Mexico considering dedicated price support mechanism for geothermal

Avenida de la Reforma, Mexico City, Mexico (source: flickr/ Enrique Dans, creative commons)
Alexander Richter 26 Jun 2018

With current and past auction systems favouring intermittent resources, Mexico is now considering a dedicated pricing support mechanism that would help geothermal succeed in upcoming renewable energy auctions.

Indicated in a recent webinar as part of the upcoming GEOLAC geothermal conference, a new price mechanism specifically tailored towards geothermal is being considered for Mexico.

As reported by ReNews, Mexico is considering a dedicated price support mechanism for geothermal energy outside its technology-neutral auctions dominated by wind and solar, as early as next year.

Under current tender schemes, geothermal essentially could not compete on the low pricing of intermittent sources such as wind and solar, a fact widely complained about by the industry. The auction system so far has not provided any value to geothermal energy and its baseload capacity offered to the market.

Mexican energy ministry SENER’s European representative Nelson Mojarro said “We understand it is more challenging for certain technologies and we are considering whether there needs to be another auction for other technologies specifically to boost geothermal,” he added.

The fourth Mexican renewables auction process for around 2,000 MW in capacity is currently being held with sealed bides and results expected to be announced in November this year. The next auction could then take place in 2019.


Source: ReNews