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Chapter 1. Understanding Geothermal Power Objectives of the study 1. The objective of this study, which draws on regional information and international experience, is to assess the potential for expanding the use of geothermal energy for electric power generation in Central America and to discuss how the countries of the region can overcome the resource uncertainties as well as the policy, institutional, and financing constraints facing geothermal power development. Central America is defined herein as the following six countries of the region within the region’s electric interconnection system (SIEPAC for its Spanish acronym), namely Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama. Although this study is specific to the challenges and recommendations to promote geothermal power in the Central American context, the findings of the study should be relevant to energy regulators, public and private renewable energy project developers and financing institutions interested in investing in geothermal energy development around the world. 2. Geothermal generation is important given the urgent needs in Central America to diversify the region’s generation matrix and enhance energy security. Geothermal resources are naturally available and renewable and have been utilized for heat and power generation purposes for nearly a century. The cumulative experience in different countries and development of exploration and power generation technologies in the last decades have collectively driven the technology far along in the learning curve, making it increasingly more competitive to other conventional technologies. However, to date it is widely acknowledged that these resources are underutilized in Central America as well as the rest of the world. This study attempts to shed light on why this is the case by taking stock of today’s technology development and global overview in geothermal development. The study then focuses on Central American countries, identifies main challenges faced by different countries and possible course of actions, and makes regional and country recommendations for further developing the economically and technically viable geothermal resource. Organization of the report 3. The report is structured as follows. Chapter 2 provides a brief overview of the basics of geothermal resources and technologies, the current state of development in the world, and the major advantages of geothermal power. Chapter 3 offers a regional view of the power sector in Central America, the resource potential for geothermal energy, the regulatory framework and enabling environment for geothermal development, and business models used in Central America for geothermal technology. Chapter 4 describes key barriers to geothermal development, possible solutions based on international and regional experience and possible course of actions. Chapter 5 offers regional country-specific recommendations to increase the penetration of geothermal technologies in the energy sector of Central America. 1PDF Image | Drilling Down on Geothermal Potential Central America
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