Is Panama's Electricity Supply Safe During El Niño? What the 2026 Data Reveals

Does Panama have enough electricity to keep the lights on during El Niño? According to the latest available official figures, the country has a substantial cushion of generation capacity, even during periods of reduced rainfall.

Panama's electricity regulator, the Autoridad Nacional de los Servicios Públicos (ASEP) , reports approximately 5,120 megawatts (MW) of installed generating capacity and 3,053 MW of firm capacity. That compares with peak monthly demand of 2,094 MW in May 2026.

Even when considering only firm capacity, Panama's generating resources are approximately 1.5 times peak demand. That provides an important buffer against reduced hydropower production during dry conditions.

However, electricity experts have identified two concerns that deserve closer attention: transmission bottlenecks and electricity price volatility . Having enough electricity available nationally does not necessarily mean it can always be delivered reliably to every community.

The discussion follows comments made in November 2026 by Miguel Bolinaga, president of AES Panamá, one of the country's major electricity generators. He argued that decades of investment have helped protect Panama's electricity system from rationing.

According to El Capital Financiero , the industry has received approximately $12.365 billion in cumulative investment over 26 years. We examine that claim alongside ASEP's published statistics and regional electricity developments.

The reported investment represents cumulative spending across three major components of Panama's electricity industry: generation, distribution and transmission.

Reported by El Capital Financiero and Revista Summa for 1999 to 2025. The stated category amounts and percentages do not reconcile exactly with the reported $12.365 billion total.

Both El Capital Financiero and Revista Summa reported the same cumulative investment figure for the period from 1999 to 2025.

However, neither publication identifies the underlying dataset, and the figure could not be independently located in ASEP's published electricity statistics. It should therefore be treated as an industry estimate attributed to AES Panamá, rather than a separately verified regulatory total.

Reliable, directly comparable per-capita electricity investment data for neighboring countries was not available from a consistent regional source. Instead, a more useful comparison is what the investment has produced in terms of electricity generating capacity and consumption.

Panama's electricity generation system is relatively diversified, combining hydroelectric power, natural gas, solar, wind and several conventional thermal technologies.

According to ASEP's May 2026 electricity statistics, the country's total installed generating capacity reached 5,120.19 MW.

Source: ASEP, Estadística del Mercado Eléctrico Panameño, May 2026. Percentage shares are rounded.

Grouping the technologies by energy source provides a clearer picture of Panama's electricity generation mix.

The distinction between installed capacity and firm capacity is particularly important during El Niño. Installed capacity describes the maximum rated capability of the country's plants, while firm capacity represents the dependable generation capacity recognized for planning.

Electricity consumption per person provides another perspective on the scale of a country's electricity system and its level of demand.

According to the World Bank figures cited for 2023, Panama consumed approximately 3,082 kilowatt-hours (kWh) per person. That places the country above several major Latin American economies, including Mexico, Colombia and Costa Rica.

Source: World Bank - Electric Power Consumption Per Capita . Figures presented for 2023.

These figures should not be interpreted as direct evidence of greater infrastructure investment. Electricity use is influenced by climate, household income, commercial activity, industrial demand and the structure of each country's economy.

The comparison does, however, illustrate the relatively high level of electricity demand supported by Panama's power system.

El Niño presents a particular challenge for electricity systems that depend on rainfall and hydroelectric generation. Lower precipitation reduces water availability in reservoirs and rivers, potentially limiting the amount of electricity hydropower plants can produce.

Panama declared a national emergency related to El Niño in late August 2026. We previously examined that declaration in Panama Just Declared a National Emergency Over El Niño: Here's What That Means for the Canal .

According to figures from the national grid operator reported by La Prensa , hydropower supplied approximately 45% of Panama's electricity generation between January and July 2026.

Over that period, monthly hydropower output declined by approximately 23%, falling from around 575,000 megawatt-hours (MWh) in January to approximately 441,000 MWh in July.

