The Energy Transition in Costa Rica

Costa Rica stands out globally for its renewable energy leadership, achieving over 98% of its electricity generation from renewables, primarily hydropower, geothermal, wind, and solar. The country’s National Decarbonisation Plan 2018–2050 and Electricity Sector Expansion Plan set ambitious targets to fully decarbonise the economy, including transport electrification and energy efficiency across sectors. The Costa Rican Institute of Electricity (ICE) leads energy planning, supported by robust legal frameworks that encourage private sector involvement and innovation. While Costa Rica excels in clean power generation, it does not produce critical minerals domestically and relies on imports for key materials such as lithium, cobalt, nickel, and rare earth elements essential for batteries, electric vehicles, and grid storage technologies. The nation’s geothermal capacity offers unique flexibility, but drought-linked hydropower risks highlight the importance of energy diversification. Challenges include grid modernisation needs, financing for large-scale storage, and balancing renewable intermittency. However, Costa Rica’s political stability, strong environmental governance, and global reputation for sustainability provide a solid foundation for deepening its energy transition. The country’s integrated approach to renewable deployment, climate policy, and regional leadership reinforces its position as a global benchmark for decarbonisation and green growth.