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Feature: Geothermal power gains traction in Latin America

By the Potencia correspondent

7 April 2014 – Diversity is something that characterizes energy resources in Latin America. The region enjoys several ways to produce electricity, especially through low-carbon resources. Many governments have approved ambitious hydro, wind and solar projects but geothermal power also plays a key role in the future of generation in those countries.

The heat inside earth is a chance to produce energy that must be used. Mexico is a place with big wealth below the surface and many geothermal projects are being executed. In fact, the country provides 7 per cent of the world’s generation. Those figures make Mexico the fifth producer at a global scale.

Only the US (28.6 per cent), Philippines (16.1 per cent), Indonesia (11.6 per cent) and Italy (7.7 per cent) are before Mexico in terms of geothermal power. These five countries produce 71 per cent of the world’s generation.

In Mexico, 2.02 per cent of the electric production comes from geothermal sources. An article by Mexican daily El Financiero claimed geothermal production in the country currently reaches 958 MW.

Figures from the International Energy Agency (IEA) said that the energy production through this source on a global scale will increase 27.9 per cent until 2035. Mexico and other Latin American countries will play a key role in the geothermal energy’s growth in the coming years.

IEA sources said that about $2bn were invested in 2012 to develop geothermal projects, with developing countries leading investments, totalling $1.4bn.

The cost of geothermal production is so cheap if compared to other renewable sources with an average of $52 MWh. On the other hand, solar energy on a large scale could reach $280/MWh, offshore wind power $100/MWh and biomass $131/MWh, according to figures from Renewable Energy Prospect, a report made by the Energy Secretary of Mexico’s federal government.

The impact of geothermal energy in that country is expected to reach such goals. The Energy Secretary announced new laws to regulate the market in light of this increase. Through the Geothermal Energy Law the Federal Electricity Commission (CFE), Mexico’s electric market watchdog, will be able to choose the best geothermal areas, leaving the rest to private projects.

The main geothermal stations in Mexico are Cerro Prieto, located on the state of Baja California, Los Azufres (Michoacan), Los Humeros (Puebla) and Tres Virgenesà‚  (Baja California Sur). There are 104 projects overall including operating plants and projects at the tendering stage. From now up until 2027 geothermal plans could be increased by up to 254 projects.

Nicaragua and other Central American countries are seriously considering geothermal power benefits in the near future. Nicaraguan newspaper El Nuevo Diario said that the country has enough resources to produce up to 1,500 MW. However, the current production reaches 164.5 MW, according to figures from the Nicaraguan Energy Institute (INE).

Nicaragua gets 16.7 per cent of the renewable energy production from geothermal sources. Only hydropower plants generate more power in the country.

Two stations get all Nicaragua’s geothermal production. They are Ormat Momotombo Power Company (77.5 MW) and 87-MW San Jacinto Tizate, operated by Canadian company Polaris Energy.

Plans of the Nicaraguan government include 17 new geothermal projects to be developed mainly in areas throughout the volcanic mountain chain of Los Maribios. Costa Rica is Central America’s biggest producer of geothermal energy, according to figures from the United Nations Economic Commission for Latin America and the Caribbean (UNECLAC). There are 217.5 MW of installed capacity in the Costa Rican territory. El Salvador is other important producer with 204.4 MW.

In neighbouring countries like Guatemala there are geothermal plants in operation as well, while others, like Panama and Honduras, are beginning to explore their geothermal power potential.

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