Geothermal Energy in Mexico

Jorge Sayon

WE 3315

Policy Article 2

With Mexico implicating their new Energy Law, renewable energy will become the main focus of electrical generation. Mexico has an abundance of renewable energy sources they can generate from, with geothermal being one of the largest energy sectors available. Geothermal energy has always been a viable option based on the country’s location. Mexico has always been located on very active terrain for geothermal energy. They can also use their country’s size to benefit from all geothermal activity present. The country’s interest with geothermal can be dated back to the 1930s. With the government reforming the energy laws, the potential for geothermal energy can vastly grow. Which will allow Mexico to become more dependent of renewable energies instead of their current dependence on oil.

Figure 1: Geothermal Electricity Plants in Mexico

The Comisión Federal de Electricidad (CFE) has always been in charge of the geothermal projects that Mexico has developed and operated. “CFE has scored a number of achievements in developing Mexico’s geothermal potential, including bringing online the Los Azufres (1982), Los Humeros (1990) and Las Tres Vírgenes (2001) geothermal fields. Mexico’s geothermal- electric capacity grew from 37.5 MW to 853 MW during the period a figure that jumped to 953 MW when the 100-MW Los Azufres II was commissioned in the summer of 2003” (1). These are only a few of the geothermal sites that Mexico has operating and running, there are plenty of future potential sites in planning by the CFE. Mexico sits on land that is very active in the volcanic activity. They can utilize this source of energy to greatly help develop future sites throughout the country. Los Humeros II, Los Azufres II, and Los Humeros III are all potential sites that could be developed by 2015. “By 2015 the new geothermal projects would amount 150 MW, with 90 MW of net additional capacity” (2). These geothermal sites would help diversify the energy generation through out the energy sector. With the new Energy Law in place the number of sites have a greater chance of increasing than in previous years. The potential for geothermal will continue to grow as the country develops more electrical needs. These future sites will help develop and grow the renewable energy portfolio for Mexico.

Even though Mexico has been making strives in geothermal energy, the sector has not been able to reach it full potential. Previous law has always strictly regulated the geothermal energy sector and its potential to grow. The CFE was the main controller of all energy sectors in Mexico; this allowed the market to be regulated by the government exclusively. But with the current electrical reform the CFE is no longer in control of the energy market in Mexico. “The Department of Energy (Secretaría de Energía or the SENER) will have the policy function; the CRE will have the regulatory function; and the CENACE, a new decentralized agency, will manage the power grid and the wholesale electric market” (3). SENER can now regulate what projects can be taken into consideration, and see if these projects will one day become a reality. “SENER will launch the geothermal ‘round zero’ during the current quarter to determine which projects will be developed by the CFE and which ones will be tendered to the private sector” (4)”. The ‘round zero’ is a set of regulations that the new Energy law has put into place of all forms of energy generation. It also highlights some of the limitations that have been restricted to each energy sector, and it also has potential future projects that may be developed. These projects can now be organized and constructed by private companies, which will broaden the energy market as a whole.

Figure 2: Total Electric Installed Capacity in Mexico Sept 2009

In the past years Mexico has not been able to financially support the development of geothermal sites. It has always mainly focused on oil and gas as their primary source of energy generation. Since these methods are the cheapest and most developed, Mexico has put in most of its money into PEMEX. PEMEX is the major controller of oil and gas in Mexico, and they dictate how energy is produced. Just like any form of electrical generation, geothermal energy has always had a difficult financial aspect for the Mexican government. “Mexico’s geothermal development has been slow in the past because it is a capital intensive energy source and the CFE has not been able to allocate funds to the sector, but this will change with the energy reform” (4). But with support of the new Energy Law, geothermal can now have chance to grow. This will allow the expansion of private companies to begin their own geothermal sites. Since private companies will fund these sites, there will be no financial stress on government. This will allow for more geothermal sites to be added to energy market relieving some of the energy demand on oil and gas. The private sectors can now supply energy to the grid, which will allow them to supply energy into the market and increase the energy portfolio. With this extra energy in the market the supply of energy may be able to meet the future demand of energy for the country.

Like most countries Mexico is increasing in population and needs a solution for energy demand. The solution also needs to help relieve some of the pollution problems that the country suffers from. Mexico’s renewable energy potential seems to grow as the years go by. A country that was once regulated only by the government is starting to broaden their view on energy generation. Not only will this benefit their energy portfolio, but also it can help invest into the future of the country. If the dependence of oil and gas goes down, the amount of money being used in oil and gas can be used elsewhere. They can invest this money into many geothermal sites; since there is an abundance of geothermal resource it would benefit the country as a whole. No matter what direction the Mexican government takes, the potential for renewable energy will continue to increase once their benefits are seen.

Works Cited

(1) Quijano-Leon, Jose Luis, and Luis C.A. Gutierrez-Negrin. Mexican Geothermal Development An Unfinished Story 30 Years Of Geothermal-Electric Generation In Mexico. 1st ed. Morelia: Comision Feredal de Electricidad, 2003. Web. 12 Apr. 2015.

(2) Flores-Armenta, Magalay, and Luis C.A. Gutierrez-Negrin. Geothermal Activity And Development In Mexico. 1st ed. Morelia: Comision Federal de Electricidad, 2010. Web. 12 Apr. 2015.

(3) Mayer Brown. Analysis of Mexico’s New Electical Industry Law. Illinois: Mayer Brown, 2014. PDF.

(4) Critchley, Adam. ‘Mexico’s Reform To Boost Geothermal Potential — Bnamericas’. BNamericas. N.p., 2015. Web. 12 Apr. 2015.

Figures

Figure 1: Geni.org,. ‘Energy Overview Of Mexico’. N.p., 2015. Web. 12 Apr. 2015.

Figure 2: Flores-Armenta, Magalay, and Luis C.A. Gutierrez-Negrin. Geothermal Activity And Development In Mexico. 1st ed. Morelia: Comision Federal de Electricidad, 2010. Web. 12 Apr. 2015.

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