Chile urgently needs public policies to promote geothermal energy development

In an interview with Energía Estratégica Latam, Diego Morata, Director of the Center of Exellence for Geothermal Energy of the Andes (CEGA) at the University of Chile, highlights his and his center’s view on the potential for geothermal energy in Chile and what national authorities can do to promote development.

What role should geothermal energy have in the decarbonization plan that Chile faces? 

Geothermal energy should have a central role in the decarbonisation plan of the energy matrix. It is the only renewable, clean and local energy – own – able to operate 24/7, independent of the weather and the seasons of the year, and in that sense, it is the only clean energy with an appropriate plant factor to replace coal, which what it does is just supply energy in a constant, but polluting way. That is to say, as of today, it is the only renewable energy that can be considered as base energy, which is why it is what gives stability and security to the energy matrix. The issue is that for geothermal to play that role from here to 2050, we need public policies to encourage their development now, and not in 5 or 10 more years, because developing geothermal projects in Chile takes time. International experience shows that it takes between 8 to 10 years to be able to specify a geothermal project. The analysis carried out within the Geothermal Table, where geothermal companies participated, the Ministry of Energy, developers and the academy (CEGA participated actively in these work sessions) indicates that by 2050 in Chile some 1300 MWe could be operating (approx), about 1000 MWe electric less than the potential installed today with coal. But, without a doubt, to get to have at least those 1200-1300 MWe electric with geothermal energy by 2050 we would have to be, as a country, preparing the actions to be developed. Therefore, if we continue to wait, however fantastic the geothermal energy,

From the economic point of view … How do you currently compete with other renewable sources? 

Renewable energies do not compete, they complement each other. The idea is not to relieve or raise one over the other, the renewable energies of Chile must act in a joint, support. It is clear that today it is cheaper to generate electricity using photovoltaic solar. But we must consider the intermittence in the supply, which does not have geothermal energy. It is not a matter of competences, but of complementarity. There are examples in the world of mixed plants, which mix solar and geothermal, for example. We, at CEGA, are beginning to develop a research program in that line and the results are encouraging, especially in the north of Chile, where there is a huge solar potential and there are also interesting geothermal projects.

The energies as such do not compete, what could compete are the policies that promote them, because there may be enough efforts to lift some and no efforts to promote those that today need legislative support such as geothermal energy.

And what changes should the regulatory framework adopt to encourage its use?

There must be a consensus among the political class that Chile needs to diversify its energy matrix and look for solutions in renewable energies. It is undeniable that we are already suffering the effects of climate change. And these effects seem to be being more dramatic and at a faster rate than initially thought. In this context of climatic uncertainty, international turbulence and a decarbonisation plan and generation of a matrix based on renewables, geothermal energy should be at the center of the table. It is not about asking for subsidies. It’s more simple. It is about establishing electricity quotas by blocks and that can compete sources of electricity generation that ensure stability and independence to the electrical system. You can not put “all the eggs in the same basket”. We must accept that the electricity supply of a country is a matter of state, of internal security. Chile can not continue to depend on fossil fuels that it lacks. Without a doubt, public policies are needed to guarantee the development of non-intermittent renewable sources.

Are the authorities promoting this technology?

In our experience, it is the regional authorities that have worked the most to promote this technology in their localities. The work of our center in the Region of Aysén and the subsequent contacts and projects that have resulted from it show the interest that regional governments have in using geothermal energy to improve the quality of life of its inhabitants. The successful experience in Aysén is now being replicated in Los Ríos and the regions of Magallanes, Araucanía, Los Lagos and, in the central zone, O’Higgins, have shown great interest in raising funds to develop pilot projects. All the projects that we are developing are being carried out through the contest modality,

And the national authorities?

At the level of national authorities, we have seen little, and when in the media we have heard them talk about energy, it seems that they forget that geothermal exists, it does not seem to be a very latent energy for them. Perhaps the only exception has been the project that the Ministry of Energy is not financing to heat a school with heat pumps in La Araucanía. This will be a two-year project, with funds allocated directly from the Ministry to CEGA and we hope to complete this project during this year.

However, we do not see a firm commitment at the national level for the development in research and development of electricity generation projects with geothermal energy. This aspect remains almost restricted to private developers, which are obviously governed by market conditions.

