Mexico will see a boost of private investments into electricity sector

Mexico will see a boost of private investments into electricity sector Avenida de la Reforma, Mexico City, Mexico (source: flickr/ Enrique Dans, creative commons)
Alexander Richter 7 Sep 2015

With concessions to be given to private players in an upcoming geothermal tender for 13 areas, a surge in private investments into geothermal development in Mexico is expected.

Following the geothermal round zero in Mexico, which essentially determines which unexploited geothermal sites will be developed by state utility CFE and which will be awarded to the private sector in a later tender, essentially provides a positive outlook for private investment. This is reported by a new study from Mexico.

The Mexican government has only tendered out a small part of the geothermal resources of the country to CFE and encourages public-private partnerships for development. At the same time it will also strengthen opportunities for independent power producers (IPPs).

Earlier this summer, the Mexican Ministry of Energy awarded five geothermal concessions to CFE. These include sites in fields already being utilised, such as: Cerro Prieto, in Baja California; Los Azufres, in Michoacan; Los Humeros, in Puebla; Tres Virgenes, in Baja California Sur, but also Cerritos Colorados in Jalisco, one site currently unexploited.

As part of this round CFE also received 13 exploration permits for sites in Baja California, Nayarit, Guanajuato, Puebla, Chiapas and Jalisco y Michoacan.

The next round of tenders for concessions on some of the largest unexploited geothermal resources in Mexico, was supposed to be held in August. There is though so far no news on any possible outcome. The overall power generation of these concessions open for IPPs is estimated at around 5,700 MWe.

With the current regulatory environment, supporting financing schemes and risk insurance scheme, there will be a large interest.

In October 2015 I will attend an event organized by the Mexican Geothermal Association and hopefully will then be able to provide a few more details.

Source: Latin America Monitor