Power policy

Bolivia has no comprehensive clean energy policy. Its National Development Plan 2017-2020 commits to a total installed capacity of 4.9 gigawatts by 2020, with a 1.4-gigawatt expansion in hydro capacity, 411 megawatts of new wind, biomass, geothermal and solar, and 1.1 gigawatts of new combined cycle and gas generation. At end-2019, the country had 3.6 gigawatts of total installed capacity and 249 megawatts of renewables (excluding hydro). As of November 2020, no new utility-scale projects had been commissioned and none were in the pipeline. In its Intended Nationally Determined Contribution to the U.N. Framework Convention on Climate Change, Bolivia commited to a goal of increasing its share of ‘alternative’ energy (wind, biomass, geothermal and solar) and other sources of energy (combined cycle) to 9% in 2030, up from 7% in 2017. In 2014, the country published Decree 2048 to encourage clean-energy development.

Development of clean energy projects in Bolivia is led by state-owned Empresa Nacional de Electricidad (ENDE), with investment coming from international development banks and the Central Bank of Bolivia. The role of solar generation solidified in 2018, as ENDE commissioned 65MW in Tarija and Potosí departments, a large increase compared to the 5MW project in Pando installed in 2015. A 50MW PV plant, financed by European development agencies, was also commissioned in Oruro in 2019. Bolivia’s first wind farm, Qollpana phase I (3MW) was commissioned in 2014 with a second phase (24MW) brought online in 2016. A pipeline of four wind projects, financed over 2017-18, may further the addition of 132MW of new capacity in the near term.

The Bolivian government has introduced, through Supreme Decree 4477, a net metering scheme for distributed-generation renewable energy power generators.

Fiscal incentives: Law 3279 and Law 3525 of 2005 gives five years of VAT and import duty exemptions for renewable energy equipment. Supreme Decree 280 of 2009 gives import duty exemption for solar and small-scale wind power equipment.

Power prices and costs

Bolivia's electricity prices are set by the government and, as Bolivia is a natural gas producer, dependent on heavily subsidized gas-powered generation. However, only 60.8% of the 9.5 terawatt-hours generated in 2019 came from gas plants, compared to 72% in 2017 and 68% from 2018. The share of hydro generation increased from 28% to 34%, and the share of solar generation increased from 0.1% in 2017 to 1.9% in 2019. Electricity prices continue to rise, although rates remain low compared to most countries in Latin America. In 2020, the average commercial electricity price was $167.67/MWh, while industrial and residential electricity prices were $98.24/MWh and $120.12/MWh, respectively.

Power market

Bolivia's electricity prices are set by the government and, as Bolivia is a natural gas producer, dependent on heavily subsidized gas-powered generation. However, only 60.8% of the 9.5 terawatt-hours generated in 2019 came from gas plants, compared to 72% in 2017 and 68% from 2018. The share of hydro generation increased from 28% to 34%, and the share of solar generation increased from 0.1% in 2017 to 1.9% in 2019. Electricity prices continue to rise, although rates remain low compared to most countries in Latin America. In 2020, the average commercial electricity price was $167.67/MWh, while industrial and residential electricity prices were $98.24/MWh and $120.12/MWh, respectively.

Doing business and barriers

Bolivia's energy reform prioritizes the electrification of rural areas, aiming for universal access by 2025. As a consequence, demand for electricity is rapidly growing, rising 5% annually on average since 2010. However, peak demand was flat in 2019 compared to 2018, remaining at 1,512 megawatts. Much rural electrification takes the form of off-grid projects, mainly relying on thermoelectric generators and solar photovoltaics. Business opportunities for renewables are on the rise after the first projects were commissioned in the past year. The largest planned projects are hydroelectric dams, as the country views them as the fastest way to achieve clean energy targets and increase exports to neighbors.

Renewable energy is hindered by Bolivia's reliance on heavily subsidized natural gas, which lowers power prices and blocks competition. The nationalized energy sector and foreign companies also lack clear incentives to grow renewable capacity, and projects must be financed without the option of PPAs. There is no in-country manufacturing capacity for solar or wind components, so those technologies must be imported.

EV market

The government has yet to implement any substantive policy support in this sector and the EV market remains at an early stage.

EV policy

Bolivia has tax and financial incentives for the manufacture, assembly, purchase and import of electric, hybrid motor vehicles and electric and hybrid agricultural machinery. Also, the Tariff Levy and Specific Consumption Tax - ICE for electric and hybrid motor vehicles have been modified. This change in the aliquots for the payment of ICEs will stand for five years from the publication of this Supreme Decree. After this period the corresponding aliquots will be restored.

Buildings market

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

Buildings policy

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