To compensate, thermal electricity generation increased by nearly 90% between January and June. The Bayano reservoir was reportedly at just 27% of its operating range and was not contributing to generation at the time of the report.

Although Panama appears to have sufficient generating capacity, changing weather conditions can affect the cost of producing electricity.

When inexpensive hydroelectric generation declines, the system may require more output from thermal plants that use natural gas, fuel oil or other fuels. This can place upward pressure on electricity market prices.

One measure tracked by ASEP is the system marginal cost, which reflects the cost of the last megawatt-hour required to satisfy demand.

Source: ASEP electricity market statistics. Panama's balboa is pegged at parity with the U.S. dollar.

Over the 12-month period shown, average monthly marginal costs ranged from approximately $40 to $86 per MWh.

However, La Prensa reported episodes during June 2026 when marginal costs exceeded $100 per MWh, with some hourly prices approaching $200 per MWh.

AES Panamá president Miguel Bolinaga has pointed to electricity difficulties in countries such as Costa Rica, Guatemala, Ecuador and Colombia during periods of reduced rainfall.

Two regional examples illustrate how drought conditions can place significant pressure on national electricity systems.

Ecuador: During a severe drought in October 2024, Ecuador imposed scheduled electricity blackouts lasting up to 14 hours per day. The measures were reported by AFP through Noticias RCN and reflected the country's dependence on hydroelectric generation.

Colombia: The electricity grid operator XM has warned of possible stress on the national power system between December 2026 and April 2027 because of El Niño and declining reservoir levels.

According to Cambio Colombia , the concern relates to potential supply pressure during the dry season. No nationwide electricity rationing had been scheduled at the time of reporting.

Comparable crisis claims regarding Costa Rica and Guatemala could not be independently confirmed from the sources examined.

Independent energy experts generally identify risks different from a straightforward shortage of generating capacity.

In the La Prensa analysis , former national energy secretary Víctor Urrutia indicated that the availability of generating capacity should not represent a major supply risk.

Cristóbal Samudio, a senior consultant at Nexergy, identified price volatility as a more immediate concern, rather than permanently elevated tariffs.

Both experts also pointed to electricity transmission infrastructure as a potential weakness. In particular, transmission corridors connecting Colón and Panama City face periods of heavy system stress.

These pressures were described as potentially intense but temporary, rather than evidence of a permanent national electricity shortage.

Looking further ahead, AES Panamá has emphasized the need to begin long-term electricity procurement planning early, noting that combined-cycle generating plants can take several years to develop.

The company expects national electricity demand to finish 2026 near 14,000 gigawatt-hours (GWh). Potential future developments, including data centers, railway infrastructure, the Fourth Bridge and additional ports, could further increase demand.

For people buying or owning property in Panama, the distinction between national electricity supply and local power reliability is important.

Based on the available generating capacity, nationwide rationing caused solely by a generation shortage appears unlikely during the period examined. However, this does not mean that individual properties will never experience power interruptions.

Local reliability depends on the condition of transmission lines, distribution networks, substations and the infrastructure serving each particular neighborhood.

This is especially relevant when evaluating homes and investment properties outside Panama City, including rural and coastal communities throughout Boquete, Chiriqui, Pedasi, Playa Venao, Cambutal, Torio and the broader Azuero Peninsula .

For a potential buyer, it is worth asking about the property's history of power outages, the condition of local utility infrastructure and the availability of backup systems.

Solar photovoltaic systems already account for approximately 15% of Panama's installed generating capacity. For individual homeowners, rooftop solar, battery storage and backup generators may also be worth evaluating, depending on local conditions.

Buyers should also examine actual utility bills, the electricity requirements of appliances and air conditioning, and the installation and maintenance costs of any backup system.

Ultimately, Panama's strong generation capacity is encouraging at the national level, but property-level due diligence remains essential. Two homes in different locations can have very different experiences with electricity reliability and operating costs.