2016 Mexico Country Report

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1 2016 Mexico Country Report José M. Romo-Jones Magaly Flores-Armenta Alfonso García Luis C. Gutiérrez-Negrín Juan Luis del Valle April 2017

2 Disclaimer IEA Geothermal do not warrant the validity of any information or the views and findings expressed by the authors in this report. Neither IEA Geothermal (IEA-GIA) nor IEA shall be held liable, in any way, for use of, or reliance on, any information contained in this report. José M. Romo-Jones 1, Luis C. Gutiérrez-Negrín 2, Magaly Flores- Armenta 3, Juan Luis del Valle 4, Alfonso García México Country Report, IEA Geothermal, April CICESE - CeMIE-Geo, jromo@cicese.mx 2 Geoconsul, S.A. de C.V. - CeMIE-Geo, l.g.negrin@gmail.com 3 Gerencia de Proyectos Geotermoeléctricos, CFE Generación VI, magaly.flores@cfe.gob.mx 4 Grupo Dragón, jdelvalle@gdragon.com.mx 5 CeMIEGeo-UNAM, agarcia@cemiegeo.org

3 1. Introduction Large hydro, geothermal, and wind are the most important renewable energy sources utilized in Mexico. They represented 24.6% of the electric installed capacity for the wholesale electric market in Mexico in 2016, which was 55,560 MW. This excludes the installed capacity for selfsupplying, co-generation, export and other private projects, which adds another estimated ~13,363 MW. Thus, the total installed electric capacity in Mexico in 2016 was around 68,923 MW, or ~1.3% higher than in The geothermal-electric installed capacity in 2016 was MW, and the operational or running capacity was MW. This running geothermal electric capacity represents around 1.30% of the total in the country (Table 1). Table 1. Status of geothermal energy use for electric power generation and direct uses in Mexico in Electricity Direct uses Total Installed Capacity (MW e) Total Installed Capacity (MW th) New Installed Capacity (MW e) 25.5 New Installed Capacity (MW th) 0 Total Running Capacity (MW e) Total Heat Used (GWh/yr) 1,158.6 Contribution to National Capacity (%) 1.30* Total Installed Capacity Heat Pumps (MW th) 0 Total Generation (GWh) * Total Net Heat Pump Use [GWh/yr] 0 Contribution to National Generation (%) 1.96* Target (PJ/yr) N/A Target (MW e or % national generation) Not set a Estimated Country Potential (MW th) 40,589 *,c Estimated Country Potential (MW e ) 2310 b * Indicates estimated values. a) There is no specific target set for geothermal energy. A target of 35% of total installed power generation capacity is set for clean sources by Clean sources are defined by law as those producing little or no greenhouse gas emissions to the atmosphere, and they include geothermal energy. b) Estimated potential from conventional hydrothermal resources with temperatures > 150 C. Of these, 125 MWe correspond to proven reserves, 245 MWe to probable reserves, 75 MWe to measured, 655 MWe to indicated, and 1210 MWe to inferred resources. From Gutiérrez-Negrín, L.C.A. (2012). c) 0.1 % of recoverable resources using a world average load factor of 0.27, based on Iglesias et al., 2015, for resources between 36 C and 208 C. Final figures about generation of electric energy in the country during 2016 are still not available. What it is already available is the generation for the wholesale electric market, which was 263,152.8 GWh. However, estimated generation by self-suppliers, co-generators, exporters and other private producers in 2016 was around 48,800 GWh, and thus a total estimation for 2016 in Mexico is ~311,953 GWh. With this estimate, geothermal energy contributed ~1.96% to the electric generation in the country (Table 1). 1 This amount is composed of the generation by the CFE s fields ( GWh) and generation by the Domo San Pedro field, which is an estimate. It will be updated when this info becomes available. 1

