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Grupo Dragon obtains 1st private geothermal concession in Mexico

Grupo Dragon obtains 1st private geothermal concession in Mexico Avenida de la Reforma, Mexico City, Mexico (source: flickr/ Enrique Dans, creative commons)
Francisco Rojas 4 Nov 2015

For the first time, the government of Mexico gives a concession to a private company (Dragon Group) for the use of geothermal energy in the country.

News from Mexico yesterday mark a historical breakthrough where the National Water Commission (Conagua) in the country handed over a 30-year concession to a private company for the use and exploitation of geothermal resources in Mexico. Dragon Group, through its subsidiary for the project, Geothermal Energy Development (Geodesa), which is a subsidiary of Grupo Salinas has been authorized to produce up to 52 MW for a project in San Pedro Lagunillas, Nayarit and drill up to 18 wells between 3000-3500 meters in depth.

For the newspaper El Economista, Jose Pablo Fernandez, CEO of Dragon Group said the company will be exempt from paying water rights because “they will reinject up to 84% of the 43.8 million cubic meters of water to be used annually” making the company liable to pay only for the transmission of power to the grid and other necessary permits at regional and national level, making it very cost effective.

“Since we are reinjecting water, which does not serve for human consumption, we are not considered as a user the resource (water) for now this is and hopefully will remain so,” said Jose Pablo Fernandez during an event at the Energy Department.

The project will require an estimated investment of 2,600 million pesos (US $ 160 million) according to the Energy Secretary Pedro Joaquin Coldwell, and it will be divided into 2 stages of 25 MW regarding project development.

The new plant is expected to generate renewable base load electricity for the region, which is in great of cheap power, while at the same time generating 650 direct jobs, according to La Crónica de Hoy.

Sources: El Economista, El Financiero, La Crónica de Hoy