You can't harness rain that falls in the wrong place
For decades, Costa Rica has quietly demonstrated what the world insists is impossible — a modern nation running almost entirely on renewable electricity. Built on geography, foresight, and a 1949 law that placed energy in the hands of the state, this achievement now faces its most searching test: the very climate that filled its reservoirs is shifting, and the country must reimagine its grid before the rains it depends on begin to fail.
- Costa Rica's 99% renewable electricity grid — long held up as a global proof of concept — is now threatened by the drought conditions and shifting rainfall patterns that climate change is accelerating.
- The Arenal hydropower plant, one of the country's most critical generators, sits in the northern zone projected to lose significant rainfall by 2030, and a 2023 El Niño drought already cut reservoir inflow by 16 percent.
- A geographic mismatch deepens the crisis: future rainfall will intensify in the south and west, but the infrastructure to capture it simply does not exist there yet.
- Diesel backup plants — the system's emergency valve — are being leaned on more heavily as droughts persist, threatening to erode the clean-energy record Costa Rica has spent years building.
- ICE, the state utility, is pushing to diversify rapidly into solar, wind, geothermal, and battery storage, with its single-mandate public structure giving it a planning horizon that private utilities rarely enjoy.
- The coming years will determine whether Costa Rica can shift its grid from a water-dependent monoculture to a resilient, diversified portfolio — and whether its model can still inspire a world watching closely.
Costa Rica has spent nearly a decade running on almost entirely renewable electricity — a feat so rare that 75 consecutive days of 100 percent renewable generation in 2015 made international headlines. Today the country sustains around 99 percent clean power, dwarfing the United States' 20 percent. But this success story is now colliding with the very force that made it possible.
The foundation is hydropower, which accounts for 73 percent of national electricity generation. Geography helped — Costa Rica's tropical rainfall and mountainous terrain were made for dam construction — but so did a 1949 law establishing the state utility ICE with a mandate to develop natural resources for the public good. The real secret, according to ICE's planning director Kenneth Lobo Méndez, is long-range coordination: hydropower surges during the rainy season while wind, biomass, and geothermal fill the drier months.
Climate change is now testing that balance. Internal studies project that by 2030, rainfall will decline noticeably in the north, where most of Costa Rica's hydropower capacity sits. In 2023, El Niño offered a preview: reservoir inflow fell 16 percent, and the rainy season never fully restored them. The concern is immediate — rising temperatures are pushing electricity demand higher just as hydropower output weakens.
The situation carries a counterintuitive twist. Southern and western Costa Rica are projected to receive heavier rainfall in the long term, but the infrastructure to capture it isn't there. The plants are in the north. This geographic mismatch, as ICE engineer Marco Jiménez Chavez puts it plainly, demands diversification — more solar, more wind, more geothermal, and crucially, large-scale battery storage to manage the variability those sources introduce.
For now, diesel thermal plants serve as backup when the sun sets and the wind stills. Drought is likely to push fossil fuel use higher in 2024, and neighboring Central American countries — potential trading partners — face the same hydropower pressures. Yet Costa Rica holds a structural advantage: a single state utility with a decades-long mandate and no shareholder pressure allows for the kind of patient, mission-driven planning that fragmented private markets struggle to replicate.
The next few years will reveal whether the country can move fast enough — shifting generation from north to south, from water to sun and wind, from one dominant source to a portfolio built for uncertainty. Costa Rica's grid is not just a national achievement; it is a global proof of concept, and what happens here will be watched far beyond its borders.
Costa Rica has spent nearly a decade running on almost entirely renewable electricity—a feat so rare that when the country hit 100 percent renewable generation for 75 consecutive days in 2015, it made international news. Today, the country sustains around 99 percent renewable power, a figure that dwarfs the United States, which generates just over 20 percent of its electricity from clean sources. Yet this success story is now colliding with the very force that made it possible: a changing climate that threatens to upend the systems that have kept the lights on.
The foundation of Costa Rica's renewable dominance is hydropower, which accounts for 73 percent of the country's electricity generation. The reason is straightforward: geography and foresight. Costa Rica sits in a tropical zone with heavy rainfall and terrain that naturally lends itself to dam construction. More importantly, a 1949 law established the state-run utility Instituto Costarricense de Electricidad (ICE) with a mandate to develop the nation's natural resources for electricity. Hydropower was the only technology available then, and it became the backbone of the system. But the real secret, according to Kenneth Lobo Méndez, the director of planning and sustainability at ICE, is planning itself. The utility mapped out how different energy sources could complement each other across seasons—hydropower surges during the rainy winter months from June to December, while wind, biomass, and geothermal fill gaps during the drier summer period from December to May.
