Geothermal Power in Latin America

Latin America has an area of approximately 21,069,501 km² (7,880,000 sq mi), almost 3.9% of the Earth’s surface or 14.1% of its land surface area. As of 2009, its population was estimated at more than 568 million and its combined GDP at 4.26 trillion United States dollars (5.99 trillion at PPP). Latin American expected economic growth rate for 2010 is at about 4%.

Power generation currently occurs at three other geothermal fields in Mexico: Los Azufres (188 MW), Los Humeros (40 MW), and Las Tres Virgenes (10 MW). Geothermal plant operators and developers intend to expand the production capacity of Mexico’s geothermal resources and companies are engaged on a number of projects.

Geothermal Development Highlights

▪Recently, the Mexican state power company CFE awarded a drilling tender to Industrial Perforadora De Campeche (IPC) to drill 30 wells at Cerro Prieto to provide steam for a new 100-MW geothermal power plant.
Plans for the expansion of the Los Humeros geothermal resource will bring an additional 50 MW on line there. French firm Alstom received a US$ 61 million contract to design and construct one of the geothermal power plants at Los Humeros.
▪The Cerritos Colorados geothermal plant is reportedly under development.
National Policies
The Mexican government has provided policy incentives to drive the development of its renewable energy sources including geothermal energy. In 2005 the Accelerated Depreciation for Environmental Investment law was enacted making it possible for investors in renewable energy projects to deduct up to 100% of their first year investment.

As a region, South American energy consumption and demand is projected to grow by 60% through 2030.248 In order to address growing energy demand, as well as issues related to energy security and climate change, South American countries are seeking to develop their renewable resources. For countries along the Andean Mountain Range, and especially in the Southern Cone, geothermal resources represent an opportunity to meet energy needs with a clean, baseload, sustainable form of energy.

While no geothermal power plants are currently producing geothermal energy on the continent, certain South American countries, namely Chile and Argentina, are working to encourage geothermal development within their own borders through the implementation of policy measures incentivizing the development of renewable energy resources, geothermal included.

Both local and foreign companies have taken an interest in the development of South America’s geothermal resources. This is especially true in Chile, where local and international mining companies are looking to develop geothermal resources to help meet the electricity needs of their operations. Additionally, shortages of natural gas imports currently undermine Chile’s energy security. The Chilean government has sold a number of geothermal exploration and development concessions to local and foreign geothermal developers in order to address issues stemming from increased energy consumption and demand.

While Chile stands out as the foremost among South American countries which are actively harboring the development of geothermal energy within its borders, the mining industry and local developers in Argentina are also working to develop geothermal resources there.


Argentina’s geothermal resources are primarily located in the country’s western regions along the Andes mountain range. Geologic and geophysical studies of certain geothermal resources occurred in Argentina as early as the 1970’s and a 700 kW pilot plant was even operated at the Copahue field from 1988 to 1995. Recent interest in developing Argentina’s renewable energy resources has led to a number of companies seeking to develop the country’s reserves.


Energy demand in Bolivia increased at a rate of 3.1% annually from 1980 to 2002.255 While no geothermal installed capacity exists Bolivia’s government is beginning to move to develop its geothermal resources to help meet increasing demand.
Geothermal Development Highlights
▪The Bolivian state power company, ENDE, has taken initial steps to develop the Laguna Colorada geothermal resource near the border with Chile in Sud Lipez, Potosi. Exploration work done in the early 1990’s by the Italian company Enel has been updated in preparation for renewed geothermal exploration and production. The Andean Development Corporation, the Japan External Trade Organization, and the Japan Bank for International Cooperation are providing financial support to the project, which is expected to generate 100 MW when completed.
National Policies
The Bolivian government enacted a rural electrification program in 2000 which promotes the development of renewable energy, including geothermal, in rural areas.
Additionally, regulation was passed in 1999 that provides grant incentives to rural electrification projects.


In order to meet rising domestic energy demand, diversify its energy production portfolio, and to guard itself from fluctuating levels of imported Argentine natural gas, Chile is seeking to develop its geothermal resources. Estimates of the country’s domestic geothermal resources by the Chilean Ministry of Mines indicate substantial potential of up to 16,000 MW. Chile has already attracted a number of foreign companies who are eager to develop the countries abundant geothermal resources.
Geothermal Development Highlights
▪GeoGlobal Energy, LLC. (GGE), with its New Zealand partner Mighty River Power, has obtained a permit to drill a second exploration well at the Tolhuaca geothermal resource site and expect results providing more information on the extent of the resource in the near future. GGE has already obtained a commercial extraction permit for the field which is estimated to be able to produce up to 75 MW. GGE also expects to being exploration drilling at the Puchuldiza project in late 2010.
▪Magma Energy, Corp. was recently given an exploitation permit at the Maule geothermal resource by the Chilean government, enabling it to directly proceed with the construction of a geothermal power plant once initial exploration drilling has been completed. Magma has recently been drilling a series of slimhole wells into the geothermal reservoir at the Maule resource.

