Mexico depending on IPPs for geothermal growth
Los Azufres geothermal power plant, Mexico (source: Alstom)
Alexander Richter
12 Jun 2013
With a potential of around 8,500 MW of additional geothermal power generation capacity, Mexico will have to rely on IPPs for investment and will compete with Chile and Peru to attract investments.
Mexico has been creating geothermal power for now over 30 years and the market has been dominated through investments by the Federal Electricity Commission (CFE), the public utility of Mexico.
To further grow the geothermal market beyond 2015, the market depends though on involvement by independent power producers (IPPs), so a recent report released by Frost & Sullivan.
The market has seen an investment of $182 million in 2012 and is expected to reach a level of $200 million in 2017.
The market features a number of proven reserves and with a growing energy market, geothermal energy is a valid and interesting option for Mexico with “robust investment opportunities”, so Frost & Sullivan.
Investments made in 2012 will be channeled toward incoming projects listed in the exhibit for SENER-commissioned geothermal projects. The country’s energy plan is tilted in favor of wind power and combined cycle power more than geothermal power. While combined installed capacity of cycle and wind power is expected to register a compound annual growth rate (CAGR) of 4.6 percent and 7.9 percent, respectively, between 2012 and 2025, geothermal’s installed capacity is likely to grow at a CAGR of 2.8 percent.
Mexican geothermal sites located on the San Andreas Fault include thermal reservoirs with estimated power generation potential of around 10,640 MW, of which 8,621 MW is available for electricity generation and 983 MW is being tapped.
The mature geothermal power generation market is vulnerable to changes in other Latin America markets; it will be relying on the ability of Chile and Peru to attract investments from European and North American IPPs. Therefore, Mexico has to target venture capitalists and companies willing to invest in high-risk greenfield projects.”
Source: Release by Frost & Sullivan via PR Newswire