4 Geothermal resources in Mexico are used practically only to generate electric energy, although there are some scarce direct uses mainly related to balneology. There is no recent data for direct geothermal energy use in Mexico; outdated estimates are for 156 MW th of direct geothermal heat utilization (Table 1). The number of balneology sites utilizing geothermal heat is around 165, distributed in 19 states. Geothermal development for electricity generation started in Mexico in 1959, with the commissioning of the first commercial plant in Pathé field (central Mexico) that was in operation until That year the first geothermal power plants in the Cerro Prieto geothermal field started to operate. During 2016 there were 224 production wells and 44 injection wells, distributed in five geothermal fields currently in operation: Cerro Prieto, Los Azufres, Los Humeros, Las tres Vírgenes and Domo San Pedro (see Table 2). 2. Changes to Policy Supporting Geothermal Development During 2016 there were no changes in the policies related to geothermal energy in Mexico. However, it is worth mentioning that the new independent system operator (ISO) of the wholesale electricity market CENACE (Centro Nacional de Control de Energía), conducted two public auctions for CFE (Comisión Federal de Electricidad) to buy electric power, clean energy certificates (CEL: Certificados de Energías Limpias) and energy, effective by 2018 and The results of the second long-term electricity auction in Mexico included a geothermal power plant of 25 MW net in capacity that was awarded around 190,000 MWh (2.2% of the total), the same amount of CEL per year (2.1% of the total) and 25 MW of capacity power. This is the project Los Azufres III, Phase 2, which is currently under construction by the CFE in the geothermal field of the same name in central Mexico. According to the Secretary of Energy, the average price for the combination of energy and CEL was US$33.47 per megawatt-hour. This average price is 33% lower than the average price obtained in the first auction, held in March 2016, which was around US$50 per MWh + CEL. As for capacity, the average price was US$32,258 per megawatt per year. Like in the first auction, the only buyer of energy, CEL, and capacity, is the CFE through one of its subsidiary companies. But CFE also participated in the offer-side of this auction through other subsidiaries engaged in electric generation, one of which includes its geothermal division. These are legally separated companies. CFE had participated also in the first auction with no success. 3. Geothermal Project Development 3.1 Projects Commissioned (in the reporting year) In May 2016 a new condensing, single flash plant of 25.5 MW started operation in the Domo San Pedro, Nay., geothermal field. It was constructed and installed by Mitsubishi Hitachi Power Systems, contracted by Grupo Dragón, which is the operator and owner of the field. Two backpressure units of 5 MW each operating previously in the field are still installed, but are out of operation since the commissioning of the new 25.5 MW plant. This unit has been operating at 20 MW while more wells are drilled to complete the steam to operate at its full capacity. 2

5 Thus, by the end of December 2016 the installed capacity in the Domo San Pedro field increased to 35.5 MW, and the total in the country reached MW, while the running capacity in the Domo San Pedro field was 25.5 MW and the total in the country was MW, as reported in Table Projects Operational (at the end of the reporting year) As of December 2016, there were five operational geothermal fields in the country. Their main features are as follows (see also Table 2 below): - Cerro Prieto, BC. This field is located in north-western Mexico. It is owned and operated by CFE Generación VI, one of the subsidiaries of the government-owned utility Comisión Federal de Electricidad (CFE). The installed capacity is 570 MW composed of four condensing, flash units of 110 MW each, one condensing, low-pressure unit of 30 MW and four condensing, flash units of 25 MW each. The operational capacity is the same (570 MW). During 2016 there were 150 production and 30 injection wells, on average, operating in this field. - Los Azufres, Mich. The field is located in central Mexico, within the Mexican Volcanic Belt (MVB). It is also owned and operated by CFE Generación VI, and has an installed capacity of MW composed of six condensing, flash units (53.4 MW, 50 MW and four of 26.6 MW each), seven backpressure units of 5 MW each, and two binary cycle units of 1.5 MW each. The operational capacity is MW, since four of the seven backpressure units and the two binary cycle units are currently out of operation. One additional unit of condensing type and 25 MW in capacity (Project Los Azufres III, Phase 2) was under construction in the field and is scheduled to be commissioned in During 2016 there were 44 production and 6 injection wells, on average, operating in this field. - Los Humeros, Pue. This field is located in the central-eastern part of Mexico, also inside the MVB. CFE Generación VI is the owner and operator of the field, which has an installed capacity of 93.6 MW. It is composed of two condensing, flash units of 26.8 MW each, and eight backpressure units of 5 MW each. The running or operational capacity is 68.6 MW, because five of the backpressure units are out of operation and are used only as backup. One additional condensing, flash unit of 25 MW was under construction in Los Humeros, and is programmed to be commissioned in March During 2016, 23 production and 3 injection wells were in operation on average. - Las Tres Vírgenes, BCS. The field is located in the middle of the Baja California Peninsula, in the northern part of the Baja California Sur state, and is also operated and owned by CFE Generación VI. It has only two condensing, flash type power units of 5 MW each in capacity, and its operational capacity is the same (10 MW). One binary cycle plant of 2 MW is planned in the future, to use the abundant production of brine available in the field. In 2016 there were 3 production and 2 injection wells in operation in this field. - Domo San Pedro, Nay. This is the most recent development in Mexico, and is located in central-western Mexico, also inside the MVB. It is owned and operated by Grupo Dragón, and currently has an installed capacity of 35.5 MW. It is composed of one condensing flash power plant of 25.5 MW, and two backpressure units of 5 MW each. The operational capacity is 25.5 MW because the backpressure units have been out of operation since April 2016, when the flash plant was commissioned. During 2016, there were 4 production and 3 injection wells in operation in this field. 3

