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Nicaragua 67. Like other Central American countries, geothermal development in Nicaragua initially took place under the auspices of the Government-owned power company. With the electricity sector reform of the 90s the private sector was involved and ever since 1999 it operated the largest existing plant (Momotombo); the government is currently developing a new geothermal plant (San Jacinto). Nicaragua has the largest potential in Central America and there is considerable interest on the part of the Government to develop the resource. However, there is still relatively little detailed information about it apart from the two developed sites, and even for the latter, private sector developers have taken a long time in actually investing money into the venture. This trend is exemplified by the San Jacinto field, which has changed hands on multiple occasions and is only now being seriously developed by Ram Power. 68. The approach adopted in Nicaragua is similar to the one in Guatemala, in the sense that the Government is trying to develop its geothermal resources by tendering them to private sector developers. In Nicaragua, the support to the private sector includes, as mentioned above a Geothermal Law which provides assurance on a number of issues specific to the technology, and clear Government support for the developers. A recent tender produced a large number of interested parties for different concession areas. Whether they translate into actual developments, which require drillings, remains to be seen. 69. Problems similar to the situation in Costa Rica existed in Nicaragua in the sense that geothermal resources were located within protected areas. There was a legal reform in 2005 which now allows geothermal development to take place in these regions. The Ministry of Energy and Mines is well equipped to support geothermal development through exploration activities such as geological surveys and geochemical analysis, but they need geophysics equipment. 70. The Government has taken measures to encourage geothermal plants by modifying the environmental law which impeded development of these plants in protected areas. There are currently two geothermal plants in operation: Momotombo and San Jacinto. 71. Momotombo has a sobering history. It was explored around 1968 when a French enterprise drilled four holes, three of which were productive. The field is within what used to be a Somoza farm; Somoza created a drilling company and a geothermal consulting company. The drilling company had a contract with the power company, which remunerated it by meter drilled; as a consequence 48 holes were drilled in a 3km2 area, with no actual development until the 80s (after Somoza was toppled), when the first unit was installed (35 MW, followed by another 35 MW unit in 1988). During its first years of operation Momotombo’s spent fluids were dumped in Lake Managua, with disastrous environmental consequences. 72. Since 1999, ORMAT has operated the field and the power plant—ENEL, the state power generation company, owns the assets—under a contract which expires in 2014. Since then, fluids have been re-injected. The 70 MW capacity exceeds by far the field’s potential: most of the time output is around 28-29 MW. The field requires investments in order to maintain its production capacity. ORMAT estimates that there are approximately ten more years of operations remaining for the plant before the field’s resources will be depleted. 32PDF Image | Drilling Down on Geothermal Potential Central America
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