Fossil fuels continue to be the main resource for energy production both in Latin America and in the world. Unfortunately, their use carries great consequences for climate change and the environment. The good news is that tackling climate change is finally being conceived as an opportunity.
Latin America is the region that generates the highest proportion of renewable energy in the world. 80% of this renewable energy is produced in hydroelectric dams, but other power sources, such as wind, solar radiation, and geothermal energy are increasingly important.
Chile is a country of a great ambition. The government expects that by 2050, 90% of energy generation will come from clean energies, and the country hopes to accompany that with a diversification strategy. One of the most promising technologies along the Andes is geothermal. Unlike solar and wind technologies, whose energy production varies every hour subject to the availability of resources, geothermal energy can generate power constantly.
However, geothermal energy presents a problem. During the exploration stage, when the availability of the resource is still uncertain, it is necessary to invest a considerable amount of capital to drill wells. To address this problem, IDB Invest, with resources from the Climate Investment Funds (CIFs), created the Geothermal Risk Mitigation (MiRiG) program, which offers developers of geothermal projects a financial product to address the high risk of exploration.
This program has already borne fruit in the form of the first geothermal plant in South America: Cerro Pabellón of Enel Green Power Chile, whose exploration works were supported with US$ 30 million from the CIF.
Located in the Atacama Desert, at an altitude of more than 4,500 meters above sea level, Cerro Pabellón currently consists of two units with a capacity of 48 MW, a transmission line of 80 kilometers and other associated facilities. The company is now working on the third unit, which would add another 27 MW of capacity. Cerro Pabellón will generate enough electricity for more than 165,000 homes.
Today, more than half a year after its opening, the project will welcome a delegation led by Mafalda Duarte, head of the CIF, and Amal-Lee Amin, head of the IDB’s Climate Change Division. This year the CIFs are commemorating their 10th anniversary and as a celebration, they are visiting several projects that improve lives and contribute to addressing climate change in Latin America and the Caribbean.
Did you like the post? Read all about the first CIFs project visit in Bogota.
Photo credit: Geo Thermal, Flickr