Archive for September, 2012


Nicaragua geothermal

It wasKenyaabout a few months ago and it isNicaraguanow!! World Bank through, IFC is fundingNicaraguato develop its geothermal energy resources for power generation!

 The geothermal energy resources for power generation and direct application in central America  are underused market opportunities and the governments have realized it now (though it not too late). The lack of development is due to several factors: regulatory, financial barriers, institutional and economic barriers even though this sources have proven environmental and socioeconomic benefits. Of late private sector participation in geothermal development is becoming very dominant. Private participation is essential due to inherent high cost and risk of exploration of geothermal fields. But the advantage is, once developed the returns masks the initial costs and the plants will run 97% line with minimum interruption and supplying base load electric power that no other source will ensure. It is estimated that the Central America (Guatemala, Honduras, Nicaragua, Costa Rica, Panama) geothermal potential is about 3500 MWe where Nicaragua’s potential is maximum (1100 MWe). Yet to be discovered resources are not included in the above estimate.

 The Nicaragua National Assembly approved national geothermal law and policy in 2002 that established a mechanism for foreign investment in geothermal energy sector. In 2004 approved the first energy policy for the country with an aim to developNicaragua’s energy sector. This energy policy priotorized the use of renewable energy for the national development.

 According to the international market overview report ( 2012) on geothermal energy released by GEA,  in Nicaragua, 251 MWe of electric power is generated from diesel and 230 MWe from Heavy Fuel Oil, 105 MWe from hydro, 88 MWe from geothermal and 40 MWe from gas turbine.  As a result of the country’s energy policy, Ram Power Corp. Has entered the geothermal market in 2011 to develop 36 MWe from San Jacintofield and expects to put power on line by 2012.  Prior to this, Magma Energy  and  Polaris agreed to invest US$ 50 million to develop San Jacinto andSanta Clarafields. 

With the development of San Jacinto fieldNicaraguacan decrease its oil dependence from 70 percent to 50 percent.  IFC is lending about US$ 50 million and secured additional US$ 90 million from private lenders.Nevadabased Ram power is the main leader in developing this asset. The risk taken by the power company in an emerging market like this clearly shows that unlike other renewable power sectors, geothermal has a potential to sell itself with out any market influences or lobbying. It is a fact that geothermal can supply base load uninterested power 97% on line and needs less maintenance unlike other renewable sources. It is expected that by 2013, renewables will provide 51% of electric power (~ 300 MWe) toNicaragua. By exploiting the entire geothermal potential (~ 1200 MWe) Nicaragua will become energy independent in the very near future. Within a short period, the country is able to surge ahead in putting geothermal energy sources at the top the agenda and credit goes to the current presidential team. Other countries that has huge low enthalpy geothermal energy resources should emulate this example and develop this renewable with other non-polluting sources of energy thus reducing the dependence on imported fossil fuels and thereby reducing the carbon dioxide emission.

 In fact the central American geothermal resources were not tapped for a very long time..if one looks at the geothermal development of these countries.Guatemala, for example, started using geothermal heat for dehydration. Direct utilization of geothermal heat for dehydration was started about more than a  decade age…..that too by a farmer and not by a geologist!! These dehydrated fruits and vegetables were then sold in European market and it has a big business now and captured the entire world.  There are several developing countries across the world that need to wakeup and utilize the low enthalpy geothermal resources that untapped.  Governments in some countries are ignorant of the existent of this resource and in a few other countries “”quacks”” are spoiling the development of this resource