Ormat Subsidiary Joins Geothermal Rush to Supply Chile’s New Renewable Energy Program

Until this year, Chile’s renewable energy standard required only 3.5% of clean electricity by 2020. This year, they raised it to 20%. Now they are swamped with geothermal bids.

Ormat Technologies Inc  ((NYSE: ORA) South American subsidiary Ormat Andina Energia Ltd was among the companies and subsidiaries of foreign-held companies that submitted bids to explore for geothermal potential throughout Chile, according to the Chilean Energy Ministry. As an indication of how much Chile’s new 20% by 2020 renewable energy standard has catapulted investment interest in developing the nation’s geothermal potential, the last time that the Chilean government put geothermal concessions out to bid, there were only 9 companies bidding on the same amount of land thought to have geothermal potential, and they submitted only 59 bids.

This time, 13 firms submitted a total of 70 bids.

“With a large, untapped potential for geothermal energy, a supportive environment, strong demand for electricity and the mutual eagerness to increase Chile’s renewable portfolio, we are happy to expand our activities in Latin America,” is how Ormat Andina Energia President and COO Yoram Bronicki put it.

One of several concessions Ormat bid on is the 26,000-acre San Pablo II geothermal exploration concession in northern Chile, north of the twin San Pablo and San Pedro volcanoes. It is a key development concession if it turns out to have good geothermal potential, because it is close to copper mines that could potentially use the electricity from a close-by geothermal power plant, and access roads are already built there.

The bidding process was held at the Energy Ministry and was attended by representatives of the bidding companies, the Geothermal Energy Technical Committee and Chilean government representatives.

“We are pleasantly surprised by the great call that this issue has received. This shows that the development of geothermal energy has a very positive future, “said Energy Minister Ricardo Raineri.

Among the competing geothermal bidders from the international geothermal sector were Houston-based EDC Energy Development Corp, with many geothermal projects in the Philippines, Chile Transmark SpA, the Chilean subsidiary of Dutch drilling and financing firm Transmark  Renewable Products, Origin Energy SpA Chile, the Chilean subsidiary of an Australian company and Magma Energy Chile Ltd, the Chilean subsidiary of a Canadian firm, that earlier won a 100000 hectare Pellado geothermal property, 300 km south of Santiago.

Chilean-owned firms included the geothermal developer GGE Chile SpA,  that just won a major interest in a geothermal project in California.

Among the non geothermal firms bidding were Minera Escondida Ltd, which runs the largest copper mine in the world, Compania Minera Zaldivar; Chile’s unlisted private copper miner, Chilean electric utility Colbun SA, Enel Latin America Chile; a renewable power company with hydro holdings, and the Chilean engineering consultants POCH & Associates.

The results will be announced in February.

Image: Flikr user Norvegia2005

:: Ormat Technologies

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