Most of the Costa Rican energy comes from hydroelectric plants throughout the country. Only about 3% of the energy produced per year in Costa Rica does not come from clean and renewable resources. Geothermal energy is the second largest type of energy produced in Costa Rica. However, the production of this type of energy is only 12,84%.
In fact, Costa Rica has the capacity to produce 875 MW per year of geothermal energy. However, to date, it is only producing 195 MW – 22% of what it is capable. ICE (Costa Rican Electrical Institute) is expecting this situation to change by year 2024. ICE is expecting to be fully operating 3 more geothermal plants by that year. All of them located in the Guanacaste, Costa Rica. These projects are Borinquen I, Borinquen II and Pailas II. As a matter of fact, this last project started its construction in 2013 and should be in full operation in 2019.
There are some advantages when it comes to geothermal energy. First, there is still a lot of room to grow in this type of energy production in Costa Rica. Second, the generation of geothermal energy is not affected by climatic conditions in the surrounding areas, which becomes a concern with energy produced by water or wind power.
On the negative side, most of the locations where geothermal energy can be produced are located inside Costa Rican national parks, so ICE cannot exploit those areas. There is a new law being discussed at the Legislative Assembly in Costa Rica, but it has been stuck for 2 years and there is no certainty on when it will be approved.
ICE is expecting to be able to cover 20% of the electrical energy needs in Costa Rica with geothermal energy by year 2035.
Together, these three projects will provide the country with an additional 165 MW of clean energy to the country. As we mentioned before, Pailas II will be the first of the three projects to start operating in 2019 and it will provide energy for over 130.000 homes.
As for the other 2 projects, ICE is expecting to be fully operating, one in 2023 and the other in 2024, and provide energy to about 200.000 homes. The total investment for all three projects is going to be about $1.011 million USD; $337 million USD per project.
Of Course, ICE is going to need financing to complete these projects. That’s why the Japanese International Cooperation Agency (JICA), ICE and the Treasury Ministry are planning to sign a credit agreement in February of 2017 for an amount of $558 million, with a term of 40 years, and an interest rate of 0,6%. The loan will be divided as follows: $234 million for Borinquen I, $157 million for Borinquen II, and $167 million for Pailas II. The other funds to finance the project will come from ICE’s own resources, the European Investment Bank and the Inter-american Development Bank (BID).
ICE is expecting to have a geothermal energy production capacity of 690 MW per year, once all three plants are fully operating. However, this production capacity will depend on the institution’s capacity of exploiting geothermal energy out of the National Parks.
According to ICE, geothermal energy is the second most affordable energy produced in the country. It also reduces the CO2 emissions in the country. That is another reason why it is important to exploit all the available resources for this type of energy, to help Costa Rica become even more green!