The National Congress approved a structural reform of the General Law of the Electricity Industry (LGIE) of 2014, called the Energy Justice Law, with modifications that cover the generation, storage, transmission, distribution and marketing of electricity.
Key changes include the reinstatement of an independent System and Market Operator (OSM) , the reorganization of the National Electric Energy Company (ENEE) into generation, transmission, and distribution subsidiaries, and greater openness to private participation in various segments of the sector. ENEE will remain the parent company, and its assets will continue to be state-owned.
“The objective of this second reform to the General Law of the Electricity Industry of 2014 is to resume the liberalization of the electricity market after the poor results of the nationalization of the sector,” said Leonardo Enrique Deras Vásquez , a member of the Regulatory Commission of Electric Energy (CREE), in an interview with Energía Estratégica .
The transformation finds Honduras with a significant share of renewable energy, but with growing needs for investment in infrastructure and flexibility. For reference, the 2026-2035 Indicative Generation Expansion Plan is based on an installed capacity of 3296.83 MW in 2024 , of which 60.5% corresponded to renewable sources .
Within that total, hydroelectricity contributed 927.4 MW; solar photovoltaic energy, 549.9 MW ; biomass, 239.83 MW; wind power, 238.1 MW; and geothermal energy, 40 MW.
BESS gains an explicit place in the market
One of the most impactful aspects for new investments is energy storage. The reform explicitly recognizes stand-alone systems and hybrid power plants with storage within the category of generating companies or agents, clearing up some of the uncertainty that previously surrounded their market participation.
“This law introduces for the first time a new agent, the generating-storage agent, which allows for clear signals to be given for investment in autonomous storage facilities that operate through arbitrage,” Deras explained.
The approved text also stipulates that storage systems may receive capacity payments based on their certified availability . Energy withdrawn from the grid to charge batteries will also not be considered final consumption, while the CREE (Energy Regulatory Commission) will be required to develop rules for arbitrage, ancillary services, and the use of transmission and distribution networks.
The regulator had already made progress on the technical framework. “Currently, the Regulatory Commission has already implemented the technical standard for hybrid power plant generation, which would allow the entry of energy and power associated with storage systems,” the expert indicated.
A specialized source in the Honduran sector consulted by Energía Estratégica identified arbitration as one of the aspects that needed greater legal clarity.
“There was a discussion, especially regarding legal interpretation, about whether the battery was a generator or not. This reform clearly establishes this and opens the door to arbitration,” he explained.
The change may expand the business models available to BESS by allowing them to take advantage of price differences between different market moments, in addition to other sources of remuneration that will need to be fully defined through regulation.
More room for new players
The reform also seeks to make the participation of qualified marketers and consumers more effective, figures that were already contemplated in the Honduran electricity framework but whose presence in the market is still limited.
Marketers will be able to use the networks to conduct transactions with consumers and other agents, while the CREE will have to establish the conditions of participation, access and corresponding charges.
Among the tasks that will accompany the implementation, Deras highlighted the need to "promote the creation of marketing companies, new transmission companies and promote the market of opportunity between private entities."
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He also highlighted as a priority "re-establishing a fully independent System and Market operator, not attached to the electricity company", in addition to moving forward with the spin-off of the currently vertically integrated ENEE.
The source consulted off the record agreed that the new framework could expand the number of participants, although he cautioned that the final effect will depend on how it is implemented.
“From an investment standpoint, ideally what's on paper would allow for market liberalization. Hopefully, new investments will materialize because the more players an electricity market has, the more demand benefits,” he stated.
US$899 million in transmission investments
Transmission will be another crucial area. The new framework stipulates that the projects included in the expansion plan can be developed through international public tenders , with participation from the OSM and regulatory oversight from the CREE, and opens up more space for private capital in lines and substations.
The challenge has a concrete dimension. The Transmission Network Expansion Plan 2026-2035 identifies 41 projects worth US$899.1 million , not counting certain works that are already under development or have financing.
Of the total amount, US$91.27 million corresponds to optimized network expansion, US$457.66 million to reliability and resilience projects and US$350.17 million to infrastructure aimed at improving the quality of distribution service.
The need for these investments already conditions the integration of the new generation in some aspects.
“Indeed, there are still areas with a transmission deficit that introduces restrictions on the flow of energy and, in some cases, even solar and wind power spills,” Deras said.
Among the steps following the reform, the commissioner specifically includes “promoting private investment in the construction and operation of transmission lines and electrical substations.”
The text also establishes mechanisms for works of particular interest financed by private entities, while future projects included in the expansion plan will be able to compete under international procedures.
Self-consumption and distributed generation
Distributed generation also retains a place within the new framework. The reform recognizes the right of users to install renewable energy systems to cover all or part of their own consumption and provides for remuneration of surplus energy injected into the grid under the mechanism determined by the CREE (Energy Regulatory Commission).
The regulatory challenge now lies in translating the reform approved by Congress into regulations and procedures that will allow the new market architecture to materialize.
In addition to storage and transmission, Deras identifies among the priorities the development of international public tenders for the purchase of energy, power and complementary services , although the design of these processes opens a separate chapter that is still under review.
For international developers, the commissioner believes that the combination of infrastructure deficit and regulatory openness can generate new opportunities.
“I could see investment opportunities in generation and transmission in a completely deficit-ridden system, developed through clean and transparent international tenders, using neutral technology, but with a preference for renewables,” Deras concluded.