragua recognizes distributed generation in detail in Ministerial Agreement No. 063-DGERR-002-2017 and other related regulations, being able to conceive it from generation for self-consumption of renewable energies such as: solar, wind, biomass, hydro, and solid waste.  Any natural or legal person who has or plans to install and connect to the distribution system, in low or medium voltage, small generation facilities for self-consumption, whose power is less than 5 MW, may apply to this generation.

As part of the distributed generation, it is possible that there are energy surpluses, or energy injected to the distribution network of the Distribution Company (ED). This will be done only in cases where a Purchase and Sale Agreement has been signed between the parties, the Distribution Company (ED) and the Distributed Renewable Generator for Self-consumption (GDRA).

Distributed generation has a great positioning in the local character since it represents a saving that comes mainly from self-consumption that can boost energy production, without leaving aside the fact that it is related to the generation of “clean” energy based on renewable energy.

On the other hand, and always within this context, the Nicaraguan legislation has also constituted Law No. 1111, Law of Reform and Additions to Law No. 554, Energy Stability Law, which contemplates the creation of charging or recharging centers for electric vehicles, designating the Ministry of Energy and Mines as the holder to issue and manage the regulatory provisions for these centers. In this context, the payment of DAI, ISC and VAT for electric vehicle charging (recharging) centers is exempted for a period of 5 years. Likewise, they are exempted from any payment of municipal taxes and other tax incentives related to the acquisition of electric vehicles and their spare parts, with no value limit.

It should be considered that the definition of Electric Vehicles includes electric cars, electric trucks, electric vans, electric vans, electric minibuses, electric buses, electric motorcycles, electric bicycles, electric velocipedes and electric ships, vessels, or boats. In the case of electric buses, it also includes those powered through a mechanical arm, by means of electricity from overhead wires. Naturally, it is recognized by said regulation that electric vehicles are exempted from complying with the gas, smoke and noise emission control standards established in the Law for the vehicular circulation regime.

Considering the above mentioned, the distributed generation of renewable energies for self-consumption and electric mobility as an alternative to vehicles propelled by fossil fuels, arise as a profitable perspective both for business, or for the use or improvement in energy efficiency.