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Title: Geothermal barriers, policies and economics in Chile – Lessons for the Andes

Abstract

The Andes is the largest undeveloped geothermal region in the world. The Chilean case is the most puzzling because the country is largely dependent on imported fuels causing, among other issues, high energy prices and energy dependency. But even though it has large quantities of geothermal resources which have been explored since the 1920s, no geothermal power plant has been constructed yet. The barriers for geothermal development in Chile have not been studied in detail and limited information is available about the real economic feasibility of geothermal power generation and whether effective incentives are needed for its development. In this study we present an integrated analysis of geoscientific, economic, historical and regulatory aspects of geothermal development in Chile based on the compilation of new and previously published data. Through a survey of key participants from government institutions, industry and academia we identified the main perceived advantages, barriers, and efficient incentives. The absence of clear medium-to-long term energy policies and a lack of government incentives for companies to overcome financial risk are perceived as the main barriers. Additionally, we calculated the estimated average Levelized Costs of Energy (LCoE) of geothermal electricity generation using different scenarios to illustrate the potential impact ofmore » possible government policies. The present conditions and without incentives we estimated a base case geothermal LCoE in Chile which would be "near competitive" compared to the average contract prices. Further analysis would be needed to estimate the effect of different policy incentives more rigorously. Finally, we propose some guidelines for geothermal stakeholders to encourage geothermal power development; these might prove useful to other Andean and developing countries as well.« less

Authors:
 [1];  [2];  [3];  [4];  [3];  [5];  [6];  [1]
+ Show Author Affiliations
  1. University of Chile, Santiago (Chile); Andean Geothermal Center of Excellence, Santiago (Chile)
  2. Pontificia University Catolica de Chile, Santiago (Chile); Andean Geothermal Center of Excellence, Santiago (Chile)
  3. University of Auckland (New Zealand)
  4. Lawrence Berkeley National Laboratory (LBNL), Berkeley, CA (United States). Earth Sciences Division
  5. University of Pittsburgh, PA (United States)
  6. University of Chile, Santiago (Chile); Solar Energy Research Center, Santiago (Chile)
Publication Date:
Research Org.:
Lawrence Berkeley National Laboratory (LBNL), Berkeley, CA (United States)
Sponsoring Org.:
USDOE Office of Energy Efficiency and Renewable Energy (EERE); CONICYT FONDAP; CONICYT International Network Program; Higher Education Quality Improvement Program (MECESUP)
OSTI Identifier:
1580073
Alternate Identifier(s):
OSTI ID: 1357691
Grant/Contract Number:  
AC02-05CH11231; UCH0708
Resource Type:
Accepted Manuscript
Journal Name:
Renewable and Sustainable Energy Reviews
Additional Journal Information:
Journal Volume: 51; Journal Issue: C; Journal ID: ISSN 1364-0321
Publisher:
Elsevier
Country of Publication:
United States
Language:
English
Subject:
15 GEOTHERMAL ENERGY; geothermal; barriers and incentives; LCoE; Chile; Andes; energy policies; economy

Citation Formats

Sanchez-Alfaro, Pablo, Sielfeld, Gerd, Campen, Bart Van, Dobson, Patrick, Fuentes, Víctor, Reed, Andy, Palma-Behnke, Rodrigo, and Morata, Diego. Geothermal barriers, policies and economics in Chile – Lessons for the Andes. United States: N. p., 2015. Web. doi:10.1016/j.rser.2015.07.001.
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Sanchez-Alfaro, Pablo, Sielfeld, Gerd, Campen, Bart Van, Dobson, Patrick, Fuentes, Víctor, Reed, Andy, Palma-Behnke, Rodrigo, & Morata, Diego. Geothermal barriers, policies and economics in Chile – Lessons for the Andes. United States. https://doi.org/10.1016/j.rser.2015.07.001
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Sanchez-Alfaro, Pablo, Sielfeld, Gerd, Campen, Bart Van, Dobson, Patrick, Fuentes, Víctor, Reed, Andy, Palma-Behnke, Rodrigo, and Morata, Diego. Thu . "Geothermal barriers, policies and economics in Chile – Lessons for the Andes". United States. https://doi.org/10.1016/j.rser.2015.07.001. https://www.osti.gov/servlets/purl/1580073.
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@article{osti_1580073,
title = {Geothermal barriers, policies and economics in Chile – Lessons for the Andes},
author = {Sanchez-Alfaro, Pablo and Sielfeld, Gerd and Campen, Bart Van and Dobson, Patrick and Fuentes, Víctor and Reed, Andy and Palma-Behnke, Rodrigo and Morata, Diego},
abstractNote = {The Andes is the largest undeveloped geothermal region in the world. The Chilean case is the most puzzling because the country is largely dependent on imported fuels causing, among other issues, high energy prices and energy dependency. But even though it has large quantities of geothermal resources which have been explored since the 1920s, no geothermal power plant has been constructed yet. The barriers for geothermal development in Chile have not been studied in detail and limited information is available about the real economic feasibility of geothermal power generation and whether effective incentives are needed for its development. In this study we present an integrated analysis of geoscientific, economic, historical and regulatory aspects of geothermal development in Chile based on the compilation of new and previously published data. Through a survey of key participants from government institutions, industry and academia we identified the main perceived advantages, barriers, and efficient incentives. The absence of clear medium-to-long term energy policies and a lack of government incentives for companies to overcome financial risk are perceived as the main barriers. Additionally, we calculated the estimated average Levelized Costs of Energy (LCoE) of geothermal electricity generation using different scenarios to illustrate the potential impact of possible government policies. The present conditions and without incentives we estimated a base case geothermal LCoE in Chile which would be "near competitive" compared to the average contract prices. Further analysis would be needed to estimate the effect of different policy incentives more rigorously. Finally, we propose some guidelines for geothermal stakeholders to encourage geothermal power development; these might prove useful to other Andean and developing countries as well.},
doi = {10.1016/j.rser.2015.07.001},
journal = {Renewable and Sustainable Energy Reviews},
number = C,
volume = 51,
place = {United States},
year = {Thu Jul 30 00:00:00 EDT 2015},
month = {Thu Jul 30 00:00:00 EDT 2015}
}
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https://doi.org/10.1016/j.rser.2015.07.001
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