Colombia releases draft legal framework for geothermal power generation
Colombia's Ministry of Mines and Energy has released a draft regulation that is to help attract investment into geothermal development in the country.
As reported by BN America, the Ministry of Mines and Energy in Colombia has released a draft resolution with the purpose “to adopt the guidelines and requirements to promote exploration and investigation of the subsoil and exploitation of the Geothermal Resource for the generation of electrical energy.”
On seven pages, the document proposes a framework and guidance on technical and environmental requirements, as well as providing recommendations for contractual terms.
In the document, the Ministry divides the geothermal development activities into general activities on exploration and exploitation, while providing in further detail specific conditions for exploration and exploitation of geothermal resources.
The Ministry of Mines and Energy will issue a regulation of technical conditions in which the requirements and obligations of the Developers to carry out activities during the Stages of Exploration and Exploitation Stage for Electric Power Generation, such as, for example, the requirements for starting and ending operations, drilling, abandonment and plugging of wells and the requirements for the preservation of the resource. Likewise, the Ministry of Mines and Energy will determine the way in which it will monitor, monitor and control the compliance with these technical obligations.
The regulation of technical conditions may include the measures necessary to guarantee the use of best practices for the development of activities, environmental protection, safety of operations and development sustainable.
In accordance with the powers granted by Law 99 of 1993 and what is stated in article 21 of Law 1715 of 2014 or the regulations that modify them or repeal, the Developer must comply with the environmental requirements that must be fulfill the exploration and exploitation projects of the Geothermal Resource for the generation of electrical energy issued by the Ministry of the Environment and Sustainable Development.
Also, the Developer must carry out all the activities necessary to mitigate the impacts environmental conditions that may arise in the development of the activity.
The Developer who has advanced the Exploration Registry or the Exploitation Registry for generation, will carry out all activities at your own risk, and will not act in any case on behalf of the State for which all necessary steps will be your sole responsibility, including, but not limited to limited to property management and obtaining environmental permits. The inscription carried to carried out in the Geothermal Registry will not grant in any case the right to use and exploitation of the Geothermal Resource for other activities, in accordance with the provisions applicable environmental conditions.
The Ministry of Mines and Energy, or the entity that it delegate, will manage the Geothermal Registry. This will be updated periodically, so that areas subject to registration can be viewed in relation to others, including, but not limited to, be limited to those where other electric power generation projects are developed, exploration and production of hydrocarbons, mining activities and areas of the National System of Protected Areas, as soon as said information is available. Likewise, the Ministry of Mines and Energy may establish an economic consideration and may require the constitution of
guarantees for the registration of projects in the Geothermal Registry, in order to guarantee the fulfillment of the obligations derived from it.
The Colombian Geological Survey will determine the shape and type of information that Developers have to provide in the Exploration Stage and in
the Exploitation Stage for the Generation of Electric Power. In any case, the Ministry of Mines and Energy will establish the obligations that will have to exist in relation to the delivery of information to maintain the Exploration and Exploitation Registry for generation.
Specifics on Exploration Activities
The exploration phase of geothermal development is defined in the regulation as the activities by the developer confirming the existence of the Geothermal Resource for the generation of energy and Identify its type, size, and other characteristics and attributes.
The Developer interested in advancing to the Exploration Stage of a Geothermal Resource for the generation of electricity, must request the Ministry of Mines and Energy for the Exploration Registry. For this purpose, the Developer must deliver the documentation under the conditions determined by the Ministry of Mines and Energy, which will include, as a minimum:
- Registration of the electric power generation project in Phase 1, issued by the Unit of Mining and Energy Planning – UPME, together with all the information that was sent to said entity to advance that record.
- Analysis of the area that the Developer intends to be delimited as an Area of Exploration in the tool that is determined for this purpose.
- Detailed report on the exploratory activities to be developed in the Area of Exploration and in accordance with the provisions of the Regulation of technical conditions.
The Ministry of Mines and Energy, or the entity delegated by it, will review the application of the Exploration Registry for which will review the documents provided, verify that the information provided by the Developer is complete and will confirm whether or not the project to be registered overlaps with another project of the same nature; and will analyze it according to the Regulation of technical conditions.
During the review of the application of the Registry of Exploration, the Ministry of Mines and Energy, or the entity that it delegates, will verify, if there is
overlap of the requested area with another project of the same nature or with another that involves the use of the subsoil.
- Overlap between requests. In case there is an overlap of Areas of Exploration between two or more registration requests that are in the process of requesting registration, the one that has been filed first will prevail. If the overlap is partial, the request of the second Developer, will proceed with respect to the Exploration Area that is covered in the application of the first Developer.
