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systematic regulatory approach to the development of geothermal energy rather than a disparate set of laws that have been created on an ad hoc basis. There is a need to combine the current disparate regulations into a coherent whole and/or a geothermal-specific national policy. For example, Costa Rica currently has restrictions on any development in the National Parks to maintain the environmental integrity of the land; however, most of the potential geothermal sites in the country are located in these restricted areas. There is a need to allow regulated installation of power plants, such as geothermal, which can be built without degrading the environment. 99. The public sector role in developing geothermal projects does not cease even if geological risk has been surmounted. Before a private developer agrees on participating in a partnership it will assess other sources of risk, such as country and regulatory risks. The government can help reduce the risk by establishing a solid regulatory framework regarding both geothermal development (e.g. through a geothermal law, as in Nicaragua) and power sector expansion and operations (e.g. by appropriate assurances that the resource will be economically dispatched and remunerated when a power market exists). The government can also support the development of private sector geothermal plants by offering assistance in reducing the cost of financing, and make publicly available a geothermal resource inventory and guarantees (e.g. with multilateral support) regarding political risk/force majeure. Geothermal resource inventory 100. A geothermal resource inventory includes an identification of geothermal sites and initial estimate of their power generation potentials. Field work is usually required to construct a database of the location and primary parameters that define the nature and characteristics of the geothermal sites, i.e. Phases I and II of geothermal development. First estimation of the power generation potentials of each site can be done using the field data collected and the volumetric Monte Carlo simulation method. Other characteristics of the sites which might affect site development, including environmental and social aspects, shall also be integrated in the database. 101. Few countries have an exhaustive geothermal inventory due to various reasons. First, the needed information does not exist or of poor quality because little field work, including surface surveys and exploration, has been done to collect and verify the information. Second, some of the field work has been done by different parties; in case it’s done by the private sector, the corresponding information collected becomes proprietary and not available to the public. Third, few governments have taken an active role in building up such inventory; due to high risk in these early stages of geothermal development as mentioned earlier in the report, the private sector is not willing to enter at the exploration stage unless there are strong incentives and risk mitigation mechanisms in place (which will be discussed in detail later). 102. A comprehensive inventory with high quality information is essential to geothermal development in general and a strong invitation to the private sector. Nicaragua is the only country in Central America that has completed a geothermal resource inventory and the private sector showed a lot of interest in getting exploration concessions. Still, only the sites with quality resource information have been developed by the private sector. 103. The public sector should be responsible for developing the inventory and allocating adequate budget resources. The misalignment of incentives for this type of activities could 41PDF Image | Drilling Down on Geothermal Potential Central America
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