Energy in Paraguay

Energy in Paraguay is primarily sourced from hydropower, with pivotal projects like the Itaipu Dam, one of the world's largest hydroelectric facilities. This reliance underscores the need for a robust infrastructure, including efficient transmission networks and distribution systems, to leverage the country's renewable resources fully.^[2]

Despite its extensive hydroelectric capacity, Paraguay faces environmental challenges, notably deforestation, exacerbated by the widespread use of firewood. This issue has spurred governmental action to promote more sustainable energy alternatives, such as biomass energy projects and efficient cooking technologies, to preserve the nation's forests.^[2]

Petróleos Paraguayos (Petropar), the state-owned enterprise, holds a monopoly over the sale and import of crude oil and petroleum products, operating Paraguay's only refinery, the 7,500 bbl/d Villa Elisa facility. This monopoly raises concerns about market competition and energy pricing, potentially impacting the broader energy sector's dynamics, including the adoption of new renewable technologies.^[3]

Under its National Development Plan 2014–2030, Paraguay aims for renewable energy, including solar and wind, to comprise 60% of its total energy consumption by 2030, while reducing fossil fuel use by 20%. This initiative is supported by policies like renewable energy subsidies and considerations for fossil fuel taxes.^[5]

Integration into the South American power market is crucial for Paraguay, enhancing regional energy trade and cooperation. This integration is anticipated to yield significant economic benefits through energy exports and bolster regional energy security. The strategic emphasis on expanding renewable energy sources is aimed not only at fulfilling environmental commitments but also at stimulating economic growth, creating jobs, and supporting industrial development. These efforts are integral to enhancing the resilience and sustainability of Paraguay's energy sector.^[2]