Introduction

Geothermal energy is the heat from the Earth. It's clean and sustainable. Resources of geothermal energy range from the shallow ground to hot water and hot rock found a few miles beneath the Earth's surface, and down even deeper to the extremely high temperatures of the magma. Geothermal energy resources can be found in volcanic and seismic areas as shown in figures 1 and 2.

Figure 1[footnoteRef:1]World most active volcanic areas. [1: Image courtesy of ORMAT]

Figure 2[footnoteRef:2]World tectonic plates and the movements of each one. [2: Map obtained from INSIVUMEH]

Geothermal power requires no fuel (except for pumps), and is therefore immune to fuel cost fluctuations, but capital costs are significant. Drilling accounts for over half the costs, and exploration of deep resources entails significant risks. A typical well doublet (extraction and injection wells) can support from about 4.5 to 8 MW and costs about $10million to drill, with a 20% failure rate. In total, electrical plant construction and well drilling cost about 2-5million perMW of electrical capacity, while the breakeven price is 0.04-0.10 perkWh. Some governments subsidize geothermal projects. Geothermal power is highly scalable: from a rural village to an entire city.

Fluids drawn from the deep earth carry a mixture of gases, notably carbon dioxide (CO2), hydrogen sulfide (H2S), methane (CH4) and ammonia (NH3). In addition to dissolved gases, hot water from geothermal sources may hold in solution trace amounts of toxic chemicals such as mercury, arsenic, boron, and antimony. The modern practice of injecting cooled geothermal fluids back into the Earth to stimulate production has the side benefit of reducing this environmental risk. A comparison between other forms of electricity production is shown on Table 1 below.

GeothermalCoalOilGasNuclearWind

CO2 emission (kg/MWh)12210227605166632

Land UseVery LowHighMediumMediumHighHigh

Freshwater Consumed (liters/MWh)201900160038256012

Table 1[footnoteRef:3] [3: http://spectrum.ieee.org/energy/environment/how-much-water-does-it-take-to-make-electricity ]

Geothermal power is considered to be sustainable because any projected heat extraction is small compared to the Earth's heat content. The Earth has an internal heat content of 1031joules (31015terawatts per hour (TWh)). About 20% of this is residual heat from planetary accretion, and the remainder is attributed to higher radioactive decay rates that existed in the past. Natural heat flows are not in equilibrium, and the planet is slowly cooling down on geologic timescales. Human extraction taps a minute fraction of the natural outflow, often without accelerating it.Even though geothermal power is globally sustainable, extraction must still be monitored to avoid local depletion. Over the course of decades, individual wells draw down local temperatures and water levels until a new equilibrium is reached with natural flows. The three oldest sites, at Lardarello (Italy), Wairakei (New Zealand), and the Geysers (USA) have experienced reduced output because of local depletion. Heat and water, in uncertain proportions, were extracted faster than they were replenished. If production is reduced and water is reinjected, these wells could theoretically recover their full potential. Such mitigation strategies have already been implemented at some sites. In very seismic areas, the heat source might disappear or develop in other nearby areas. The long-term sustainability of geothermal energy has been demonstrated at the Lardarello field in Italy since 1913, at the Wairakei field in New Zealand since 1958, and at The Geysers field in California since 1960. The extinction of several geyser fields has also been attributed to geothermal power development.

The total installed capacity from worldwide geothermal power plant until 2009 is given in Tables 2 and 3. YearInstalledCapacityMW

19751300

19803887

19854764

19905832

19956833

20007972

20058933

200910,715

Table 2[footnoteRef:4] [4: http://www.geothermal-energy.org/]

Installed geothermal electric capacity

CountryCapacity (MW)2007Capacity (MW)2010% of National Energy Production

USA268730860.3

Philippines1969.7190427

Indonesia99211973.7

Mexico9539583

Italy810.5843*

New Zealand471.662810

Iceland421.257530

Japan535.25360.1

El Salvador204.220414

Kenya128.816711.2

Costa Rica162.516614

Nicaragua87.48810

Russia7982*

Turkey3882*

Papua-New Guinea5656*

Guatemala53522.94

Portugal2329*

China27.824*

France14.716*

Ethiopia7.37.3*

Germany8.46.6*

Austria1.11.4*

Australia0.21.1*

Thailand0.30.3*

Total9,731.910,709.7

* Information not availableTable 3[footnoteRef:5] [5: http://www.geothermal-energy.org/]

According to table 3 we are able to see that the Philippines and Iceland generate almost 30% of their electricity from geothermal sources, while El Salvador, Kenya and Costa Rica about 15%. All the last countries mentioned are developing countries with the exception of Iceland.

