Promotion of geothermal energy in Central America
Title: Promotion of geothermal development in Central America
Commissioned by: German Federal Ministry of Economic Cooperation and Development (BMZ)
Countries: Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama
Lead executing agency: Central American integration system (Sistema de la Integración Centroamericana, SICA)
Overall term: 2016 to 2020
As part of the Pacific Ring of Fire, a region characterised by a large number of both active and inactive volcanoes, Central America has significant geothermal potential. It is currently estimated at over 6,000 megawatts. Unlike other renewable energy sources such as wind, hydro and solar, geothermal energy can be used at any time and in any weather. Geothermal plants are also based on a climate-resilient infrastructure - they survive storms, sea-level rises, global warming and droughts. Geothermal energy can thus contribute significantly to a stable and secure primary energy supply in the region.
The national governments of Central America have recognised this opportunity and want to further expand the current eight percent installed capacity in the region. However, geothermal energy is still limited in practice, as the current investment climate for the implementation of geothermal projects in the region is unfavorable. The economic use of geothermal energy is constrained by problematic legal framework conditions. The site search and required drilling require high investment and lack specific expertise.
There is increased demand in Central America for geothermal energy, and the climate for investment in promoting geothermal projects is improving steadily.
The regional project is part of the Promotion of Geothermal Energy in Central America programme and is being implemented as part of the German Climate Technology Initiative (DKTI).
The project cooperates closely with two other projects from the programme: the Geothermal Development Facility (GDF), implemented by Kreditanstalt für Wiederaufbau (KfW Development Bank); and Identification of Geothermal Resources in Central America, implemented by the German Federal Institute for Geosciences and Natural Resources (BGR).
The regional project works in five fields of activity.
- The project supports decision-makers’ efforts to improve the political and statutory framework.
- It demonstrates the technical and economic feasibility of using geothermal energy to investors and decision-makers. It promotes implementation of pilot measures and supports investors, project developers and companies with planning and implementing projects.
- The project strengthens technical expertise and helps to mainstream the training on offer in the region’s institutions.
- Regional dialogue is also planned as part of the project to allow the initiation of processes in the various countries that will result in further expansion of geothermal energy in the region.
- Finally, the project aims to set up a specialist network for geothermal energy through information, advice and advertising. This network provides information and advisory services.
During implementation, the project incorporates Germany’s existing expertise in the geothermal energy sector and contributes to technology transfer.
- The perception of geothermal energy as a stable and climate-resilient energy source and thus as a vital resource in the region has improved.
- Foundations for the regulatory framework are being laid, both in individual Central American countries and at regional level. Geothermal energy plays a more important role in the updated Central American Renewable Energy Strategy 2030.
- The project supports project developers with the implementation of pilot projects focusing on direct use of geothermal energy. For example, Salvadorian company LaGeo and the Costa Rican energy supplier ICE are receiving support with making greater use of cascading in existing geothermal power plants. This involves using the residual heat in the steam turbine after power generation. In El Salvador, this heat is used for roasting coffee beans and pasteurising milk, while in Costa Rica, it is used for drying grain. The project is now working with the Ministry of Energy, Natural Resources, Environment and Mines in Honduras to develop a project for direct use of geothermal energy in cheese production. This approach creates green workplaces in the area around the power plants and integrates population groups with lower levels of education.
- In 2016, the Regional Committee of Central America and the Caribbean of the Regional Energy Integration Commission (CECACIER) took over the role of regional information platform on the use of geothermal energy. The network is identifying knowledge gaps, and these areas are then addressed in face-to-face events, online seminars and publications.
- Advanced technical courses are offered for in-service and continuing training in geothermal energy in Central America; demand for this is continuously increasing, and more than 200 experts have received training so far (as of July 2019).