Guidelines for geothermal generation

Regulation & Policy    Aug 25, 2021 3:10 PM

The Ministry of Mines and Energy (MinEnergia) issued a resolution on guidelines and requirements for geothermal generation.

The goal is to increase knowledge about the subsoil and encourage the E&P of geothermal resources for power generation, Valora Analitik reported.

The regulation will be up for comments until September 3rd, 2021.

MinEnergia will issue a regulation of technical conditions establishing the requirements and obligations for developing activities during the exploration and production stage.

The regulation will include the requirements for drilling, injection, abandonment of wells and the requirements for sustainable exploitation.

The entity will determine how it will monitor, supervise and control compliance with these technical obligations.

The technical requirements will include the necessary measures to guarantee the use of best practices for development, environmental protection, safety of the operations and sustainable development.

The new resolution establishes that the company must comply with all applicable environmental requirements, including environmental license, permits, concessions, authorizations and other environmental procedures. The purpose of this is to prevent, mitigate, correct or compensate the environmental impacts and effects duly identified.

The entity clarified that, in no case, projects will be developed in the areas of the National System of Protected Areas (Sinap) or contrary to the provisions of Law 1930 of 2018.

Companies interested in applying for the respective environmental license must be registered for both exploration and production stages.

MinEnergia may require the constitution of guarantees for the projects’ registration in the geothermal registry, to guarantee compliance with the obligations.

Bottom-Line: The government should create a flexible and attractive regulation for investors, considering that geothermal generation is a long-term bet, and is currently expensive.

Authorities should make a greater effort to speed up the environmental licensing processes in the country, as this pushes investors away from the country.

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