Guatemala is a developing country, located in Central America. It lies in the edge of the ring of fire, in a region where three tectonic plates meet (see figure 3), is has 36 volcanoes, of which 3 are in constant activity. This makes Guatemala a very interesting country for the exploration and development of geothermal energy.

Figure 3 Location of Guatemala

Figure 4 the three tectonic plates that meet in Guatemala, the Cocos Plate with the Caribbean and North American plates.[footnoteRef:6] [6: Cropped section from figure 2]

Lets have a look of what is Guatemalas economical situation updated January 2010.

FactorDescriptionWorldRanking

GDP (purchasing power parity)$67.87 billion81

GDP - real growth rate0.6% (6.3% in 2007)104

GDP - per capita (PPP)$5,100142

GDP - by sectorAgriculture13.5%

Industry24.4%

Services62%

----

Labor ForceAgriculture50%

Industry15%

Services35%

----

Unemployment3.2%25

Pop. Under Poverty Line56.2%

BudgetRevenues$4.169 billion

Expenditures$5.355 billion

Public Debt27.4% of GDP89

Agriculture Productssugarcane, corn, bananas, coffee, beans, cardamom; cattle, sheep, pigs, chickens----

Industriessugar, textiles and clothing, furniture, chemicals, petroleum, metals, rubber, tourism----

External Debt$7.489 billion90

Table 4[footnoteRef:7] [7: Encyclopedia Microsoft Encarta 2010 and From the UN files and Economic Commission for Latin America and the Caribbean (ECLAC) Comisin Econmica para Amrica Latina y el Caribe (CEPAL) : http://www.eclac.cl/publicaciones/xml/2/38062/Guatemala2.pdf (Accessed September 28, 2010). ]

Guatemala is a country located in a tropical area, hot throughout the year with an average temperature of 20C sometimes rising to 37C. Temperatures fall sharply at night. This means that all the energy needed is electricity and in some cases wood for cooking, this is because electricity is not available or habitants cannot afford gas or electric stoves. No heating is used. Guatemala has mostly a hot weather, sometimes cold weather (temperature might decrease down to 3 or 4 C) appears at the end of the year in the high plateaus. These are areas of very little development (poor areas); therefore they use wood as a warm-up resource, which is the cheapest and easiest way of dealing with the cold in the area. The energy produced in Guatemala is basically to generate electricity. The actual energy sources from which they generate electricity are: coal, fuel oil[footnoteRef:8], diesel, hydroelectric power and geothermal energy (See figure 4). [8: Fuel oil refers only to the heaviest commercial fuel that can be obtained from crude oil, heavier than gasoline and naphtha.]

Actual energy matrix; Oil based electricity is a 46.06%, Hydroelectricity a 37.62%, coal a 13.18%, geothermal electricity generation to a 2.94% and Diesel generation accounts for a 0.2%.Figure 4[footnoteRef:9] [9: Graph provided by the Ministry of Energy and Mines of Guatemala (MEM) from the power point presentation Energy Development]

This leaves us with a critical question: Is the further development of Geothermal Energy suitable for Guatemalas situation? We are now able to say that Geothermal Energy is globally sustainable especially for countries with the perfect characteristics, like Iceland, the Philippines, USA and Guatemala. It certainly offers the best way forward in energy development but Guatemalas lack of economic development and infrastructure plus the lack of government interest and support may hinder this opportunity, which could seriously beneficiate Guatemala in multiple ways. I will try to analyze in detail all points of view obtained in the investigation. I managed to interview important people from the government and the private sector. This combined with all data available about the topic and information provided by the people interviewed will provide us with an appropriate answer to try to see whether Guatemala should focus on the development of this resource.

Is Geothermal Energy suitable toGuatemalas situation?

During the early 1970s, the Organization for Overseas Technical Cooperation Agency (OTCA, now the Japan International Cooperation Agency, and JICA) assisted the Instituto Nacional de Electrificacin (INDE) in the assessment of Guatemalas geothermal resources. Subsequently, several projects were carried out using INDEs own funds and those of a number of financial institutions; the Inter-American Development Bank (IADB), Organization of Petroleum Export Countries (OPEC), Latin American Energy Organization (OLADE), Regional Office for Central America Programs/U.S. Agency for International Development (ROCAP/USAID), European Community, Japan International Cooperation Agency (JICA), and the International Atomic Energy Agency (IAEA). Because of its strong surface manifestations, Moyuta was the first area to be studied, in 1972. Two production-size exploration wells were drilled in the area in 1975, but disappointing downhole temperatures diverted the focus of exploration work to the Zunil, and later to the Amatitln, geothermal areas. After completing preliminary surface surveys, INDE drilled several slim holes in both fields.