National Policies
In December of 2009 and January 2010 geothermal concessions were recently awarded to the following companies:
Energy Andina (5 concessions)
Geothermal Empressa Nacional (3 concessions)
Colbun (2 concessions)
Hotrock Chile (2 concessions)
Serviland Minergy (2 concessions)
Polaris Geothermal (2 concessions)
Ormat Andina (1 concession)


The majority of Peru’s electricity generation comes from hydropower (65%) and natural gas (24%). While, no geothermal resources have been developed for electricity production in Peru certain estimates indicate that the country has approximately 3000 MW of geothermal potential, most of which is located on the western slopes of the Andes Mountains and in the countries volcanic southern regions.266 The development of Peru’s geothermal resources would augment its energy production portfolio and help guard it against drought induced outages of its large hydropower sector. The Peruvian government has made recent efforts to promote the development of its geothermal resources.
Geothermal Development Highlights
▪Australian company Hot Rock Limited recently formed its Peruvian subsidiary Hot Rock Peru S.A. which has logged four geothermal exploration applications in southern Peru.
▪Canada based Magma Energy Corporation also has exploration properties in Peru.
National Policies
Currently the country’s Law on Geothermal Resources is being re-drafted to provide improved standards and regulations for the utilization of Peruvian geothermal resources. Additionally, Peru is planning to launch a tender for a planned 500 MW renewable energy generation projects, of which geothermal is included, via its mining investment regulator Osinergmin.

As is the case in South America, energy demand and consumption is expected to increase throughout Central America and the Caribbean. However, while hydropower provides much of South America’s energy, carbon intensive fossil fuels provide the bulk of electricity in Central America and especially the Caribbean. Indeed, between 1990 and 1999 emissions from energy production in the Central American and Caribbean regions increased 50%.

While many Central American countries produce a significant portion of their electricity from fossil fuels, geothermal energy has played an important role in the energy mix of some of the regions countries. Costa Rica, El Salvador, Guatemala, and Nicaragua all harbor operational geothermal power plants. In Costa Rica and El Salvador geothermal energy comprises, respectively, 13% and 26% of national electricity generation.

An abundant resource base combined with the desire to increase energy security and address climate change throughout the region have led to the continued development of Central America’s geothermal resources. Costa Rica, El Salvador, Guatemala, and Nicaragua all have geothermal projects in development.

The island nations of the Caribbean Sea are almost entirely net energy importers. As these nations are dependent upon oil imports to generate electricity they are sensitive to fluctuations in the prices of fossil fuels. In an attempt to move away from dependence upon fossil fuels, a small number of Caribbean island nations are exploring and developing their geothermal resources with a project currently under development on the island of Nevis.

Costa Rica

Costa Rica has been producing geothermal electricity from units located in the foothills of the Miravalles volcano since 1994. Currently, there are five geothermal units producing 165.5 MW of electricity at the Miravalles geothermal resource, which comprises approximately 13% of Costa Rica’s total installed electricity capacity. Geothermal resources in Costa Rica are continuing to be developed in order to bring more clean, baseload electricity to the country’s electricity grid.
Geothermal Development Highlights
▪The 35-MW Las Pailas geothermal project, located at the Rincón De La Vieja Volcano, is in its latter stages of development.71 Recently, Ormat Technologies, Inc. signed a US$ 65 million contract with the Banco CentoAmericano de Integración Económica (BCIE) for the construction of the planned 35 MW Las Pailas geothermal power plant.
▪In addition to developments at Las Pailas, geothermal exploration and a plant feasibility study have been initiated at the Borinquen geothermal resource in the north of the country.
National Policies
The Costa Rican government has made efforts to expedite the development of geothermal resources there. Recently the Costa Rican Congress introduced a bill that would allow for the development of some geothermal resources located within the country’s national parks.

El Salvador

The Ahuachapán (95 MW) and Berlin (109.4 MW) geothermal power plants supply approximately 26% of El Salvador’s electricity. The majority state-owned company, LaGeo, operates the two plants which have a cumulative installed capacity of ~204 MW, making El Salvador the largest producer of geothermal energy in Central America. El Salvador has encouraged the development of its geothermal resources as a response to the reliance upon oil imports and the corresponding sensitivity to high oil prices.
Geothermal Development Highlights
▪The Central American geothermal developer LaGeo has engaged in early exploration activities at the Chinameca geothermal resource located in San Miguel. Initial exploration results have been positive and could pave the way for the country’s third geothermal power plant.


