Geothermal energy is an abundant resource in the Andean region that has enormous potential to provide low-cost clean energy, though it remains largely untapped. The total geothermal resource capacity of the region is approximately 12 gigawatts, which equals the total installed global geothermal capacity in 2014. Despite such considerable and unique geothermal energy potential, no geothermal power plants are operating to date as Andean countries still face challenges. In this context, IRENA, together with the government of Colombia, recently co-organised a two-day workshop to address this issue. The event focused on: identifying the main barriers that Andean countries face in financing geothermal projects; and disseminating best practices.
The main obstacle for geothermal power investment and development is the high upfront costs of surface geophysical studies and drilling to explore for geothermal resources. But once a geothermal project is in operation, it can generate electricity at a low cost. With a combination of renewable technologies in place, a country could reap many rewards. Take for example, the workshop’s host country, Colombia, which stands to earn USD 775 million, or USD 221 million net, from implementing renewable energy incentives in the next 15 years. The measures, defined by the renewable energy law from 2014, will support, among other renewable energy technologies, geothermal power.
The workshop is part of IRENA’s Geothermal Initiative in the Andes, which was launched in cooperation with the Latin America Energy Organisation (OLADE) and the International Geothermal Association (IGA) to support the geothermal development of the Andean countries. The initiative includes the support from countries with substantial geothermal experience including Iceland, New Zealand, France and Mexico.
The Initiative seeks to: address policy uncertainty, a shortage of skilled professionals and perceived environmental issues and licensing that prevent a wider adoption of geothermal energy; present risk mitigation instruments and regional risk mitigation facilities to mitigate resource risk and identify conditions for governments to create the right investment environment for geothermal projects.
As a result of an initial workshop in Iceland in 2013, three key areas of support for the Initiative were identified:
- Legal frameworks to complement the existing regulatory geothermal norms to further develop enabling conditions for investments;
- Capacity building, and;
- Access to finance and dissemination of innovative models to finance operations, including geothermal reinsurance and risk mitigation funds.
The Initiative is helping energy experts in Colombia and other countries in the region develop plans in reaching renewable goals.
“As a Government, we are committed to promoting non-conventional renewable energy sources, not only to contribute to achieving the commitments to reduce emissions of greenhouse gases by 20 per cent by 2030 , but also to harness the potential of available renewable resources in the country, and to diversify the generation mix and ensure sustainable development of the sector” – Jorge Valencia, Director of the Mining and Energy Planning Unit, UPME of Colombia
“The energy policy of the Government of Colombia includes the diversification of energy sources and finding innovative solutions that takes into account the current environmental needs of the planet. It is from this that we derive these geothermal projects, to which we ascribe all the importance of this moment, in this country, to achieve all of our desired goals.” – Maria Victoria Reyes Mesa, Head of Environmental and Social issues, Ministry of Mines and Energy, Colombia
Read about Past Events of the Geothermal Initiative of the Andes:
Workshop in Peru on legal and regulatory frameworks
Technical training workshop in Santiago, Chile to provide a general introduction to geothermal science, engineering, project cycles, investment, and regulation.
IRENA Tool on Global Geothermal Potentials