Honduras’ energy intensity, as measured in terms of primary energy and GDP, has increased 3.5% between 2000 and 2017, compared to the region’s and world's change of -10% and -21% respectively, for the same period.

Since September 2015, Honduras made the conditional pledge — through its Nationally Determined Contribution —of reducing its CO2 emissions 15% by 2030 (compared to those in the 2016 baseline year) across its energy, industrial, transportation, and agricultural sectors. However, Honduras has no fossil fuel phase-out policy in place, nor has it set a net-zero emissions goal or a long-term low-carbon development strategy.

Honduras has a total installed capacity of 2.8GW. In 2019, just under a third of the country’s power came from oil- and diesel-fired plants; hydro accounted for 25% of generation, while renewables (biomass, solar and wind) were a combined 39.5%. Solar capacity has grown by 21% since 2015 to over 640MW in 2019.

Honduras attracted $2.7 billion in new clean energy investment in 2010–2019.

According to Bloomberg BNEF’s annual assessment of energy transition opportunities [1], which includes activities in clean energy and decarbonization of the transportation and buildings sectors, Honduras (score: 1.73) ranks 22nd among emerging markets and 49th in the global ranking of most attractive markets for energy transition investment (136 markets globally, including 107 emerging markets and 29 developed nations).

Honduras has been planning to implement a net metering policy for the last few years but has not completed the regulations to do so. Once in effect, the policy would oblige distribution companies to purchase surplus renewable power from residential and commercial users and give discounts on their bills. Decree 70-2007, published in June 2007, guarantees priority dispatch to electricity generated from clean sources. Renewable power is also exempt from income, import value, and sales taxes.

These investments were boosted by a feed-in premium for renewables that came into force in August 2013. PV projects up to 300MW installed by July 31, 2015, would be eligible to receive a base price for their energy equal to the short-term marginal cost plus $0.03/kWh plus 10%. However, this policy was cancelled in 2018 due to financial problems faced by the state utility, Empresa Nacional de Energia Electrica (ENEE).


Market conditions for developers of renewables in Honduras are not easy. ENEE has failed to pay a feed-in premium promised to solar plants commissioned by July 31, 2015, and this has undermined confidence.

There also exist formal barriers to renewables development. Power purchase agreements (PPAs) with renewable energy generators last up to 20 years but cannot be renewed after expiration.

The condition of the country’s state-owned utility, ENEE, presents significant uncertainty, however, as it faces serious financial challenges. In addition, the Honduras transmission network remains shaky. On September 16, 2019, a blackout affected most SIEPAC countries and Mexico. The cause was said to be heavy storms in Honduras. The fragile conditions of Honduras’ and Nicaragua’s transmission systems led to nationwide four-hour blackouts in both countries.

The government has yet to implement any substantive policy support in the building sector and the low-carbon heat market remains at an early stage.


Key policies and governance approach

The National REDD Strategy aims to mitigate climate change through forest conservation, sustainable forest management and enhancement of forest carbon stocks. 

The Nationally Appropriate Mitigation Actions (NAMAs) is one of the main vehicles for implementing the mitigation measures aimed to fulfil the commitments made in the NDC. Mitigation actions include:

  • Urban Public Transport: transition to more sustainable urban passenger transport in Honduras. Estimated mitigation: 200,000 t CO2eq/year. 
  • Operating Efficiency in Vehicles - private transport: reduce fuel consumption of vehicles through technical and training measures. Estimated mitigation: 150,000 – 200,000 t CO2eq/year.
  • Efficient Cookers: improve the quality of life of Honduran families living in poverty and cooking on open fires. Reduce pressure on forests through savings in the consumption of firewood used in traditional cookers, which will reduce associated GHG and black carbon emissions. Estimated mitigation: 6,328,688 t CO2eq total.
  • Sustainable Coffee: increase carbon sequestration and make the coffee sector more sustainable. Estimated mitigation: 440,000 t CO2eq/year.
  • Sustainable Livestock: increase carbon sequestration and sustainability of Honduran livestock farming. Estimated mitigation: 210,000 t CO2eq/year.

Additionally, the Special Law Regulating Renewable Energy Public Projects (2011) is also being implemented.


Initiatives and Development Plans

Clean Development Mechanism: Honduras had registered 34 projects as of December 2017. Four were rejected for eligibility under the Clean Development Mechanism (CDM) of the UNFCCC's Kyoto Protocol. Most CDM projects in Honduras focus on renewable energy generation, mainly hydropower. 

Voluntary carbon markets: Initiatives for voluntary carbon markets show the same trends as CDM. Four renewable energy (wind and hydro) projects had been registered in voluntary carbon markets via the Verified Carbon Standard, as of December 2017. There is a number of PoA registered via the Golden Standard, most of which promote energy efficiency at the household level through the use of efficient cookers and water filters to reduce firewood consumption. Overall, most initiatives aim to reduce or avoid GHG emissions; only the APROSACAO project seeks to increase CO2 sequestration through afforestation/reforestation in agroforestry systems with cocoa. 


Goals and Ambitions

The National Vision 2010-2038 and National Plan 2010-2022 set the following goals for the share of renewables in the electricity generation mix: 50% by 2017, 60% by 2022, 80% by 2034. Additionally, increasing the exploitation of hydropower resources from the current 5% to 25% by 2034.


Honduras has identified and planned for a number of initiatives aimed at making economic activities more sustainable and less carbon intensive. These include the National REDD Strategy, various NAMAs, CDM and voluntary carbon markets projects, among others. Most of these, however, are still to be implemented, for which, significant financial and technical resources are necessary.