AGM calls for geothermal incentive from O&G industry in Mexico

Los Azufres III, Phase 1 (Unit 17) geothermal power plant, Mexico (source: ThinkGeoEnergy, creative commons)

The Mexican Geothermal Association (AGM) has made an appeal for financial incentives for Mexico’s geothermal sector, mainly to come from a proposed “decarbonization bond” from the oil industry.

The appeal was made by Heber Didier Diez Leon, President of the AGM. “Since geothermal requires financial incentives for its exploration and development, these can come from the oil industry and income of our country, since I consider that Petróleos Mexicanos and the oil industry in general could pay a decarbonization bonus that encourages exploration and geothermal drilling.”

Heber Diez further stated that the geothermal industry in Mexico can sustain and grow by drilling only a fraction of the number of the wells being drilled by the oil industry. “In terms of the production of geothermal fluids for electricity purposes, to maintain the geothermal fields, let us assume that around 15 wells must be drilled. If we sought to explore most of the fields with which we can potentially add new energy geothermal, perhaps another 17 exploratory wells will be required and thus determine the viability, after in-depth analysis of the corresponding conceptual models”

In contrast, the state-owned Petróleos Mexicanos (Pemex) drilled a total of 199 wells in 2022, and 358 wells in 2023. Heber Diez went on to say that the investment requirement of geothermal represents a slight fraction of what is spent for the oil industry.

The AGM President emphasized that the exploration and deployment of geothermal power technologies may be expensive at the onset, but these are compensated enough when the facilities are operational. Geothermal power plants have a higher capacity factor, even compared to gas plants, and can operate regardless of time of day and weather conditions. Despite these benefits, geothermal only represents 1.12% of the energy mix of Mexico.

Mexico currently has an installed geothermal power capacity of 976 MWe, ranking 8th in the world.

On May 23 and 24, 2024, the AGM will be hosting the XXX Annual Geothermal Congress in Michoacan. Registration for the congress is open. More information on the event is available on the recently published 1st circular.

Source: Energia A Debate and BNAmericas