In El Salvador, the initial plan was that the new Energia del Pacifico power plant would begin operations in early 2022; however, it is currently projected to begin operations until July 1 of next year.
The project located in the Acajutla port area, which will have an installed capacity of 378 megawatts and began construction in 2015, will be delayed a few months.
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).
Through the company LaGeo the government has announced that $250 million is needed to start exploration in new areas and to change a geothermal turbine plant in Berlin.
Authorities at the HEPP Executive Commission of the Lempa River (CEL Group) explained that they have made closer ties with institutions such as the World Bank and the CABEI in order to negotiate possible financing.
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.
The settlement was made through the purchase of the Salvadoran Government for $280 million stake in geothermal LaGeo which owns the Italian company.
From a statement issued by the Executive Hydroelectric Commission of the Lempa River:
While in El Salvador preparations are being made to celebrate the country's independence, in Washington representatives of the Salvadoran government and the Italian company ENEL GREEN POWER are putting and an end to a long running dispute. The agreement allows the Salvadoran State to recover the total shares of LaGeo that had been held by the Italian company.
Despite the agreement signed last December, authorities from the CEL say it reserves the right to activate in civil courts processes to collect compensation for alleged damages.
After ten years of international litigation by the Italian company ENEL for control of the geothermal station Enel Green Power El Salvador, where the Salvadoran State had everything to lose, in December 2014 an agreement was signed at the International Centre for Settlement of Investment Disputes (ICSID) which stated in Article 3 that: "The parties (the Salvadoran State and Enel) have agreed as a condition non precedent of the effects of the Framework Agreement, the final and irrevocable extinction of the civil action of the crime involving Enel Green Power (EGP) and Enel Green Power in El Salvador criminal proceedings number 171-A-2-13 in the Seventh Court of Peace and 133-2013-12 in the Seventh Court of Instruction, both of San Salvador, that will be extended to all natural persons who are accused of crimes in the same instance ... ".
The aim is to have ready by the end of the year designs and technical specifications for the power plant, in order to tender construction of the plant which will use the CHI-3 geothermal well.
At the official opening of the CHI-3 well in the town of Chinameca, it was highlighted that there is "... potential to generate 6 megawatts / hour (MW / h), which belongs to a geothermal field in the area with a potential of approximately 50 MW / h. "
The government has announced plans to increase geothermal generation by 15% with the opening of two new wells, and will seek more investment in the sector.
With a current supply of 204,44 MW generated from geothermal power, the government will be seeking to exploit the potential offered by this source of energy and reach 791 MW. Both wells have depths of 2000 meters, and are located in the city of Chinameca and in the foothills of the San Vicente volcano.
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.
The Italian company Enel Green Power will be selling its stake in the geothermal electricity station LaGeo, which could end to the dispute between the company and the Salvadoran government.
As outlined in an article on Laprensagrafica.com, a transfer of the 36.2% stake belonging to Enel has been valued at $280 million, payable via a trust based on the future flows from LaGeo, an instrument which must be operational before December 15th, 2014.
The Attorney General Prosecutor's Office has announced that the government and the Italian company Enel Green Power have reached an agreement to end the conflict over the ownership structure of LaGeo.
From a statement issued by the Attorney General of the Republic of El Salvador (FGR):
Washington, DC The State of El Salvador and the Italian company ENEL Green Power have reached a framework agreement with a comprehensive solution to the existing dispute over the ownership structure of the company LAGEO SA de CV.
At the request of the parties, arbitration and dialogue has been suspended for 30 days in order to reach an agreement over the shareholding structure of the company LaGeo.
From a statement issued by the Government of El Salvador:
Talks to find solutions to disputes between the State of El Salvador and the Italian company ENEL Green Power, over the ownership structure of the company LAGEO SA, de CV, started today in Washington, DC, with a meeting taking place on the premises of the International Centre for Settlement of Investment Disputes (ICSID), which is the forum for arbitration and conciliation of the World Bank Group.
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.
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