Studies of Guatemala’s geothermal resource indicate that the country has up to 4000 MW of geothermal potential, of which a small portion has already been developed for electricity production. 80 Two geothermal power plants currently operate in Guatemala. The Zunil I (28 MW) and the Amatitlan (24 MW) binary geothermal power plants provide a combined 52 MW of geothermal energy to Guatemala’s electricity grid. 81 Interest in developing Guatemala’s geothermal resources continues to grow and the government of Guatemala is eager to encourage the development of geothermal and other forms of renewable energy within its borders.
Geothermal Development Highlights
▪A recent announcement by US-based geothermal developer US Geothermal, Inc. indicates that the company intends to develop known geothermal steam fields southwest of Guatemala City. US Geothermal will build upon previous resource development conducted at the El Ceibillo steam field in order to quantify a MW value for the geothermal resource and complete the eventual construction of a geothermal power plant there.


Honduras is a net importer of energy with the majority of its energy consumption needs being met by heavy fuel oil and hydropower.85 While the country currently produces no electricity from geothermal energy, it does harbor lower temperature geothermal resources which provide some opportunity for exploration and possibly development.
Geothermal Development Highlights
▪Geothermal exploration company EGS, Inc. is currently devising a development strategy and performing data analysis in preparation for the possible further development of the Platanares and Azacualpa geothermal fields.


The electricity production potential of Nicaragua’s geothermal resources has been estimated at approximately 1,500 MW. Geothermal development in Nicaragua began as early as 1974 when initial drilling took place at the Momotombo steam field; a geothermal plant was brought on line in 1983.90 In the late 1990’s Ormat Technologies took over operations, repaired equipment, and improved plant capacity, which had suffered. The resource has a current installed capacity of 77 MW. Polaris Geothermal developed an additional 10 MW plant, which went on line in 2007 at the San Jacinto-Tizate area. A number of companies are in the development of Nicaragua’s geothermal resources.
Geothermal Development Highlights
▪Ram Power, Corp. is in the process of engineering the San Jacinto-Tizate resource in order to increase production from 10 MW to 82 MW. The San Jacinto-Tizate expansion will occur in three phases. The first phase, to be completed in Q1 2011, will expand capacity to 46 MW. The second phase, to be completed in Q4 2011, will expand capacity to 72 MW. The third and final phase will expand capacity to 82 MW.
▪Ram Power and Magma Energy, Corp. won a bid to jointly explore and develop the Volcán Mombacho and Caldera de Apoyo geothermal resources. Under the agreement Ram Power’s subsidiary, Polaris Geothermal Inc. will act as project operator and both companies will share development costs equally.
▪GeoNica (a joint venture between Enel Latin America and LaGeo) has been engaged in a geothermal resource exploration program at the Managua-Chiltepe and the El Hoyo Montegalán geothermal resources.
National Policies
The Nicaraguan government has set the ambitious goal of increasing the country’s renewable energy generation capacity to meet 80% of the country’s electricity needs by 2014. In order to spur the development of geothermal resources the Nicaraguan government has granted geothermal concessions to a number of national and international companies. In 2002 The Geothermal Law to regulate the exploration and exploitation of Nicaragua’s geothermal resources. Requests for bids on any particular geothermal resource area are issued by the Nicaragua Energy Institute.

The Caribbean: Dominica, Guadeloupe, Montserrat, Netherland Antilles (Saba), St. Kitts and Nevis

While the Caribbean islands harbor potentially significant geothermal resources, efforts to develop them to produce geothermal electricity have been minimal. On the French island of Guadeloupe a 15-MW geothermal flash plant meets approximately 8% of the islands electricity demand.97 Challenges to the development of geothermal energy in Caribbean exist. Most of the island countries have not enacted policies promoting the development of their geothermal resources and have limited laws regulating their electricity sectors. Additionally, small island populations result in smaller electricity markets. Little in the way of incentives is offered by the island nations of the Caribbean.
Geothermal Development Highlights
▪Once completed, the power plant (10 MW), located on Nevis, will meet nearly all of the island’s power needs. A planned second geothermal power plant (30 MW) will deliver electricity to St. Kitts via submarine cable.

Additional projects are planned for the islands of Dominica, Guadeloupe, Montserrat, Saba, and St. Vincent.99
▪West Indies Power is developing the Caribbean Interconnect which will provide power from its geothermal power plants to islands throughout the Caribbean.