What is the projection of geothermal energy? 

In Chile, so little has been developed and the potential is so high that under these circumstances the level of projection is very high. However, if public policies that encourage the local development of geothermal energy are not developed, we will continue to wait for another 100 years, which was the time it took to complete a first power plant based on geothermal energy in Chile. Worldwide, geothermal finds more and more applications and begins to be a fundamental actor for the development and sustainable growth of cities, as well as a key actress to combat climate change. Worldwide projections are increasing, since it has been demonstrated that the district heating system in cities using geothermal energy is the most efficient way to generate an environment of residential comfort with minimum environmental impact. More and more countries are developing projects for the direct use of geothermal energy and growth projections for the generation of electricity worldwide are also increasing.

And particularly in Chile?

In Chile, if there is no clear interest in making geothermal a state issue, it is complicated that we can get to have those longed 1200-1300 MWe in 2050. At the moment we have 48 MWe in Cerro Pabellón, plant that goes to expand another 33 MWe more for possibly the end of 2020. In other words, we may be talking about 81 MWe at the end of 2020, but the outlook for the second geothermal field to be developed in Chile is not very clear. Perhaps Peumayén (formerly Tolhuaca) can begin the exploitation phase as of next year, but for this, market price conditions must be given that favor the project. But, in any case, we will end 2020 without even reaching 100 MWe. Undoubtedly, an important step but maybe small if we aspire,

What is your opinion on the bill that seeks to promote the shallow utilization of geothermal energy?

Months before the presentation of this bill, the CEGA made its own legislative analysis of the Geothermal Law, comparing our regulations with those of several countries in the world, and based on that we suggest modifications, and many of the ideas we proposed are also present in the bill. It has many positive developments, such as streamlining administrative procedures, the establishment of a special regime for the direct use of geothermal energy, the technical criteria for defining low enthalpy geothermal are also appropriate – following the example of Italy. Even if there are still things to be resolved, it is not clear in the project who can register the shallow use of geothermal energy, that is, who is the owner of that right. Can he be the owner of the surface land? Can it be a third party in your name? What happens if a company or a community wants to exploit the resource for a low enthalpy project? Do you need the authorization of the owner of the surface land? These doubts should be cleared in the future regulation.
Despite these doubts, it seems an excellent step to promote the direct use of geothermal energy. Before this new law, the direct use of geothermal energy should be governed by the geothermal law and follow all the administrative obstacles that it implies. Clearly, it was not at all attractive to do a project of direct use under the protection of that geothermal law. However, this new law of direct use will allow a regulatory framework that will speed up, without doubt, the entry of geothermal heat pumps and the efficient use of the geothermal resource of the shallow subsoil.

What research work is CEGA doing?

We are developing research in high and medium enthalpy geothermal systems (those that would allow the generation of electricity) and in low enthalpy systems, designed for direct use.

We are developing research in collaboration with the two companies that are currently developing geothermal projects in Chile (Geotérmica del Norte and Transmark) in order to better understand the Andean geothermal systems. We are also beginning to generate collaboration agreements to investigate high-enthalpy geothermal systems in Argentina, Costa Rica and Ecuador.

Regarding direct use research, we are developing direct use favorability maps and implementing pilot demonstration projects, with a strong social component, applying geothermal heat pumps. We are convinced that the best way to make visible the benefits of geothermal energy is through direct use. And in this sense we are developing several projects in different regions of the country and we will also begin to collaborate with foreign institutions to work in Ecuador and Argentina.

What uses and benefits does geothermal energy have for communities?

Undoubtedly, the greatest benefit is in direct use. Although there are very successful experiences in New Zealand where Maori communities are managing a geothermal plant, I think that as a country we are still very far from being able to imagine a similar situation in Chile. However, if I see a feasible positive alliance between communities and geothermal developers to take advantage of what is known as the “waterfall effect” of geothermal energy and be able to use the remaining heat from geothermal plants for community benefits. Or, if we focus on direct use, we are precisely developing pilot projects with a strong social component and direct benefit to the communities. We are talking about greenhouses, wood drying, drying food, heating public spaces, etc.

Source: Energía Estratégica Latam