Low power prices holding back geothermal development in South America

Pampa Lirima project site, Chile (Source: Energia Andina)
Alexander Richter 25 Apr 2012

South American countries see different levels of development and investor interest based on different electricity pricing and availability of funds, with Chile seeing high electricity prices resulting in strong investor interests in development of geothermal resources.

Low power prices are holding back geothermal development in Latin America, says Bart van Campen of the Geothermal Institute of the University of Auckland in New Zealand in a recent interview with BN Americas.

In Peru geothermal development is less attractive, as the country  has the luxury of abundant gas and hydro power resources. In Argentina on the otherhand the lack of accessible investment sources are the main barrier to development.

Chile though sees high prices and an ever increasing demand in the north of the country and therefore is leading with regards to development and a push for geothermal. The high electricity prices in Chile are the main driver of investor interest and have put Chile on the international map. The recent tender in Chile for 20 exploration concessions has seen a great interest with 70 offers in the tender.

The tender for these 20 concessions includes an investment commitment of around $250 million. Firms that have submitted bids in the tender include, Enel, Origin Energy (each with 10 bids), as well as Colbún, GeoGlobal Chile, Magma Energy (Alterra Power) and Ormat Andina (Ormat Technologies).

Source: BN Americas