Energia Andina GM interview on industry status in Chile

Francisco Rojas 5 Sep 2013

Projects advance slowly but surely in Chile. Energia Andina is not currently looking for partners but this can rapidly change as current projects advance to further stages.

In an interview for the specialised news website “Que Pasa Mineria”, Jose Manuel Soffia, general manger of Energia Andina (ownership of Energía Andina: Antofagasta Minerals (60%) from Chile and the Australian Origin (40%)), here are the highlights of the event.

The initial contact of Mr. Soffia with the geothermal industry was with ENAP, when Daniel Fernández, (now in HidroAysén), started the promotion of the governmental company in the aforementioned sector.

According to Mr. Soffia, time seems to be one of the main concerns in this sector, mentioning that doing viability studies for other renewable energy sources such as solar or wind power usually takes around one year, in the case of geothermal energy, this can be extended to five or more years, without even generating any conclusive evidence. This is the reason behind the lack of any active projects at the moment in Chile. Other concerns are regarding the slow process of giving out concessions and risk management, which aggravate this situation even further.

One interesting point is that, due to the high-risk profile of most of the initial projects, when one is actually put into practice, it is very likely that it will continue unhindered. The main issue falls again into the fact that getting into this stage is the difficult part. Size also plays a crucial role, since most of the financing comes from private hands, only big and highly lucrative projects are considered, leaving smaller ones outside of the picture.

Mr. Soffia also points out that the slower development of geothermal electricity generation can be attributed to the lower risk and the easier access to hydroelectric power that Chile has.

Bearing this in mind, it is very possitive to announce that all of the projects that Energía Andina is currently undertaking have pased the initial stages; and that the Tinguiririca power plant, the most advanced project of the firm, will be known if it is economically feasible by 2014 and that by 2019 they should be able to produce at least 80 MW considering all current projects.

One important aspect is the impact that these projects have on local communities, being these at the forefront in importance for Energía Andina, according to Mr. Soffia. In the case of Tinguiririca, there are no relevant issues with communities, yet on the other 12 projects, their concerns are treated with utmost importance. The transparency of their operations has helped them go through their operations with greater ease.

Finally, Mr. Soffia mentions that they are not contemplating looking for partners in current projects, yet when the construction phase of the projects draws near, this could be a very interesting possibility to consider, since further financing stages for viable projects are always challenging.

Source: Piensa en Geotermia Website