Climate change is now testing this carefully balanced system. Internal studies show that by 2030, rainfall in the northern part of the country—where most of Costa Rica's hydropower capacity sits—will decline noticeably. The Arenal plant, one of the nation's most critical generators, sits directly in this threatened zone. In 2023, the country experienced a preview of this future. El Niño and drought conditions reduced inflow to hydropower reservoirs by 16 percent, and the rainy season failed to restore them to normal levels. The concern is immediate: the hot season of 2024 could strain the system further, as higher temperatures drive up air conditioning use and electricity demand while hydropower output remains depressed.
There is a counterintuitive silver lining. Climate models suggest that southern and western Costa Rica will experience heavier, more intense rainfall in the long term. But the country's hydroelectric infrastructure is not positioned to capture that water. The plants are in the north, where rain will become scarcer. This geographic mismatch forces a reckoning. Marco Jiménez Chavez, an engineer working on generation expansion planning at ICE, puts it plainly: the solution is diversification. Solar and wind farms must expand significantly. Geothermal energy, which does not fluctuate with weather patterns, becomes increasingly valuable. And batteries—large-scale energy storage systems—become essential infrastructure, not optional upgrades.
The challenge is that renewable sources introduce new complications. Hydropower is stable and predictable; solar and wind are variable. Add more of them to the grid, and the system becomes harder to balance. When the sun sets and the wind dies, something must fill the gap. For now, that something is diesel thermal plants, which ICE uses as backup power. The utility has kept fossil fuel generation to a small percentage, but drought conditions are likely to push that number higher in 2024. The regional electricity market—trading power with neighboring Central American countries—offers limited relief, since those nations face the same climate pressures and hydropower shortages.
What gives Costa Rica an advantage in navigating this transition is its structure. Unlike the United States, with its patchwork of private utilities answering to shareholders, Costa Rica's electricity system is managed by a single state company with a long-term national vision. ICE can plan for decades without pressure to maximize quarterly profits. It can prioritize environmental and social concerns—consulting communities before building dams, even if it costs more—because the mandate is to serve the country, not investors. This does not solve the climate problem, but it removes one layer of friction from the solution.
The next few years will reveal whether Costa Rica can execute the transition fast enough. The country has proven it can build and maintain a renewable grid at scale. Now it must prove it can adapt that grid as the climate shifts beneath it, moving power generation from north to south, from water to sun and wind, from a single dominant source to a diversified portfolio that can weather uncertainty. The stakes are high: Costa Rica's electricity system is not just a national achievement but a global proof of concept. What happens here matters far beyond its borders.
Citas Notables
The secret of this achievement is mainly planning. Identify the capacity of different energy sources so you can get the big picture about how different resources can work together.— Kenneth Lobo Méndez, director of planning and sustainability at ICE
The thing with a renewable energy system is that you also need to diversify so that you won't be subjected to only the availability of water. Hydropower will still be a great percentage, but new energy sources will be added—solar, wind, and geothermal.— Marco Jiménez Chavez, engineer at ICE
La Conversación del Hearth Otra perspectiva de la historia
Costa Rica's grid is 99 percent renewable, but you're saying climate change is actually forcing them to build more fossil fuel plants. How does that work?
Not more plants, exactly—but more reliance on the diesel backup they already have. The problem is that hydropower, which is 73 percent of their electricity, depends on rainfall in the north. Climate change is drying out the north while making the south wetter. But their dams are in the north, so they can't capture that southern rain. When hydropower drops, they need something to fill the gap immediately, and that's where diesel comes in.
So they're trapped. They can't move the water, and they can't wait for solar and wind to be built.
Exactly. That's why diversification is urgent. They need solar, wind, and especially geothermal—which doesn't depend on rain or sun or wind, just heat from the earth. And batteries, to store power when the sun sets and the wind stops.
Why hasn't Costa Rica done this already if they're so advanced on renewables?
Because they didn't need to. Hydropower was so abundant and so stable that the system worked. You don't overhaul something that's working. But climate change is forcing the overhaul now, in real time, while they're still running the grid.
Is the state utility structure actually helping them, or is that just what they're telling you?
It's genuinely helping. A private utility answers to shareholders and quarterly earnings. ICE answers to the country. They can plan 20 years out without worrying about stock prices. They can spend more money on community consultation before building a dam because the goal isn't profit extraction. That doesn't mean they're perfect, but it removes one major obstacle to long-term climate adaptation.
What happens if they can't diversify fast enough?
They burn more diesel. They buy power from neighbors, but those neighbors have the same problem. And they risk blackouts during peak demand in the hot season, which is exactly when people need air conditioning most.