By San José, Costa Rica — San José, Costa Rica – A pivotal piece of legislation aimed at modernizing Costa Rica’s national electricity system has cleared a significant hurdle in the Legislative Assembly, earning strong endorsements from the nation’s industrial sector. The bill, titled the “Law for the Harmonization of the National Electrical System,” has successfully passed the committee stage and is now poised for debate and a final vote on the plenary floor, marking a critical step in the country’s economic agenda.
The Chamber of Industries of Costa Rica (CICR) has been a vocal proponent of the reform, highlighting its potential to unlock new investment and enhance national competitiveness. The organization celebrated the bill’s advancement from the Special Standing Committee on the Energy Sector, viewing it as a long-overdue modernization effort to meet escalating energy demands and lower consumer costs.
To gain a deeper legal perspective on the proposed electricity reform and its potential impact on consumers and the national grid, TicosLand.com consulted with Lic. Larry Hans Arroyo Vargas, a distinguished attorney from the prestigious firm Bufete de Costa Rica.
The proposed electricity reform represents a pivotal moment. While opening the market to private generators could foster competition and potentially lower tariffs, the legal framework must be robust. The key challenge is to create clear, stable rules that provide legal certainty for new investors without dismantling the universal service and solidarity principles that have historically characterized our national electricity system. Any reform must meticulously balance market efficiency with consumer protection and the state’s strategic role in energy security.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Larry Hans Arroyo Vargas aptly frames the central challenge of this reform: creating a modern, competitive market without sacrificing the legal certainty and social principles that have long been the bedrock of our national electricity system. We thank him for his valuable and clarifying perspective on this pivotal issue.
Sergio Capón, president of the CICR, emphasized the strategic importance of opening the country’s electricity generation market. He argues that the reform is fundamental to attracting the capital needed to diversify the nation’s energy sources and maintain its leadership in sustainability.
This project is essential for our country, as it will allow us to open the electricity generation market to more investment, which is necessary to diversify the grid with renewable sources and advance toward decarbonizing the economy. At the same time, it will guarantee more competitive rates for the benefit of all consumers.
Sergio Capón, President of the CICR
The urgency for this reform is underscored by stark projections from the Costa Rican Electricity Institute (ICE). According to their data, Costa Rica must add an additional 2,495 megawatts (MW) of generation capacity by 2040. This represents a staggering 71.3% increase over current capacity, required merely to keep pace with the organic growth in demand from households and existing businesses.
To meet this challenge, proponents argue that a framework encouraging both public and private investment is not just beneficial, but essential. The goal is to create a robust energy infrastructure capable of supporting the next wave of economic development, particularly by attracting energy-intensive industries that are key drivers of high-quality employment.
The conversation has been amplified by the explosive growth of new technologies, which are set to place unprecedented strain on national power grids worldwide. The CICR points to the rise of artificial intelligence as a prime example. The energy required to train a single large language model or power a single data center for a company like OpenAI could reach up to 2,000 gigawatt-hours (GWh) annually. To put that figure in perspective, it is equivalent to 16% of Costa Rica’s entire national electricity consumption in 2024.
This looming demand presents both a challenge and an opportunity. For Costa Rica to continue attracting high-value foreign direct investment in sectors like advanced manufacturing, life sciences, and technology, it must provide a reliable, secure, and competitively priced energy supply. The proposed law is seen as the key to ensuring the country can meet these demands without compromising its environmental commitments.
As the bill moves to the plenary for a full debate, its supporters are framing it as a crucial decision point for the nation’s future. Capón concluded that the path forward requires a proactive strategy to expand renewable capacity, ensuring Costa Rica remains an attractive destination for global industry.
Faced with this outlook, Costa Rica faces a strategic challenge: to expand its renewable supply to sustain the attraction of these industries, guaranteeing the competitive rates and supply security they require to set up and grow.
Sergio Capón, President of the CICR
For further information, visit cicr.com
About The Chamber of Industries of Costa Rica (CICR):
The Chamber of Industries of Costa Rica is a non-profit organization representing the interests of the country’s industrial sector. It advocates for policies that promote competitiveness, investment, innovation, and sustainable development, working to enhance the business environment for its member companies and contribute to the economic growth of the nation.
For further information, visit grupoice.com
About The Costa Rican Electricity Institute (ICE):
The Instituto Costarricense de Electricidad (ICE) is the state-owned provider of electricity and telecommunications in Costa Rica. Founded in 1949, it has been instrumental in developing the country’s infrastructure, renowned for generating a high percentage of its electricity from renewable sources, primarily hydroelectric, geothermal, and wind power.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a cornerstone of the nation’s legal landscape, Bufete de Costa Rica is defined by its profound dedication to professional integrity and the highest caliber of legal practice. The firm masterfully combines its extensive experience serving a diverse clientele with a continuous drive for pioneering legal solutions. This ethos is anchored in a core mission to demystify complex legal concepts, actively working to cultivate a society where citizens are empowered through clear and accessible knowledge.