6 The main data from each field are reported in Table 2. Table 2. Geothermal fields in operation in Mexico in Field Capacity (MW) Owner / Wells in operation Installed In operation Operator Production Injection Cerro Prieto, BC Los Azufres, Mich CFE 44 6 Los Humeros, Pue Generación VI 23 3 Las Tres Vírgenes, BCS Domo San Pedro, Nay Grupo Dragón 4 3 Total Research Highlights In 2016, a bilateral initiative between Mexico and the European Commission granted a collaborative research project to a Mexican consortium with a corresponding consortium from Europe. It is the project GEMex, under the umbrella of the Horizon 2020 initiative of the European Union. The purpose is to investigate two unconventional geothermal cases: a possible EGS system in Acoculco, Pue., and a superhot system in Los Humeros, Pue. Both sites are licensed to CFE, for geothermal exploration and exploitation respectively. The Mexican group is led by the Universidad Michoacana de San Nicolás de Hidalgo, while the GFZ German Research Centre for Geosciences leads the European group. The activities should start during Geothermal applied research is conducted by the consortium CeMIE-Geo (Mexican Center for Innovation in Geothermal Energy) and is focussed in four strategic subjects covered in 32 specific projects (Romo-Jones and Group CeMIE-Geo, 2015): Regional resource assessment (4 projects conducted by UNAM, INEEL and UMSNH) Exploration techniques (9 projects conducted by CICESE, UNAM, UMSNH and UdeG) Technological developments (10 projects conducted by UNAM, INEEL and UMSNH) Direct uses of geothermal heat (7 projects conducted by UPBC, INEEL and UMSNH) Training Programs: graduate/undergraduate programs and short courses (conducted by CICESE, UNAM, UMSNH, INEEL, UPBC and UdeG) Highly Specialized Laboratory System distributed in our academic institutions (backed by UNAM, CICESE, UMSNH, INEEL) CeMIE-Geo is an academic-industry alliance funded by the Mexican Ministry of Energy (SENER) and the National Council for Science and Technology (CONACyT) in Mexico. It consists of 7 academic institutions, 1 public company (CFE) and 17 private companies. It is led by CICESE, an institution funded by CONACYT in 1973 focusing on scientific research and higher education. The general purposes are: To expand and strengthen the capability for scientific and technological research in geothermal energy, promoting collaborative use of infrastructure and expertise. To promote innovation and creation of technology-based companies, strengthening technological development in the geothermal sector. To foster education and training of specialists for academy and industry. 4

7 In 2016 CeMIE-Geo s projects completed 24 months of operation. So far there are several products derived from the activities of these projects, such as 29 refereed research papers, 35 theses (19 undergraduate and 16 graduate), 116 conference presentations, as well as number of maps, data bases and progress reports. 5. Other National Activities 5.1 Geothermal Education Several Mexican universities are offering training in science or engineering in matters relating to geothermal energy. Most of them offer undergraduate programs in geosciences, physics, chemistry, engineering and energy. Specialized graduate programs are available in a few university research institutes or in some research centers funded by CONACyT. The role of CeMIE-Geo in educational matters is to promote the inclusion of geothermal courses in the curricula of undergraduate and graduate programs offered by the academic institutions in the consortium. In addition, they organize short courses taught by international experts. In 2016 they offered one in geophysical exploration by W. Cumming and another in geothermal processes by P. Brown. Finally, a number of students are involved in their project activities, most of them pursuing a degree (BSc., MSc or PhD). 5.2 Conferences In March 2016 the Mexican Geothermal Association (AGM: Asociación Geotérmica Mexicana), held its 23 rd Annual Congress in Morelia City, Michoacán. The congress gathered around 130 people from the geothermal divisions of the CFE and the Instituto de Investigaciones Eléctricas (IIE: Electric Research Institute), as well as from the universities of Mexico (UNAM: National Autonomous University of Mexico) and Michoacán (UMSNH), and other institutions like the Mexican Center for Innovation in Geothermal Energy (CeMIE-Geo: Centro Mexicano de Innovación en Energía Geotérmica), students, the Secretary of Energy (SENER), Lawrence Berkeley National Laboratory (LBNL) and private companies. During the congress, 29 technical papers were presented orally and 11 as posters. There was also a pre-congress, eight-hour workshop on Introduction to Isotopes in Hydrothermal Systems and Introduction to Geothermal Heat Pumps, with 28 attendees. A parallel commercial exhibition during the congress was composed of 12 booths where private companies and public institutions exhibited their products and services. 5.3 Publications The Mexican journal on geothermal energy, Geotermia, published two volumes in 2016: Vol and Vol. 29-2, in January and July, respectively. This is the only journal in Spanish (with abstracts in English) devoted to geothermal energy, and is published every six months by the geothermal division of CFE Generación VI. The journal was founded by the CFE in 1986, and its first number (printed) was issued in January Since 2004 the journal is only published in digital form. Issues from 2004 to 2017 can be accessed and freely downloaded from the websites of the Mexican Geothermal Association (AGM) and the Geothermal Resources Council (GRC): and 5

