Article in Renewable Energy World on unutilized geothermal potential of South America

Mariposa Drilling Site, Chile (source: Magma Energy)
Alexander Richter 29 Oct 2013

A recent article in Renewable Energy World discusses that despite the great potential for geothermal in South America not that much has happened so far and that governments need to find a way to help the sector get ahead in development activities.

A recent article in Renewable Energy World, looks into why the great geothermal potential of South America stays largely undeveloped, despite the great opportunities and resources.

Being part of the Pacific Ring of Fire, the region still faces large barriers to development, with the article naming test drilling as a major obstacle. Mobilization cost of drilling rigs and the drilling risk, is seen as a difficult element for South American geothermal development. So while concessions have been handed over to the private sector, it has been difficult to raise the necessary financing.

But there is hope that things will change and the article highlights a slowly increasing sense of things happening. Recent news of Philippine EDC acquiring projects from Canadian Alterra Power and Australian Hot Rock in both Chile and Peru, as well as the increasing interest by the World Bank are signs that things are moving.

South American governments – according to the article – “have realized that they need to step in”, but have difficulties to understand how they can kick off development activities in their countries. In Chile it is discussed “to channel some type of subsidy or support to private developers”, but legally everything is “left to the private sector, from generation to transmission, which makes it difficult for the government to step in”. A feed-in-tariff, while not necessarily the silver bullet, is seen as a useful tool to speed up development.

It will be interesting to follow up. For more details about South American geothermal activities, also see our Spanish language sister publication

The article can be found in Renewable Energy World.