Australian company seeks to expand geothermal energy in Chile

www.santiagotimes.cl
9 Feb 2012

(Chile) Hot Rock has invested US$50 million over the past five years for exploration, development. A belt of active and dormant volcanoes in Chile has become a hot spot for foreign investment from Australia in clean geothermal energy. "In this emerging industry we see it as very exciting, we are very pleased to be in Chile and we can see geothermal energy here moving forward to generation within the next five years", Mark Elliot from Australian geothermal company Hot Rock said.

Hot Rock, in a joint venture with Energy Development Cooperation (EDC), has invested over US$50 million in the last five years in future projects, and that figure is set to rise. Historically, the Chilean power market has been well supplied with electricity from hydroelectric power and imported natural gas from Argentina. However, Chile has had to deal with less hydroelectric resources recently due to the drier weather conditions. There have also been interruptions in natural gas supplies from Argentina to Chile due to Argentina's own shortage of gas.

"This has put the local market in a power crisis and made the Chilean government understand the importance of energy security", Elliot said. "When you consider that Chile has a large number of volcanoes, which are essential to forming geothermal power, it´s an opportunity that is sitting in front of them to use clean base load energy".

Geothermal energy is recognized as a renewable energy source with little greenhouse emissions capable of base load power, meaning it operates continuously. Hot Rock has identified 300 potential geothermal areas, including areas southeast of Santiago and northeast of Antofagasta. These areas show Chile has huge potential in developing volcanic geothermal resources for electricity generation. They started exploring for geothermal projects in Chile in 2008 and now with EDC are planning to complete exploration within the next three to four years and start construction in the fourth year.

Elliot said 200 jobs would be created for Chileans to work in the plant construction process alone. "We have employed people to work for us in Chile and can employ a further 20 to 30 people per plant after construction is finished", he said. "Secondary businesses can be set up as spin offs from geothermal projects, as the fluid used in the process can be recycled later in the agricultural industry to create more jobs".

Juan Pablo Orrego from Ecosistemas, an environmental NGO in Chile, said geothermal energy is good but should be combined with other sources of energy. "Geothermal energy plays an important role in a country full of volcanoes, but we want to see it on a smaller scale combined with solar and wind-producing energy", he said. Elliot, however, said geothermal energy is more efficient compared to other renewable energy sources. "Geothermal can be operated 24 hours a day 7 days a week as opposed to solar power, which operates 25% of the time due to its reliance on the sun", Elliot said. "Wind power only operates at 30%".

Geothermal energy is produced extracting the natural internal heat of the earth to create electricity. The volcanoes in Chile heat ground water to more than 392° Fahrenheit. This water can be used as an energy source and is fed from drill holes into a power plant to drive a steam turbine and generator to produce electricity. The growth of this industry has not been without its growing pains. Elliot said some local landowners and some politicians have presented obstacles. "Some politicians are not totally committed. In some cases the landowners are not allowing us to explore and the Chilean government is aware of this and we hope they will do something about it", Elliot said. "Otherwise it will be a lot slower getting this energy into the grid".

Orrego said many locals distrust authorities and resist change. If the companies investing in the area want respect, then Orrego believes that the locals need to be involved. Often times they have not benefited from large power plants. "By instinct these people are in opposition to other ways of providing energy. The system is bias toward hydroelectric energy", Orrego said. Elliot said the locals would not be overlooked in the operation of the plants. "We feel the local people are important to our projects. We want to involve them and let them know what is happening in their country", he said.

Meanwhile, Elliot hopes that Chilean authorities and landowners see the potential geothermal energy has in Chile. "The government can lose some of the investment and interest that is going on in Chile because there are other countries such as Kenya and Peru which have potential and are keen to see it developed", Elliot said. Hot Rock completed a due diligence report in January 2011 to show the relevancy for geothermal power plants in these regions. The report says the company is the largest holder of volcanic geothermal projects in Chile and Peru.

Two of the places it lists as potential areas for future projects are the Puntas Negras Volcono, Antofagasta, North of Santiago and the Villarica Volcano in the lakes district in Southern Chile. According to Hot Rock, no other geothermal prospects have yet been developed for electricity use in Chile. "The international geothermal exploration community have recognized the potential in Chile, and have wanted to take up projects to explore to help them with that development so we will be carrying out drilling and anticipating discovery of geothermal resources there", Elliot said.