Chile: geothermal legislative initiative

With geothermal resources estimated to be from 3.5 to 20 GW, Chile has a strong potential for development in this sector. But, as in Indonesia, a lot of the potential hasn’t seen results in installed capacity. To this day there is no geothermal power plant in the country. The reason for that is mostly a legislation that doesn´t foster geothermal development, but hinders it.

Geothermal development requires a major state role, either through incentives or through clear legislative initiatives that help companies in developing existing resources.
The Chilean energy commission and the Ministry of Mining have therefore decided to push for a new legislative initiative, which improves access to necessary concessions, but also to evaluate applications more efficiently.

As Chile’s minister for energy, Marcelo Tokman, puts it, “it is often not to be established if the applicant is serious in its bid or only acts in a speculative capacity.”
The application procedure will therefore be simplified, with a waiting time decreased by around 40%. Furthermore, the governmental development agency Corfo, will take part in the geological risks of the exploration of a project.
But the new legislation would also put restraints on concession holders, which now have to clearly show investments into the project. Concession areas cannot be held without concrete work on the resource and development. Should a company than return a concession, then all knowledge and data gained through the work on the concession will have to be transferred to the authorities. This will help a transfer of knowledge and data to new parties interested in those concessions.
On November 15, 2008, the ministry for mining already announced a tender for the concession areas Puculdiza Sur 1 and 2 in Northern Chile. Proposals can be handed in until March 31, 2009. In the near future there are plans for seven more concession areas to be put into a tendering process.
Sources: Business News Americas, geothermie.de