Figure 5Map of Guatemala showing the main geothermal hot spots and explorations done up to 1994 and the 2 plants currently generating (Zunil I and II and Amatitln).[footnoteRef:10] [10: Map taken from Estudio de Reconocimiento de los Recursos Geotrmicos de Guatemala: Informe Final INDE internal report and International Geothermal Development, Geothermal Guatemala.]

In 1981, to improve the geothermal resource inventory for the country and establish study priorities, INDE and the Bureau de Recherches Gologiques et Minires (BRGM, France) began carrying out exploration surveys in the 13 geothermal areas (shown in Figure 1), under a co-financing agreement between INDE and OLADE. All the sites are located within the southern east-west volcanic cordillera that extends across the country and covers 30 percent of Guatemala between its borders with El Salvador and Mexico. As a result of these studies, and those carried out by OTCA in the 1970s, the Zunil and Amatitln geothermal areas received the highest priority for further study and possible development. In 1993 Totonicapn geothermal area was also identified as high-priority. A somewhat lower priority was assigned to San Marcos and Tecuamburro.

Geothermal resources in Guatemala are estimated at 800 to 4,000 megawatts (MW) capacity, most likely about 1,000 MW.[footnoteRef:11] Considering that the countrys current installed electricity generation capacity is 1,700 MW, which is equal to the average consumption per day (shown in Figure 1), geothermal energy could contribute significantly to a secure power supply to meet future electricity demands which will tend to rise up to the electricity peak consumption. [11: Lippmann, M., 2002. Geothermal and Electricity Market in Central America. Geothermal Resources Council Transactions, v. 26, p. 37-42.]

Figure 6[footnoteRef:12] [12: Digital copy of sketch made by Carlos B. Echeverra CEO Power]

The most serious impediment to this outcome is investor perception of risk, considering the high upfront investment required to find and confirm the existence of commercial-size geothermal resources, and in the time required to amortize[footnoteRef:13] such investments. Unfortunately, the amortization period usually begins at a time when the characteristics and potential of a geothermal field have yet to be established, and when the real cost of operating and maintaining the field (i.e., steam cost) is unknown. In addition, it should be remembered that sound amortization and return on investment depends on the stability of the electricity market or on signing long-term power purchase agreements. Commercial banks are reluctant to finance geothermal projects unless a substantial portion of the required amount and quality of steam has been proven. In addition, when this condition has been fulfilled, banks usually offer loans (to pay for up front and construction investments) that have short maturity periods. In Guatemala, the developer usually must pay a premium related to the country risk. All of these obstacles discourage the utilization of geothermal energy. These include continuous availability, reduced amounts of money spent on fuel imports, friendliness to the environment, and the possibility of use for both generating electricity and direct geothermal applications. [13: Amortization is the reduction of the value of an asset by prorating its cost over a period of years]

Geothermal energy generation in Guatemala is developed along with the concept of conservation development. This means that the plants are built with a conservation design which is based on a controlled-growth land use development that adopts the principle for allowing limited sustainable development while protecting the areas natural environmental features like open space landscape and vista, protecting farmland or natural habitats for wildlife, and maintaining the character of rural communities. A conservation development is usually defined as a project that dedicates a minimum of 50% of the total development parcel as open space. In the case of Guatemala this 50% is area of the villagers or the rainforests, providing a full environmental sustainability in the area. Environmental sustainability is the process of making sure current processes of interaction with the environment are pursued with the idea of keeping the environment as original as naturally possible. In the areas where the hot spots are found there is no problem for the plants to settle there and start operating. The carrying systems connected to the extraction wells do not take a lot of space. Nature is not touched at all. We build the plant in most adequate area and the people in the villages continue growing their crops where they have been doing it for the last 30 years. Rainforests grow around the plant. The geothermal electricity generation, does not affect nature, instead it provides an extraction of minerals from great depths which help plants to grow even faster, and they are not dangerous at all. Sulphur is the main mineral extracted in the plant most of it just goes back to the earth, but it provides a better environment for many plants here. The fact that it rains a lot in the area helps a lot in the environmental conservation. Probably the big problem that faces the plant is noise pollution, as the turbines create a lot of noise. Thus probably the most affected ones are the animal species living near the plant [footnoteRef:14] This is true for most of the geothermal areas in the world, or they are located where nature is not affected at all like in Iceland (in the vast inhabited areas) or like in Guatemala in the middle of the rainforest. [14: Extraction of Interview made to Luis Carlos Villegas General Manager ORMAT Zunil.Pictures are courtesy of ORMAT]

http://www.eclac.cl/publicaciones/xml/2/38062/Guatemala2.pdf