Proposals filed for Mexican Geothermal Financial Program (PGM)

Yesterday, June 15th at noon local time, the leading Mexican geothermal developers presented their proposals to participate in the long-awaited PGM, managed by the National Institute of Electricity and Clean Energies (INEEL), who shall evaluate the technical and economic specifications of the proposals.

The Bidding process, initially launched in 2018, was resumed earlier this year, after being declared void in September 2019, leaving a panorama of skepticism among the sector. Fortunately, the hard work of INEEL, Nacional Financiera (NAFIN) and the Inter-American Development Bank (IDB) generated the needed inertia to keep the PGM on the national agenda and make it a reality.

The proposal reception was carried out by Georgina Izquierdo, General Director of INEEL and by Alfonso Aragón, Geothermal Manager, who reviewed the general content of each of the proposals at a public event throughout Zoom, before admitting them.

The participation and enthusiasm for the financial risk mitigation mechanism in the exploratory stage of geothermal energy in Mexico were overwhelming. Proposals were received from major players in the sector in the country, in the following areas:

• By the Federal Electricity Commission, to:
  • The San Marcos exploration area in Jalisco;
  • The Los Negritos exploration area in Michoacán; and
  • The expansion of Las Tres Vírgenes geothermal field in Baja California Sur.
• By Grupo Dragón, a subsidiary of Grupo Salinas, for the expansion of the geothermal field Domo de San Pedro in Nayarit.
• By Grupo Carso, for the geothermal areas Airport II in Baja California, and Celaya in Guanajuato.
• By Mexxus RG, for El Ocotillo geothermal area in Nayarit.
• By Storengy, for Las Derrumbadas geothermal area in Puebla.

The term to award the winners of the PGM is projected for next August 21st, and the beginning of the drilling is expected by the end of 2020, after negotiation and execution of the agreements. A task that is easier said than done, but which will undoubtedly involve new challenges.

The submission of these proposals confirms the enormous interest of the geothermal industry in Mexico and its high potential, despite the complicated panorama the energy sector in Mexico faces, notably aggravated by the current health emergency caused by the SARS-CoV-2 pandemic.

It is also a sign of the continuous effort and commitment of the main public and private, national and international cooperation actors to promote Mexican geothermal energy and is a clear, and necessary, example that, with political will and work aiming to a clear goal, beneficial things can be achieved for everyone, the Country in first place.

We thank Michelle Ramírez Bueno, technical advisor at GIZ Energy Program in Mexico for the information. She has been instrumental in getting this program off the ground with the partners to the program and we happy to see things moving again in Mexico.