Colombian geothermal potential

As stated by the Colombian Geological Service in August 2020, using the volumetric method, the geothermal potential of Colombia was calculated from the geothermometric information of the thermal springs registered in the national territory and, assuming a specific volume of influence of a spring or group of thermal springs (cluster), as a possible reservoir.

With an area of influence of 2 km2 and a thickness of 1.5 km for each thermal spring, these were grouped into a total of 165 clusters (group of springs or isolated thermal springs) distributed in 21 geothermal areas and 16 departments, located inside and outside the preliminarily delimited geothermal areas.

The 21 geothermal areas associated with active and inactive volcanic systems are grouped in 5 blocks located in the Eastern Mountain Range (Paipa – Iza); North (San Diego and Cerro Bravo – Cerro Machín) and South (Huila – Sucubún and Las Ánimas – Chiles) of the Central Mountain Range, with some areas on the eastern flank of the Western Mountain Range (Azufral, Cumbal and Chiles – Cerro Negro). Thermal springs outside the defined geothermal areas are distributed in 16 departments located in coastal areas (Atlántico, Magdalena, Chocó), in the Andean Zone (Boyacá, Antioquia, Tolima, Huila, Cauca, Nariño, Cesar, Norte de Santander, Santander), and in the plains foothills, Eastern Plains and Amazon (Arauca, Casanare, Meta, Guaviare).

The total electrical power of the 21 geothermal areas distributed in 80 clusters was calculated at 1170.20 MWe with a heat storage of 138.60 EJ. The largest resource is found in the geothermal areas of San Diego, Santa Rosa, Cerro Machín and Nereidas Botero Londoño with 141.85, 137.24, 129.94 and 100.72 MWe, respectively, all located in the northern block of the Central Mountain Range. To the south, the areas of Caldera del Paletará with 117.96 MWe and Azufral with 81.9 MWe stand out.

Of the 16 departments with thermal springs, a total of 24.95 MWe of electrical power and 49.56 EJ of heat were calculated, distributed in 85 clusters. The greatest potential is in the department of Huila with 12.09 MWe and 7.08 EJ, distributed in 11 clusters. Cundinamarca has the highest number of thermal springs (50) grouped in 24 clusters showing the highest amount of heat (15.75 EJ), but with a low power of 1.99 MWe.

Recent regulation and diversifying the country’s energy matrix

The National Government, through the Ministry of Mines and Energy, continues to promote the diversification of Colombia’s energy matrix towards one that is cleaner and more environmentally friendly.

During the Sustainability Facts Forum in September 2022, former Minister of Mines and Energy, Diego Mesa, announced that the Colombian government would issue regulations that stimulate the development of energy generation projects taking advantage of the geothermal resources available in the country.

According to Mesa, this is a new step in the execution of the roadmap designed to advance the energy transition, and stimulate the use of generation sources other than hydrocarbons and coal. The objective of the regulation is that geothermal generation projects have the same tax benefits as solar or wind initiatives.

To achieve this goal, the Ministry has made progress in the regulation of new technologies that allow the country to move towards carbon neutrality, one of them being geothermal energy, which is why it regulated articles 14, 15, 21 and 23 of the Energy Transition Law.

As announced by former Minister of Mines and Energy, Diego Mesa, “the new regulation includes regulations for the development of activities aimed at generating electricity through geothermal energy. From the beginning of the government we set out to diversify the country’s energy matrix and today we are leaving Colombia with one of the most sustainable energy matrixes in the world”.

On the other hand, the second decree defines the procedure for requesting exploration and exploitation permits and their registration in the geothermal registry, their duration, the activities included in the exploration and exploitation phases of the resource, the information to be reported by the developer, the rules for overlapping projects and their assignment, as well as the sanctioning regime.

The issuance of these regulations will provide legal certainty to investors and promote the development of electricity generation projects with geothermal sources, while increasing knowledge of the Colombian subsoil.

Mesa also mentioned that a technical component associated with a registry will be included that allows locating possible geothermal developments, thinking that there may be “coexistence” in case there is an overlap of these with other types of projects. He also commented that among the benefits there is a 150% over-deduction of investments against income tax, that is, for every million pesos invested in this type of project, USD $1.5 million can be deducted in the income statement, for a period of 15 years. Likewise, a VAT exemption was incorporated for the importation of equipment and other benefits that are enshrined in the Energy Transition Law.  The former Minister added that after promulgating the regulations for geothermal projects, another step will be that of hydrogen initiatives, of which the first pilots are advancing.

It is worth remembering that during Mesa’s time in office, the country managed to inaugurate the first electricity generation projects through the use of geothermal energy (located in Casanare).

Where does Colombia stand today?

On August 5 2022, the Colombian Congress issued Resolution 40302, which defines the technical regulations applicable to obtaining permits for the exploration and exploitation of geothermal resources for electricity generation (the permits), as well as the regulation of the Geothermal Register, regulated by Decree 1318 of 2022.

As summarized by Holland & Knight, the main aspects regulated are the following:

Term of the projects: permits for the exploration stage will be granted for a term of 5 years, extendable for 3 more. Exploitation permits will be granted for 30 years, extendable for a further 30 years.

Overlapping and co-production: the Resolution, regulates the overlapping of geothermal projects and limits the possibility of obtaining permits in hydrocarbon project development areas to the holder of the corresponding hydrocarbon area holder, unless there is express consent from the hydrocarbon holder if it is a third party. It also regulates the procedure for the holders of hydrocarbon contracts to apply for permits and their special conditions.

Technical requirements: technical guidelines are established for the design of wells, the planning of drilling activities, the selection of equipment and instruments to be used, among other technical aspects.

Sanctioning regime: it establishes the sanctions to which developers who fail to comply with permit conditions may be exposed (warnings, suspension of activities, fines and suspension and/or cancellation of permits), the grounds on which such sanctions may be imposed and the sanctioning procedure.

Environmental issues: according to the Resolution, the developer will have the obligation to submit to the Ministry of Mines and Energy the order of initiation of the environmental licensing process within 1 year of obtaining the permits.

Transitional regime: for existing projects, a period of 30 days from the issuance of the Resolution is established for the owners to inform the Ministry of Mines and Energy of the site on which they wish to obtain the permit, and a period of one year is granted for the permit application, during which time no applications will be accepted from any other developer on the same site, and the current developer will be allowed to continue to carry out activities.

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