Identifying Latin America’s geothermal power potential

By a Potencia correspondent

As Latin America’s renewable energy base grows fuelled by its vast natural resources and the growing demand for power, geothermal energy, which harnesses the internal heat of the planet, is gaining particular popularity in the region.

The rise of geothermal energy is just one more element of a growing sector in the region. Last year, Latin America became the region to invest the most in this sector.

According to the Inter-American Development Bank (IADB) and the UN, it invested $13.1 billion, a 39 per cent increase from a year before.

Already 70 per cent of the energy generated in Latin America is of renewable origins and 30 per cent of it satisfies primary concerns like transport, industry and commerce, which is 13 per cent higher than the global levels.

In fact, Brazil and Costa Rica are one of the top nations when it comes to generating renewable energy on earth, according to estimated by the IADB. But the development of geothermal projects is also rising in other parts of the subcontinent.

In Mexico, for example, the investment in renewable energy rose an impressive 348 per cent in 2010, particularly in the areas of wind and geothermal energy. This increase was triggered by the decision in the country to increase the capacity of renewable energy projects from 3.3. per cent to 7.5 per cent in 2012.

Another country with great potential is Peru. There geothermal projects have contributed to the development of the country, according to press reports. The growth in the sector is linked to Peru being the leading exporter in South America with levels only comparable with those of Italy and New Zealand, according to a report on the geothermal prospects of the country 2010-2011.

However, some still think geothermal energy is in its infancy in the country since the costs of exploration amount to about $4 million which makes the operation expensive.

In Chile, there are already 21 new geothermal projects. This Latin America nation is filled with suitable volcanic areas for the generation of geothermal energy. The government is conscious of such wealth and has initiated a process of public auction through which it will grant to 21 new areas of operation in the regions of Tarapaca and the Rivers, according to a news report in La Nacion.

Sources at the Chilean Ministry of Energy calculate the project will generate $100 million in investments of exploration and development. The government hopes that by 2011 it will be able to auction other 50 geothermal concessions and another 120 in the period 2012-13.

New Zealand company Hot Rock is one of the most active firms in the search of the geothermal potential of Chile. The company calculates that the country can generate 5000 MW through geothermal means.

Another key nation in the geothermal energy development is Bolivia. A key region in the southwest of the country bordering Chile could have the potential to generate 6500 MW in geothermal power, a similar amount to Ecuador’s potential.

In Central America, geothermal energy has gradually gained prominence and it is now the second source of renewable energy in the region. It is expected that the region will produce 5000 MW in geothermal energy distributed among Guatemala, El Salvador, Nicaragua and Costa Rica. It is not yet clear what is Honduras and Panama’s potential.

Such is the importance of geothermal energy in Central American that Inversiones Energeticas, a firm with a stake in geothermal plant LaGeo in El Salvador, will appeal against an international court of law ruling in favour of Italian investors taking over the plant in an effort to extend the legal battle close to a year, according to El Faro newspaper.

Enel Green Power has said it was injecting capital in exchange for the acquisition of the 95 MW plant. But the Comisiàƒ³n Ejecutiva Hidroeléctrica del Ràƒ­o Lempa through Inversiones Energéticas appealed against the takeover to the Arbitration Court in France. However, the court subsequently ruled in favourable to Enel Green Power, and it is this decision that Inversiones Energéticas is now appealing against.

In Costa Rica, the country’s electricity institute, ICE, is in advanced talks to put together a geothermal pilot Project with a capacity of 12 MW with American company GTherm.

The company’s single-well engineered geothermal system does not require water depositories. Besides, the infrastructure is mostly buried, which it does not produce any hydraulic or visual contamination while generating clean and sustainable energy.

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