During 2019, 80 environmental impact studies were presented to carry out work on electrical networks and to build energy generation plants in different areas of Central American countries.
The interactive platform "Construction in Central America", of the Trade Intelligence Unit of CentralAmericaData, includes an updated list of public and private construction projects that present environmental impact studies (EIS) to the respective institutions in each country.
According to the International Renewable Energy Agency, the geothermal power generation potential of the region is 20 times higher than the current installed capacity.
The main reason behind the low utilization of geothermal energy is the high cost incurred in the initial stages of exploration and evaluation of available resources.However, once that stage is over, it becomes a more economical source of electricity than others, such as fossil fuels, according to studies by the International Renewable Energy Agency (IRENA).
Insurance coverage, tax incentives and drilling costs shared between private businesses and governments are some of the proposals put forward for exploiting geothermal potential in Central America.
A global study by the World Bank analyzes the reasons why it has not been possible to take full advantage of geothermal energy in Latin America, highlighting countries such as Costa Rica, Nicaragua, Argentina and Chile, whose potential to generate energy through this renewable source has still not been fully exploited, mainly because of the high risks involved in geothermal projects in their early stages.
An announcement has been made that the German government will have a credit line of $113 million available to fund geothermal projects in Central America.
The announcement was made by the German ambassador to Nicaragua, Karl-Otto König, who said in an article on Elnuevodiario.com.ni that "...Central America is a region with 'considerable potential' for generating thermal energy which comes from the ground or from volcanoes. "
The fall in oil prices has reversed the cost equation which previously favored investment in renewable energy.
EDITORIAL
The effect of the price of a barrel of oil falling below $50 is now being felt in the decisions which must be taken by energy buyers and regulatory officials in the electricity markets. The thing is that -suddenly - electricity produced using hydrocarbons may cost less than energy from solar power, and even hydroelectricity.
Although the installed capacity is currently small, strong growth is projected in the region as a result of tenders with prices that favor large-scale projects.
A report by IHS Technology predicts rapid growth of photovoltaic capacity in Central America, which will supposedly reach 22 megawatts in 2018.
In reading this report, it should be noted that the country experiencing the largest part of that growth is Honduras, where multiple large-scale projects have been announced in which we have not yet seen the required economic viability, which casts serious doubts on their actual realization.
SMEs in developing countries could generate jobs and significant growth by taking advantage of the market opportunities offered by clean technologies.
From a report by the World Bank:
SMEs in developing countries could generate significant growth and jobs if they take advantage of market opportunities that offer clean technologies, which reach up to $1.6 trillion.
In 2013 63% of the electrical energy fed into the transmission networks in the region was generated from renewable sources.
From a report entitled "Central America: production statistics for the electricity subsector, 2013", prepared by the Economic Commission for Latin America and the Caribbean (ECLAC):
"... The production of electricity in the six countries amounted to 45,735 GWh, 3.3% higher than in 2012.
The World Bank is calling for a Global Geothermal Energy Development Plan in order to take advantage of subsurface heat available in many countries, including those in Central America.
From an article by the World Bank:
"Geothermal energy could be a triple benefit to developing countries: it is clean, reliable and locally produced. And once it is in operation, it is inexpensive and virtually inexhaustible." Sri Mulyani Indrawati, Managing Director, World Bank.
New models of renewable energy developments led by SMEs are providing electricity to low-income rural households.
Elperiodico.com.gt reports that "The lack of oil reserves and rising prices has meant that the energy issue has gained a lot of interest in recent years in Central America. Installed capacity increased from 4129 MW in 1990, to 11,865 MW to in 2011, while net generation increased from 14,175 GWh to 42,115 GWh. "
The region’s geothermal power generation plants exploit only 4% of its estimated potential of 13,000 MW.
Located in a region of considerable volcanic activity, Central America has excellent features for the generation of energy using heat from the earth, however it only generates 506 MW and remains dependent on expensive imported fossil fuels.
El Salvador leads the region, with an installed capacity of 204 MW, representing 24% of its electricity production, a figure that the country aims to increase to 40% by 2020. La Geo, the company that develops plants in the country, plans two new plants in Ahuachapán and Berlin, with three potential new areas also being explored.
GTherm, the owner of the patent, is negotiating with Instituto Costarricense de Electricidad (ICE) to develop a 12 MW pilot project.
Within ICE's strategy to develop clean electricity sources, since October 2010 it is negotiating a pilot project to generate electricity by harnessing geothermal energy in the subsoil, a rich resource in Costa Rica.
Costa Rica spent in 2010 $ 164 million in oil to generate electricity, while it wastes 1,000 MW of geothermal potential.
According to current legal framework and planning, the Instituto Costarricense de Electricidad expects to generate 4,018 megawatts by the year 2016, of which only 35 MW will come from geothermal sources; it represents only 2% of the total.