News

A law firm’s look at the energy market in Chile, Colombia, Mexico and Peru

Manifestación termal - Pampa Lirima, Chile (source: Energía Andina)
Alexander Richter 5 Sep 2019

A recent Latin America Energy Market Update shared by law firm CMS, highlights the incredibly underrepresented state of affairs for geothermal in Chile, Colombia, Mexico and Peru.

In its quarterly Energy Update for Latin America, international law firm CMS shares details about the energy industries in the countries of Brazil, Chile, Colombia, Mexico and Peru.

With Chile, Colombia, Mexico and Peru being geothermal countries, only in the context of Chile geothermal is mentioned. … at least the title page of the newsletter shows geothermal features … likely in the Andes.

While the overall potential for geothermal power generation is stated at 3,000 MW it is naturally far from sure that we see much development towards reaching this number. The only operating plant is the 48 MW Cerro Pabellon geothermal power plant, which now sees the start of a 33 MW expansion. Apart from that not much is happening, apart from news in April 2019 on an exploitation license given to private developer Transmark.

So while there is talk about the “tremendous possibilities for thermal use” and the “privileged position globally for the electric or thermal utilisation of this energy source”, if things will really progress will have to be seen.

In the context of Mexico, not much positive can be read. Not a single mention of geothermal in the report, while reports on a shortage of natural gas and the corresponding need for imports of natural gas from the U.S. are not drawing a promising picture. While a clear focus on solar is sensed, the fact of secure, baseload renewable energy technology provided by geothermal not even mentioned is sad. But given the role of a law firm, it shows that there is not much going on on the geothermal front.

For Peru, the cooperation agreement of Peru and Bolivia on energy integration are providing hope for possible cross connections utilising geothermal energy resources. If this would include the efforts at the Laguna Colorada geothermal project in Bolivia or potential geothermal development in Peru is unclear. It though seems that the Ministry of Energy and Mines in Peru is preparing an auction for renewables in the Loreto region.

For Colombia, a new call for a tender for long-term contracting of electric power through non-conventional renewable energy sources. The tender though is a competitive mechanism for “efficient” prices. If this would allow geothermal getting a fair chance due to its baseload opportunity is unclear.

The full report looking at the aforementioned countries can be downloaded here. (a Spanish version of the report is available here)

Source: CMS