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potentially lead to market failure if left to the private sector. The actual field work can be contracted out, but the government should own and keep the inventory. Environmental and social impacts 104. The potential environmental and social impacts of geothermal plants are generally small and compare favorably to fossil fuel technologies as well as other types of renewable technologies. However, if not managed properly, these impacts can have significant consequences and implications. For example, some of the earlier geothermal projects did not have reinjection measures, causing a precipitous drop of the hot fluid pressure and thus the production capacity as well as damage by residual fluids discharged to the surface environment. Nicaragua's Momotombo plant is such an example, whose tarnished reputation is still not fully recovered to this day. At the other extreme, Costa Rica has outlawed geothermal development in protected areas; however, these areas include most of Costa Rica's geothermal potential. Moreover, effective procedures and guidelines for following the laws and regulations will greatly facilitate the development process. All potential projects in Central America need to complete an environmental impact assessment (EIA), however, the procedures for how to do so are not clearly defined and disseminated, nor are the costs of such an assessment standardized. As a result, companies may spend years trying to get environmental clearance to begin a project simply because the legislation is not easy to interpret. 105. Strengthening the environmental regulatory framework is equally important. The social and environmental context in Central America is an important consideration for any project. No two geothermal projects will be exactly the same so time needs to be invested at the start of a project to understand the ramifications of exploration, drilling and development. The following actions are needed in order to address environmental and social challenges to advancing geothermal energy in Central America: x Consider all impacts and costs. This is especially relevant to construction related impacts of ancillary works such as roads; x Ensure stakeholder involvement and improved communications. Specific requirements of environmental management plans may not be well understood in the community at large; x Support capacity building of key environmental and social management agencies. Teams need to consider ramifications beyond the project’s counterpart. Local government units needed to be engaged in carrying out monitoring and compliance tasks; x Encourage coordination and dialogue. Projects often require inter-agency coordination which may not be structured or may lack the leadership necessary to drive the dialogue; x Regulatory requirements should be clear. Companies are often unclear as to what is required due to lack of a solid legal framework, regulations, clarity of institutional roles and responsibilities; x Best-practices from other countries can be adapted to local national conditions; x Create an efficient and predictable review process. Project developers desire more rapid and efficient licensing procedures; and x Limit project environmental and social liabilities. It is important to develop clear agreements with specific annual work plans, budget resources and specific measurable outcomes. 42PDF Image | Drilling Down on Geothermal Potential Central America
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