With the acceleration of the decarbonization of the energy system in Latin American countries, low-carbon and stable geothermal energy has attracted a lot of attention, and has become the latest "hot spot" for the development of clean energy in the region.
Recently, the Colombian government announced that it will open the first round of bidding for geothermal energy projects in the second half of this year to further explore the potential of geothermal resources in the country. Coincidentally, El Salvador has recently announced that it will increase the development of geothermal resources and promote the application of local thermal energy. With the acceleration of the decarbonization of the energy system in Latin American countries, low-carbon and stable geothermal energy has attracted a lot of attention, and has become the latest "hot spot" for the development of clean energy in the region.
Geothermal development has been launched in many countries
In January, the Colombian government granted oil producer Parex Resources a permit for the country's first geothermal power project, which will increase its capacity to 120 kilowatts from a previously projected 15-60 kilowatts. In the months that followed, the Colombian government repeatedly stated that it would increase the development and utilization of geothermal resources. According to data released by the Colombian Geological Service SGC, the geothermal resource potential in Colombia can reach 1,170 megawatts.
In order to expand the application of geothermal energy, Colombia's National Hydrocarbon Chemicals Management Agency ANH recently said that Colombia will consider developing geothermal resources in the country's volcanic areas, and will promote the development of commercial projects after confirming that there is sufficient resource potential.
As a low-carbon renewable energy source, geothermal energy has great prospects for utilization in power generation, heat supply and other fields, and has received continuous attention in recent years. Not only Colombia, but also Mexico, El Salvador, Costa Rica and other countries are also growing in the scale of geothermal energy projects.
In January, El Salvador also announced that it would expand the development of geothermal energy projects. According to El Salvador's water department, the country is currently planning to start construction projects in two geothermal resource-rich areas, and will explore more resource space. As of April this year, the total installed capacity of geothermal development in Mexico reached 964 megawatts, and the largest geothermal energy project reached 720 megawatts, according to BNAmericas.
According to the statistics of the market research institute WiseConsult Energy, at present, the total proven geothermal resources in Latin America can reach 33 gigawatts, of which Mexico, Costa Rica and El Salvador account for 75% of the total resources, however, the developed project capacity of each country is only 2 gigawatts, and the development ratio is less than 10%.
Abundant resources to support production capacity growth
A number of energy research institutions pointed out that with the acceleration of the energy transition process in various countries, the scale of geothermal projects in Latin American countries is expected to rise rapidly.
According to WiseAdvisor Energy, investment in the Latin American geothermal sector will soar from the current US$570 million to US$1.3 billion by 2027, an increase of more than 100%. With the investment, the installed capacity of geothermal power generation in the region is expected to grow rapidly to more than 1.4 GW.
The International Energy Agency (IEA) also pointed out in the Latin America Energy Outlook report that Latin America has huge renewable energy development opportunities, not only rich wind and solar resources, but also huge geothermal energy development potential in the Andes. For Latin American countries, the development of geothermal and hydroelectric resources and their integration into the energy system will significantly reduce their dependence on imported fossil fuels, increase their energy independence, and reduce their greenhouse gas emissions.
It is worth noting that, from the perspective of the current geothermal energy development model in Latin American countries, geothermal energy projects can not only provide thermal energy, but also integrate and develop with other industries to maximize the output value of the project. In El Salvador, for example, the country's energy companies Volcano Energy and Luxor Technology announced late last year that they would collect geothermal energy resources near lava and provide energy for Bitcoin "mining" projects.
In addition, the synergistic development of geothermal energy and lithium resources has also attracted attention. Consulting Energy noted that the recent technological breakthrough in the development of lithium in geothermal resource areas also means that regions with geothermal resources will be able to manage this rich natural resource in a more efficient way. Lithium mining at the same time as the development of geothermal resources will also be a double benefit for Latin American countries.
We call for multi-party coordination to increase investment
Although there is great potential for the development of geothermal energy resources, Consulting Energy also pointed out that in order to fully unleash the potential of geothermal resources, countries need not only technological progress, but also relevant regulatory frameworks and market support, and the high cost of upfront energy has become a major challenge for the development of geothermal energy projects.
The industry believes that in the long run, most of the areas where geothermal resources are located are inconvenient and it is relatively difficult to connect to the grid infrastructure, and the investment will be huge. Shruti Raghuram, Senior Analyst at Restec Energy, points out that geothermal development in Latin America is facing a dual challenge: on the one hand, geothermal projects are facing competition from existing low-cost renewable energy sources such as wind and solar, and on the other hand, they need to address the challenges of large initial investments in upfront exploration and infrastructure development.
According to the BNAmericas website, Mexico, as a "pioneer" in geothermal development in Latin America, has repeatedly discussed public funding for geothermal development in order to obtain more funding. Mexico's geothermal association has also repeatedly proposed that part of the country's oil revenues be used to subsidize geothermal exploration and development. Herb Diz León, president of the Mexican Geothermal Association, said that geothermal needs financial incentives to promote exploration and development, which can come from the oil industry and state revenues, and that Petroleos Mexicanos and the oil industry can provide decarbonization funds in principle to encourage geothermal exploration.
According to the International Energy Agency, Latin America is rich in fossil fuels, and for fossil fuel producers, it is important to diversify the development of offshore wind, carbon capture technologies and geothermal energy, or to reduce carbon emissions. The agency also recommends broader action to ensure that resource extraction actions bring tangible benefits to local communities, with lithium production from wastewater from geothermal power plants being an example of synergy and increased production value.
Original title: The development of geothermal energy in Latin America is ready to go
Text丨Reporter Li Limin
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Editor-in-charge丨Li Huiying