Mexico's geothermal Round Zero slated for Q1

Thursday, January 22, 2015

Mexico will launch its geothermal 'Round Zero' in the first quarter to determine which projects will be developed by state utility CFE and which ones will be tendered out to the private sector.

Luis Carlos Gutiérrez Negrín, president of the Mexican geothermal association (AGM), was quoted by local media as saying that the sector will grow 40% by 2020 to surpass 1,400MW through US$1.6bn in investments.

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The AGM had previously said that Round Zero would be carried out in January.

In 2014, 958mn pesos (US$65.5mn) were authorized by the CFE for the development of geothermal projects over the following four years. Only about 14% of the funds have been used, mainly in Michoacán state.

The CFE will soon put the 50MW Los Azufres III geothermal plant in Michoacán into operation, Gutiérrez Negrín was quoted by La Razón newspaper as saying.

Ten firms are currently engaged in geothermal projects in Michoacán, a state with the potential to develop around 30 projects, according to the Cemie-Geo renewable energy innovation center, which was was created as part of the country's energy reforms.

Private firms from the US and Iceland have expressed an interest in developing geothermal projects in Mexico, Gutiérrez Negrín said.

Mexxus Drillng International and Grupo Dragón are currently developing two geothermal projects in the northwestern state of Nayarit.

In December, the Inter-American Development Bank (IDB) awarded Mexico a grant to finance consultancy services from geothermal expert firms for the selection and evaluation of specific geothermal projects.

The funds and risk transfer program will finance technical and financial-economic feasibility assessments and technical evaluations of drilling via on-site well testing and measurements, the IDB said.

Mexico currently has three geothermal power stations in operation: Los Humeros, in Puebla state; Cerro Prieto (Baja California), which is Latin America's largest, and Las Tres Vírgenes (Baja California Sur).