The legal obstacles of geothermal energy in ChileMonday, 26 de September
In a new talk organized by CEGA, the specialist in environmental law, Miguel Saldivia, reviewed the main difficulties and the legal voids on the Chilean geothermal energy concessions law, which in many aspects presents huge similarities with the mining law, except in the details that bring clarity in its application and identity in the characteristics that are specific to the use of geothermal energy.
Deadline delays of up to five times in the approval for concession applications; social and environmental barriers that are noticed only after the Environmental Impact Evaluation which is performed at a project advanced state; and a series of loopholes in regulation that discourages investment, are the main barriers identified by Miguel Saldivia, lawyer of the University of Chile and specialist in environmental law and energy projects, who presented his talk “Legal barriers to the entry of geothermal energy in Chile” by the end of July at CEGA.
Chile has one of the largest geothermal potential in the world. Geological studies have estimated a capacity of 16,000 MW, which could supply 91% of currently installed energy matrix. However, the promise of these numbers has not translated into a development policy, and untill now, Chile does`t have plants that produce electricity from the heat of the earth. “The lack of clarity that presents the geothermal energy law in some aspects, it`s example of the authorities`s lack of interest for their development. When there is interest in something, it shows. In many parts geothermal energy law seems similar to the mining, except that in mining law are details about the applications on a case of many variables, which in geothermal not exist, creating uncertainty about how to move forward or resolve conflicts overlays rights”, says the lawyer.
Why Chile is not producing geothermal energy yet? Wich are the obstacles that companies face? What is currently being done to promote the development of this energy? These are some of the questions that lead Saldivia’s research , who currently works at the law firm Carey, in addition to teaching courses at the University of Chile.
For Saldivia, one of the major difficulties lies in the legal framework that regulates geothermal energy. There are still many gaps, obstacles and lack of clarity with respect to the processes that are part of the exploration and exploitation phases. Along these lines, the lawyer mentions as one of the main problems the slowness with which concessions are managed: “Although the law N ° 19.657 on geothermal concessions establishes that the Ministry of Energy has 90 days to resolve a request, this practice can take more than 400 working days. The reason is explained in part for the large number of State Agencies that are consulted during the process , something that could be solved with only improving coordination between them”.
In addition to this, there is also the time barrier, as according to researchers’ experience , two years of concession are not enough to develop a field exploration. On this last, Saldivia stresses the urgency to increase the term at least to three years: “Geothermal energy has a preliminary phase of identification of the resource that can take more time of the budgeted, as includes geophysical and chemical studies. The problem is this is not considerate as a factors that may slow the process, as in the case of work carried out in the mountain range, where there is snow and bad roads that often stop exploration activity during some months of the year.”
Is added also to the list of barriers the uncertainty facing when a geothermal project must enter to the Environmental Impact Evaluation System (SEIA). In this regard, Saldivia stall that although the law says that all the power plants that generate more than 3MW must pass by the SEIA, it is not considerate that geothermal energy begins its activity in the exploration stage, much before producing electricity: “For not being forced to submit projects to evaluation during the exploration phase, companies run the risk of encountering indigenous communities, protected areas and other projects that can prevent exploitation in an area. Hence the importance of having clear rules of the game from the very start”.
Saldivia believes that the legal loopholes around geothermal energy is an expression of how is still to be done in national energy policy: “While there have been attempts to update the law, proposals that seek to streamline concessions or regulate low enthalpy projects are frozen at the Congress. So it`s fundamental to highlight the urgency of these issues and how left behind we are in this matter. That is the only way to wake up these projects and promote openness to this type of energy.”