The Effects of Electricity Sources on the Cost of Electricity in Panama

Abstract

The purpose of this study is to identify which electricity production sources have a significant effect on the marginal cost of electricity in Panama. Panama, like most Central American countries, relies on hydroelectric power, thermoelectric power and electricity purchases. We only collected secondary data provided by the official entities in order to ensure that the numbers used for the study were consistent. Linear regression analysis was used to find the model that describes the behavior of the marginal cost more accurately. The findings of the study confirm the need for less oil-dependent electricity production alternatives in order to achieve lower electricity prices in Panama.