El Salvador

El Salvador, a country with immense geothermal energy potential, seeks to tap the energy source for its needs and reduce its dependence on fossil fuels to ensure a sustainable future. This piece will focus on the government’s ambition and strategy for upcoming geothermal energy projects, top operators in the sector and challenges hindering growth.

Ambition & Strategy:

Renewable energy accounts for 78 per cent of El Salvador’s electricity market, out of which geothermal energy accounts for 25 per cent. The El Salvador government has plans to expand geothermal energy capacity from 204 Megawatt as of February 2022 to 300 Megawatt in the coming years through new projects and expansion of current power plants.

The country holds a significant resource potential of 644 Megawatts, with only one-third currently utilized.

Key Projects:

  • San Vicente geothermal powerplant is in San Vicente, and it is to be owned and operated by LaGeo while InterEnergy will develop the project. Presently at the pre-construction stage and planned to be commissioned in 2025 with a 10-megawatt capacity. It will be expanded in 2026, increasing the capacity by 17 Megawatt.
  • Chinameca geothermal powerplant is to be owned and operated by LaGeo, and InterEnergy will develop the project. Presently at the pre-construction stage and planned to be commissioned in 2025 with a 20-megawatt capacity. It will be expanded in 2026, increasing the capacity by 17 Megawatt.
  • Volcán de Conchagua geothermal power plant is in Conchagua, to be owned and operated by LaGeo. It is to be constructed soon with a 30-megawatt capacity.

Top Operators:

  • Comision Ejecutiva Hidroelectrica del Rio Lempa, headquartered in San Salvador, was founded in 1954. A government entity is responsible for generating electricity from renewable energy sources such as geothermal energy and hydropower.
  • LaGeo, headquartered in Santa Tecla, was founded in 2006. It is a public-private partnership between the Italian company Enel Green Power and the Salvadoran government.


  • The biggest obstacle to increasing geothermal energy capacity is the lack of a regulatory framework. For example, while geothermal energy can serve heating purposes, existing regulations solely address its utilization for power generation.
  • The second issue is the struggle for developers to access funding to develop geothermal energy projects. The government needs to enhance the capabilities of financial institutions and project owners to scale this energy source.
  • The third hindrance is the remuneration scheme, which makes it challenging for geothermal energy developers to secure long-term energy purchase contracts. It needs to be resolved by the government to increase share in the energy matrix.


El Salvador is poised to harness its geothermal energy potential for a sustainable future. With ambitious plans to expand capacity and the key projects underway, including San Vicente and Chinameca, the nation aims to reduce reliance on fossil fuels. Challenges like regulatory frameworks, funding access, and remuneration schemes need addressing. Overcoming these hurdles will unlock geothermal potential and enhance energy security and environmental sustainability. Through strategic partnerships and policy reforms, El Salvador can lead the region in clean energy innovation, setting a compelling example for a greener future.

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