Panama is a tropical country located in Central America, where the average temperature is 28 °C, although it can reach 32 °C in the city, with high percentages of humidity and where cooling and refrigeration makes up 53% of the final energy demand. That is more than 50% of the country's final energy production and yet, most of the energy transition debate in Panama has been focused on electricity. Why is air conditioning and refrigeration the blind spot of the energy transition in Panama?

Understanding the background

The National Energy Plan indicates that in 2000, 8.9% of households had ACs. For 2010, that figure increased to 15.6%, a significant increase if we take into account that the number of households also increased. Estimates by the National Secretariat of Energy show that by 2050, 66% of households will have at least one air conditioner, which means that more than 1 million households will have this equipment, mostly due to the increase in temperatures that climate change will bring.

For the commercial sector, for example, which is the main consumer of electrical energy in the country with more than 40% of national electricity consumption, it is estimated that, in 2050, 48.6% of the electricity consumption in the commercial sector will be due solely to the use of ACs.

One of the reasons for this high percentage of final energy consumption may be due to the way we build our cities. With a tropical, sunny and humid climate but with buildings that follow inappropriate modes of architecture, to be able to maintain comfort in offices and residences, the use of ACs is essential, coupled with the fact that citizens have fewer green spaces, foliage, and tree cover. Instead, Panamanian cities are made up of concrete and asphalt, following the models of first world countries cities.

Of these characteristics that the main cities of Panama have, we can only obtain the perfect ingredients to aggravate the effect of the heat islands, low energy security and little resilience to the effects of climate change. Therefore, it is not surprising that, during the first days of May, the integrated climate app of my cellphone recorded a temperature of 34 °C and a thermal sensation of 41 °C, and it is also not surprising that on Wednesday, May 4, a new record was reported in electricity demand, where for the first time, a country of 4 million people consumed 2,031 MW during the day, surpassing last year's previous record during this same month.

Although we cannot attribute the high energy demand to a single factor, it is undeniable to note that the increase in temperature during the month of May was one of the main causes, since it brought with it, the intensive use of ACs and fans. We cannot ignore that over the years and the current energy model, this could be an everyday situation.

At this point it is important to emphasize that while some refrigeration needs can be met with passive cooling solutions, this is not the case for existing buildings in Panama, where in most cases, equitable access to refrigeration depends on access to electricity to power cooling devices (active cooling). At the same time, continuing to depend on inefficient devices could have drastic consequences for energy demand, access to energy and emissions.

The situation in Panama is not isolated and is repeated in different places around the world whose climate is tropical. By 2050, average temperatures in Panama are expected to increase by 2.3 degrees Celsius. This increase in temperature makes it very clear to us that if we do not change the way we build our cities soon, the use of air conditioners will go from being a comfort to a necessity, as a measure of adaptation to climate change. With this in mind, we must ask ourselves how we can decarbonize existing air conditioning systems and how we can identify strategies that simultaneously address the need for refrigeration and provide access to modern energy, while responding to climate change, through a fair and equitable energy transition.

The challenge

Growing cities such as Panama are vulnerable to energy insecurity but can also be a focus of opportunities in terms of innovation. Decarbonising cooling is a multi-faceted challenge. Progress to decarbonise cooling can only be achieved effectively if energy efficiency is delivered and if policy, skills, cost, and consumer engagement are considered.

Regarding policies, there is government’s determination but also there is still a lack of specific, strategic action on its part to ensure that sustainable cooling targets are delivered.

The Government must urgently develop a cooling training program, in partnership with the industry. The training program should align with the Government’s own target to lower the GHG (Greenhouse Gases) emissions on their NDCs (Nationally Determined Contribution). It should also encourage young people to enter the sector.

A key financial barrier for the consumer in the transition to sustainable cooling is the upfront costs associated with installing more efficient equipments or inverter technologies. The costs currently lie too heavily on households for us to be confident that consumers will not baulk at the impact on their family budgets and can be a disincentive for the transition to happen.

Besides, ACs have a significant environmental impact: when refrigerants are released, they damage the ozone layer. The climate impact of a leak is a combination of the direct emission effect of the amount of refrigerant that is filtered into the atmosphere and the GWP (Global-Warming Potential) value of the gas. Chemicals like hydrofluorocarbons (HFCs) can be upward of 12,000 times more potent at trapping heat in the atmosphere than carbon dioxide.

This is precisely important since many installation technicians are unaware of the effect of releasing refrigerant gases during the maintenance process or do not care, and since there are no penal consequences in Panama that forces them to recover and recycle the gas, they end up releasing it into the atmosphere. This specially happens with independent installing technicians who people hire for small home AC installations, who usually wont have the equipment for recovery or aren’t directly supervised for it. In the end, gas leaks and releases, multiplied by millions of AC units will be devastating for the climate. The lack of clear policy action in the short-medium term means that AC installers have no immediate incentive to up-skill.

Switching to efficient AC is key. With greater energy efficiency, air conditioners do more with less. Plus, the Management Plan for the Phase-out of HCFCs in Panama (HPMP, in English), aims to achieve a 97.5% reduction in the HCF consumption baseline by 2030 and the total phase-out of HCFC consumption by 2040. As part of the HPMP, equipment has been provided to both the National Customs Control Authority and technical training centers, to strengthen these institutions in their work of verification/import control and labor training, respectively.

The electricity that powers air conditioners also needs to come from sources that don’t emit greenhouse gases. Luckily, Panama’s energy mix comes in a 70%, from renewables.

And, as in words of Umair Irfan for the Vox:​

Cooling may also require a more collective approach. Rather than installing ACs on every individual home, some areas can use district cooling systems.

It is a fact that there is a need to look at decarbonisation of cooling more holistically and with a greater level of understanding. Doing so will bring important implications for the future of tropical and under-developed countries like Panama, while it will help fight climate change, build resilience and save lives.

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