8 5.4 Useful Websites Asociación Geotérmica Mexicana (in Spanish): Centro de Investigación Científica y de Estudios Superiores de Ensenada (CICESE) (in Spanish): Centro Mexicano de Innovación en energía Geotérmica (CeMIE-Geo) (in Spanish, with parts in English): Comisión Federal de Electricidad (in Spanish): Instituto Nacional de Electricidad y Energías Limpias (INEEL) (in Spanish): Secretaría de Energía (SENER) (in Spanish): 6. Future Activity One condensing power plant of 25 MW is programmed to be commissioned in the first quarter of 2017 in the Los Humeros geothermal field. The remaining three backpressure power units of 5 MW each will be put out of operation, and then the net increase in the installed capacity of the field will be 10 MW. The operational capacity in the field will be around 80 MW, from almost the same amount of steam that currently produces ~69 MW. Another plant of the same capacity is programmed to start commercial operations by the end of It is the above-mentioned project Los Azufres III, Phase 2, which is currently under construction in the field of the same name. Like in Los Humeros, the last three backpressure units in Los Azufres will be put out of operation when the new, more efficient flash unit comes into operation. Thus, the net increase in installed capacity is going to be around 10 MW. In late 2016 it was unveiled that the drilling of the first exploration wells will start at the Ceboruco Geothermal Area. El Ceboruco is a huge stratovolcano located in the Mexican state of Nayarit. The exploration permit in this area was awarded to Mexxus RG, a joint venture between Mexico s Mexxus Drilling International and Iceland s Reykjavik Geothermal, and is now owned by RG. This company plans to install a geothermal power plant up to 30 MW, with an estimated cost of US$115 million. This will be the second privately developed and operated geothermal-electric project in Mexico. In 2016, three new geothermal exploration permits were awarded to the private companies Grupo ENAL and Grupo Dragón, both Mexican companies specializing in the development of geothermal power projects from early phases of development until the installation and operation of geothermal power plants. With these permits, the total areas awarded up to 2016 are 18: 13 for CFE, two for Grupo Dragón, two for Grupo ENAL and one for RG. All of these permits were awarded by the Secretary of Energy under the new Geothermal Energy Law (GEL) that regulates the reconnaissance, exploration and exploitation of geothermal resources in Mexico. According to the GEL, all these exploration permits are valid for three years and can be renewed for another three years. In each case, the awarded company should drill at least one exploration well for every 50 square kilometres of area granted. Regarding direct uses of geothermal heat, CeMIEGeo has six projects under development, dealing with heat pumps for heating and cooling of buildings and greenhouses, food dehydration, 6

9 water desalination, absorption refrigeration, electricity generation using binary cycles, and cascade uses. Several geothermal heat pumps will be installed in 2017 with an approximate capacity of 70 ton (20 kw). 7. References Gutiérrez-Negrín, L.C.A. (2012) Update of the geothermal electric potential in Mexico. Geothermal Resources Council Transactions, Vol. 36, pp Gutiérrez-Negrín, L.C.A. (2016) Mexico: Exploratory Drilling, more Exploration Permits, Second Electricity Auction. IGA News 105, October-December 2016, pp Gutiérrez-Negrín, L.C.A., R. Maya-González and J.L. Quijano-León (2015). Present Situation and Perspectives of Geothermal in Mexico. Proceedings World Geothermal Congress 2015, Melbourne, Australia, April Iglesias, E.R. et.al. (2015) Summary of the 2014 Assessment of Medium- to Low-Temperature Mexican Geothermal Resources. Proceedings World Geothermal Congress 2015, Melbourne, Australia, April Romo-Jones, J.M. and Group CeMIE-Geo (2015). The Mexican Center for Innovation in Geothermal Energy (CeMIE-Geo). Proceedings World Geothermal Congress 2015, Melbourne, Australia, April SENER, Reporte de avances de energías limpias, Primer Semestre

10 Executive Secretary IEA Geothermal C/ - GNS Science Wairakei Research Centre Ph: +64 IEA Geothermal 8211 E: iea-giasec@gns.cri.nz 8