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El Salvador Country Update

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El Salvador Country Update Proceedings World Geothermal Congress 2005 Antalya, Turkey, 24-29 April 2005 El Salvador Country Update José Antonio Rodríguez and Ada Herrera LaGeo S.A. de C.V., 15 Av. Sur, Colonia Utila, Santa Tecla, El Salvador [email protected], [email protected] Keywords: El Salvador, geothermal development, heat sources are the magma chambers, the structures are electricity market reform, new developments, Ahuachapán, calderas or grabens associated to volcanic activity (mostly Berlín, San Vicente, Chinameca, Obrajuelo. quaternary, but some tertiary), and the reservoirs are formed by infiltration of rainwater into the high part of the volcanic ABSTRACT craters. El Salvador, a country of 6.5 million inhabitants in the heart Temperatures of geothermal resources are 230°C in of Central America, is one of the most densely populated in Ahuachapán, 300°C in Berlín, 250°C in San Vicente, and the Western Hemisphere. Geothermal has been one of the ° main sources of electricity since the mid-1970’s, when there are several resources below 200 C all along the Ahuachapán power plant came on line. Today the country volcanic chain. Depths range from as little as 800m in the has a competitive electricity market, and geothermal shallow areas of Ahuachapán, to about 2800m in the deep sources provide 22% of the electricity needs. parts of Berlín. 1. INTRODUCTION 2. A “STRATEGIC PARTNER” SELECTED FOR GEOTHERMAL The main use for geothermal energy in El Salvador is power generation. There is some potential for direct use to LaGeo, S.A. de C.V. (formerly called Geotérmica dry grains and fruit, but none are as yet a significant Salvadoreña) was separated from the government electric economic activity. Geothermal power, on the other hand, utility company, CEL, in November, 1999, and received the has competed successfully in the local and regional markets geothermal assets in Ahuachapán and Berlín in ownership. for the last few years, and in fact geothermal generation has LaGeo´s shares were still 100% owned by CEL at this time. increased from 400 GWh in 1995 to 966 GWh in 2003. In 2001, a process began to select a strategic partner for There are two geothermal fields in El Salvador that have LaGeo that would invest in geothermal -wells, studies, operating power plants: Ahuachapán and Berlín, both power plants- then capitalise the assets in exchange for new owned and operated by LaGeo, a spinoff privatised shares. In June, 2002, Enel Green Power, a subsidiary of company of the government electric utility, CEL, now Enel S.p.A., of Italy, signed on as LaGeo´s new strategic jointly owned by both CEL and Enel Green Power, of Italy. partner. Enel´s obligations are to develop two projects: Their combined installed capacity is 151 MW. Work is Berlín Third Condensing Unit, and Cuyanausul, both currently under way to upgrade and expand both facilities, described later in this paper. plus there are exploration and resource evaluation projects The process followed has been called “capitalisation with in at least four other fields: Cuyanausul, San Vicente, risk”, where the strategic partner evaluates the resource, Chinameca, and Obrajuelo. The new projects would drills wells, constructs a power plant, then transfers increase geothermal generation to 1350 GWh in 2006, or ownership to LaGeo in exchange for a new emission of about 27% of the projected demand. shares. The amount of shares received for the new assets is not a function of the dollar amount invested, but rather a function of the effective power contributed (within certain A L H O quality standards), and hence the development risk is on the A N M D E U T SANTA R A side of the strategic partner, who is thus incentivated to be A ANA S U AHUACHAPAN-CHIPILAPA LEMPA G GEOTHERMAL FIELD efficient. R RIVE CUYANAUSUL SAN AHUACHAPAN SALVADOR 3. AHUACHAPÁN GEOTHERMAL FIELD BERLIN SAN VICENTE GEOTHERMAL FIELD The first exploratory well was drilled in Ahuachapán in SAN MIGUEL 1968, under the auspices of the United Nations, and CHINAMECA generation began in 1975. There are three condensing units USULUTAN Geothermal Fields PAC IFIC O installed in Ahuachapán: two 30 MW single-flash units, Under Studies CEAN Main Volcanoes and one 35 MW double-flash unit. Reservoir pressure Geothermal Power Plant dropped significantly during the first years of operation, so normally only one single flash unit runs with the double flash unit, and the other single flash unit is kept on standby. Fig. 1 – Map of El Salvador The separated water from the field was dumped into the The source of geothermal potential in El Salvador is the ocean via a 71-km long canal, from the beginning of subduction of the Cocos Plate under the Caribbean Plate, as operations until May, 2004. In December, 1999, a part of the “ring of fire” around the pacific rim. The reinjection pipeline was built to the nearby Chipilapa area, a subduction zone causes a volcanic chain that trends WNW subfield of Ahuachapán 6 km. away, and about 70% of the – ESE through the middle of the country. Areas of water was reinjected, and the other 30% was still dumped geothermal potential are found around the volcanoes: the into the canal. In May, 2004, a pumping system was 1 Rodríguez and Herrera installed just outside the flash vessels, so all of the brine is 7. LOCAL AND REGIONAL MARKETS now injected into Chipilapa. The connection between the The local Salvadorean electricity market was liberalised in Ahuachapán and Chipilapa reservoirs has been evaluated, 1998. Distribution was sold to foreign investors, as was and numerical models predict that Ahuachapán will receive thermal generation. The system operation was separated pressure support from the reinjection, which in turn would from CEL and given to a private entity, the Unidad de lead to an increase in production. Studies are currently Transacciones S.A. de C.V., or UT, whose shares are under way to upgrade Unit 2 to make the most efficient use owned by a “club” of market participants. The transmission of the increase in production, and generate another 10 - 15 company was spun off from CEL, as was the geothermal MW (approx.) in the condensing units. generation. Furthermore, since the speed of the fluid in the injection The Wholesale Market has two components: the Contracts system can be controlled to prevent silica deposition, the Market (MC), and the System Regulating Market (MRS) or reinjection system was designed so that a bottoming binary spot market. cycle plant could be installed between the flash vessels and the injection pumps, thus making use of residual heat in the To participate in any phase of the MC, valid contracts are brine. A 4.5 MW binary plant is scheduled for Ahuachapán necessary. Contracts are not necessary to participate in the by late 2005. spot market. 4. BERLÍN GEOTHERMAL FIELD Charges for use of the transmission system are determined Exploration work in Berlín dates back to the early 1970´s, by the UT based upon the costs of investment, operation but the field was essentially abandoned from 1980 to 1992, and maintenance associated with each component of the during the civil conflict in El Salvador. In 1992, a 2 X 5 system. MW wellhead power plant was installed, which was Dispatch is based on bid price, not variable cost, as in most operated until 1999, when it was replaced by a 2 X 28 MW other Central American countries. Geothermal then must single-flash condensing facility. The wellhead units were compete with thermal generators, hydro, and imports for the decommissioned and sold in 2004. baseload share of the market. In El Salvador, the price bid As part of the obligations of the Strategic Partner, Enel by the geothermal generator (LaGeo) has been historically Green Power has drilled confirmation wells and performed the lowest of all, so all of the available geothermal power a feasibility study to install a third condensing unit of 40 has been dispatched first. Contracts with distribution MW in Berlín. Permitting and preliminary construction for companies and end users are typically of short duration (1 this new addition is currently under way. year), and referenced to the spot market price, so they are simply designed to ensure dispatch, not price. As further study was performed on the Berlín geothermal fluid, it was estimated that a bottoming cycle binary plant Peak demand in El Salvador is 830 MW, yearly demand is could be added to extract residual heat and generate an 4,400 GWh, both with a growth rate around 5%/year. additional 5.5 MW from the separated water. This binary Geothermal accounts for 22% of the total electricity cycle plant is scheduled for Berlín by late 2005, together injected into the national grid, but since 9% of the energy is with the Ahuachapán binary development. imported, the geothermal share of local injections is actually 24%. 5. CUYANAUSUL GEOTHERMAL PROJECT Annual Demand Exploration work in the Ahuachapán-Chipilapa field Annual Generation concluded that there was potential for further growth to the % of total injections East of Chipilapa, in an area called Cuyanausul. 6,000.00 35% Development of this field was included as a requirement for 5,000.00 30% 25% the strategic partner in the process described in Section 2 of 4,000.00 20% this paper. 3,000.00 15% GWh 2,000.00 As of this writing, the access road and a well pad for two 10% exploratory wells were constructed in Cuyanausul, and 1,000.00 5% drilling was scheduled to begin in July, 2004. If drilling - 0% results confirm the field´s potential, one or two 5 MW 1999 2001 2003 2005 2007 backpressure units would be installed while a condensing development is planned.
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