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respective capacities (including small projects). The responsibility for developing an indicative power sector expansion plan lies with the regulator (Comisión Nacional de Energía—CNEE); the latest indicative plan corresponds to the 2008–2022 period. It includes a large number of candidate thermal and hydroelectric plants; the only geothermal plant which is included as a candidate is a generic one (44 MW) with an optimistic investment cost of US$1,700/kW. The absence of additional candidate plants is an indication of the lack of information regarding the geothermal resource in Guatemala. 124. The poor state of information regarding the capacity to sustain geothermal resources is in many ways a reflection of the business model implicitly adopted by the country to develop them. Until now it has consisted of expecting the private sector to invest in exploration by assigning concessions; as noted in previous sections, this model is unlikely to succeed given the high risk involved in exploring for geothermal resources, and requires some kind of Government support to mitigate the risk. 125. The Ministry is actively seeking assistance to develop the geothermal component of an inventory of renewables. INDE has been largely in charge of geothermal development and possesses most of the in-country expertise, albeit insufficient. It would be beneficial to include institutional capacity strengthening to build up in-country capacities as part of this process. The process to incentivize geothermal development would involve (a) an exhaustive identification of potential developments, (b) a filter to select the more promising sites and investments in exploratory boreholes to collect basic geochemical and geophysical data, and (c) a further filtering of sites according to the collected data, followed by deeper drillings to confirm the resource. The actual execution of these activities could be done by INDE in coordination with the Ministry, given its greater experience in project management. INDE may lack the capacity to do all of the required geothermal studies, but the actual work could be contracted to an experienced geothermal consultant firm or individual. The results of these activities should be integrated with the hydroelectric catalog and a Master Plan for development of domestic resources should be developed as well. 126. Given the lack of success with the existing model, the business plan for Guatemala should be adjusted in order to incorporate Government support for geothermal development. At one extreme, if the Government decides to advance until the exploratory drilling stage, a great deal of the exploration risk will have been mitigated, and sites in the inventory that have confirmed resources and are candidates for development should then be auctioned off to the private sector which would have the responsibility for full field development. The private sector would be responsible for some amount of residual risk via this approach due to the uncertainty of the information, but it would have considerably less risk in comparison to a green-field project. The lower risk would allow the auction to work in such a way that it could potentially generate enough profits for the Government to recoup its initial exploration investment. In a best case scenario, this approach would allow the operationalization of a revolving fund to finance geothermal development. The other extreme would be an alternative where exploration is conducted in a joint venture by establishing public private partnerships with a mechanism to allow the Government to recycle its investment in successful projects, as outlined in Chapter 4. Honduras 127. In contrast to Guatemala, Honduras lacks a solid institutional setting for developing geothermal resources. Power system planning is executed by ENEE, the national power 47PDF Image | Drilling Down on Geothermal Potential Central America
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