Latin America, with its abundant geothermal resources, is poised for further rational development.
Recently, several Latin American countries have announced an increase in the development of geothermal resources to promote the application of geothermal energy. As the decarbonization process of energy systems in Latin American countries accelerates, low-carbon and stable geothermal energy has attracted a lot of attention and has become the latest "hotspot" for the development of clean energy in the region.
In January this year, the Colombian government granted the country's first geothermal power project permit to the oil producer Parex Resources, with the project's capacity expected to increase from the previously estimated 15-60 kilowatts to 120 kilowatts. In the following months, the Colombian government has repeatedly stated its intention to increase the development and utilization of geothermal resources. According to data released by the Colombian Geological Service (SGC), the preliminary assessment of the geothermal resource potential within Colombia can reach 1,170 megawatts.
To expand the application of geothermal energy, the Colombian National Hydrocarbons Agency (ANH) recently stated that Colombia will consider developing geothermal resources in the country's volcanic regions and will promote the development of commercial projects after confirming sufficient resource potential.
As a low-carbon renewable energy source, geothermal energy has huge prospects for utilization in fields such as power generation and heating, and has been gaining attention in recent years. Not only Colombia, but also countries like Mexico, El Salvador, and Costa Rica have been continuously increasing the scale of their geothermal energy projects.
In January this year, El Salvador also announced that it will expand the development of geothermal energy projects. According to the El Salvadoran water resources department, the country currently plans to start construction projects in two areas rich in geothermal resources and will explore more resource space. Mexico's development of geothermal energy projects has a long history, and according to BNAmericas, as of April this year, the total installed capacity of Mexico's geothermal development has reached 964 megawatts, with the largest geothermal energy project having an installed capacity of 720 megawatts.
Research institute Rystad Energy statistics show that currently, the total identified geothermal resources in the Latin American region can reach 33 gigawatts, of which Mexico, Costa Rica, and El Salvador account for 75% of the total resources. However, the installed capacity of projects developed by countries is only 2 gigawatts, with a development ratio of less than 10%.
Several energy research institutions have pointed out that with the acceleration of the energy transition process in various countries, the scale of geothermal projects in Latin American countries is expected to rise rapidly. Rystad Energy predicts that by 2027, investment in the geothermal sector in Latin America will soar from the current USD 570 million to USD 1.3 billion, an increase of over 100%. With the investment in place, the installed capacity of geothermal power generation in the region is expected to grow rapidly to over 1.4 gigawatts.
Looking at the current development model of geothermal energy in Latin American countries, geothermal energy projects can not only provide thermal energy but can also be integrated with other industries to maximize project value. Taking El Salvador as an example, the country's energy company "Volcanic Energy" and Luxor Technology announced at the end of last year that they will collect geothermal energy resources near volcanic lava and provide energy support for Bitcoin "mining" projects.
In addition, the coordinated development of geothermal energy and lithium resources has also attracted attention. Rystad Energy pointed out that there has been a recent technological breakthrough in the development of lithium in geothermal resource areas, which means that regions with geothermal resources will be able to manage this abundant natural resource more efficiently. The simultaneous development of geothermal resources and lithium resource mining will also bring dual benefits to Latin American countries.
Although the potential for geothermal energy resource development is huge, to fully unleash the potential of geothermal resources, countries need not only technological progress but also relevant regulatory frameworks and market support. The high initial cost of investment is a major challenge to the development of geothermal energy projects.