Nicaragua Seeks Bids on
Energy From Largest
Volcano
By Eric Sabo, Bloomberg
Nicaragua plans to open
its largest volcano to
geothermal exploration
as record oil prices
force the government to
seek new sources of
energy.
Concessions to extract
energy from the San
Cristobal Volcano, which
has the largest energy
potential of the
country's 12 geothermal
sites, will be put up
for bid, Nicaragua's
Energy Ministry said.
The government will
consider offers of least
$30,000 made before July
31, according to a
statement posted on the
Energy Ministry Web site
today.
Energy Minister Emilio
Rappacioli told national
lawmakers this month
that the government is
working on plans to
switch to entirely
alternative energy
within five years. The
plan aims to tap
hydroelectric and
geothermal reserves that
may produce an estimated
3,000 megawatts of power
a day.
"There's a lot of
potential,'' said
Heather Berkman, a Latin
American analyst with
the Eurasia Group. ``The
problem is that
investors are hesitant
to put money on the
ground because there's
so much political
uncertainty.''
President Daniel Ortega,
who had promised to end
Nicaragua's energy
crisis with discount
Venezuela oil, said on
June 14 that the country
aims to phase out
fuel-based power plants
in favor of alternative
energy.
About 80 percent of
Nicaragua's electricity
is supplied by
fuel-burning power
plants. The country has
suffered 4-hour-a day
blackouts since oil
soared to record prices
in May.
The National Assembly
passed a law this month
that grants increased
tax incentives and a
higher tariff that
companies can charge to
produce geothermal
energy.
The San Cristobal
volcano, with 225
megawatts of potential,
could power half of
Nicaragua' energy needs,
according to the Energy
Ministry.
Reno, Nevada-based Ormat
Technologies Inc. runs
the country's Momotombo
power plant. Canada's
Polaris Geothermal
controls the San
Jacinto-Tizate
geothermal power
concession.
Crude oil traded in New
York climbed to its most
recent record of $139.89
a barrel on June 16.
Prices are 93 percent
higher than a year
earlier.
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