- Overlap between a request and an Exploration Record. In case the project to be registered overlaps with an Exploration Area that has already been
granted to another project, the Ministry of Mines and Energy, or the entity that it delegates, will inform the Developer of the new request, to modify the project presented. In the event that such modification is not possible, the application for registration of the
project will be rejected.
Once the Ministry of Mines and Energy or the entity that it delegates has advanced the review of the application for Registration of Exploration, you can either grant it or decline it. The exploration record will be rejected by the following reasons and for the others determined by the Ministry of Mines and Energy:
- The exploration registration application has been submitted incompletely, the information provided is not clear or it is not possible to determine that it complies with the requirements indicated in the Technical Regulations;
- There is overlap with another project, under the conditions provided in the previous article;
- It is determined that the project presented does not comply with the parameters, standards and requirements indicated in the Regulation of technical conditions.
The duration of the registration term exploration will be determined by the Ministry of Mines and Energy.
The Developer who has obtained the Exploration Log from a certain area will have exclusivity while it is in force, to request the Exploitation Registry for Generation on the Exploration Area. This as long as comply with the requirements established in the Technical Regulations and in the parameters
The Developer may assign the Exploration Registry to other people legal entities with prior authorization from the Ministry of Mines and Energy.
Loss of the exploration registry: The Ministry of Mines and Energy determine the cases in which, in order to guarantee compliance with the conditions of development of the project, the obligations of the Developer and those of information, cancel the scan registration granted. Likewise, the Registration of exploration due to the expiration of the term indicated by the Ministry of Mines and Energy under of article 14 and for the revocation of the environmental license.
Specifics on the Exploitation Stage
The exploitation phase is defines as the stage where the developer exploits the Geothermal Resource of the Exploitation Area in order to to generate electrical energy. This stage will include the works and activities necessary for the extraction and transformation of the geothermal resource for the generation of electrical energy.
In any case, the use of the resource must be carried out in a responsible and sustainable, avoiding to the maximum its waste and / or exhaustion due to bad practices and taking care its renewable nature, in compliance with the regulations established for it, especially established in the respective environmental license.
The Developer interested in advancing the Exploitation Stage for Power Generation Electric, you must request the respective registration. For this purpose, the Developer must deliver the documentation determined by the Ministry of Mines and Energy, which will include at least:
- Registration of the project in Phase 2 of the Mining and Energy Planning Unit – UPME, in together with the information that was sent to said entity to advance that record;
- Analysis of the area delivered by the Developer to delimit in the tool to be determined for this end;
- Detailed report on the exploitation activities for the generation to be developed in accordance with the provisions of the Regulation of technical conditions.
The application for the exploitation registry for the generation that the Developer to the Ministry of Mines and Energy, or the entity that it delegates, may only used to generate electrical energy from the Geothermal Resource.
To request the Operating Registry for power generation electricity, the Developer must verify the existence of the Geothermal Resource and have
the registration of the Exploration Registry in the Geothermal Registry. This according to the chapter above of this decree and the provisions of the Regulation of technical conditions.
The area for Generation that is the object of the application for the Operation Register for the generation of electrical energy it must be located within the Exploration Area, according to the previous chapter of this decree.
The duration of the term of the exploitation registry will be determined by the Ministry of Mines and Energy.
The Developer may transfer the Operation Record to other people legal entities with prior authorization from the Ministry of Mines and Energy.
The Ministry of Mines and Energy determine the cases in which, in order to guarantee compliance with the conditions of development of the project, the obligations of the Developer and those of information; it may cancel the exploitation registry granted. Likewise, the Registration of exploitation due to the expiration of the term indicated by the Ministry of Mines and Energy in the Article 20 and for the revocation of the environmental license.
Conditions for existing projects
The Ministry of Mines and Energy will establish a transitory scheme for those Developers who, prior to the issuance of the this decree, they have already carried out exploratory activities of Geothermal Resources in order to generate energy.
According to BN Americas, the efforts made with this piece of regulation are to attract investment into geothermal electricity generation in Columbia and “coincide with plans to reduce Colombia’s reliance on hydropower and fossil fuels.”
The government wants to raise the share of non-conventional renewable energy and distributors are obliged to source at least 8% of their electricity from long-term (non conventional) renewable energy contracts.
The draft resolution has entered a public consultation period that runs until December 16, 2020. The document can be accessed here (in Spanish):
Source: Ministry of Mines and Energy and BN Americas