MEXICAN GEOTHERMAL MARKET OPPORTUNITIES WORKSHOP

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1 MEXICAN GEOTHERMAL MARKET OPPORTUNITIES WORKSHOP PANEL: Developing Geothermal Projects in Mexico Experiences and Government Support Panelists from the private sector will present experiences and best practices for working in Mexico s geothermal sector Gerardo Hiriart L CEO Grupo ENAL México ghiriart@enal.com.mx

2 Geothermal development in Mexico with the new legislation (ENAL views) The new Geothermal Law gives a clear road on how to develop private geothermal projects. The new rules for the Mexican Electrical Market are giving with auctions (subastas) a good opportunity for some clean energies to obtain long term PPA for Energy and Clean Energy Certificates (CEL); Record low prices We expect some special considerations for geothermal energy to play an important role in future auctions: a. Power (Capacity); Price is still too low b. Energy and CEL; Some adjustments need to be done when comparing constant with intermittent energy c. Time for construction; Geothermal needs to find and proof the resource before beginning power plant construction. Three years is not enough d. Default Penalty: Consider that Geothermic is exposed to geological uncertainties. Not only commercial ones Will present a Steps of a Typical new geothermal project ENAL experience in geothermics in Mexico and abroad

3 Typical case Apply SENER for the CONCESSION Apply SENER Exploration Permit 1. Conduct all the geothermal exploratory studies to understand the conceptual model and to have estimate of MW e 2. Drill Slim Holes or/and exploratory Wells. Test and confirm the capacity Exploration Permit 3 years (renew once) Possible early generation BPU Concession for 30 years (ren) PRELIMINARY STUDIES DEVELOPMENT G-G-G-T-H SW..? EW1 IW1 EW2..? CONSTRUCTION PW1 PW2 PW3.? Power Plant. Gathering. TL SELLING O&M Auction 15/20y To the Market Bilateral Permitting (SENER, Interconnection) Land (All levels); INAH Project management Drill the Wells Studies, Selection, Design and Specs for Wells, Gathering, Power Plant, TL Water concession (Conagua) Environmental (Semarnat) Generation Permit (CRE) PPA (Auctions, market, bilateral, others..) Financing (Special scheme for geothermics) Build gathering system Build Power Plant Build Transmission Line Selling Products Energy (firm) (MWh/y) CEL (MWh/y) Power (MW/y) (soon) Ancillary Services

4 ENAL experiences working in Mexico and other foreign markets We have a very good knowledge of all the geothermal resources of Mexico (CRE/IDB report May 2011 and others ) We have worked in geothermal areas in foreign countries: Bolivia, Chile, Guatemala, Ecuador, Argentina and Colombia. ENAL is developing two Geothermal Areas where it has the Permit for Exploration ENAL has experience providing highly qualified geothermal services from A to Z ENAL has recently explored the possibility of Geothermal Distributed Electrical Energy in Mexico

5 We do all the geothermal tasks from A to Z Exploration: Geophysics Exploration: Geology Exploration: Geochemistry Design of Surface equipment Drilling Environmental Assesment Well test and well logging (P, T, Q) Mathematical modelling of reservoir Thermal stress analysis and design Power Plant civil and mechanical cosntruction

6 Heat in place USGS method and ENAL gradual decompression (both with Montecarlo technique) ENAL Flow rate measurement Heat transfer Roca-Fluido Water recharge

7 DUNAS GEOTHERMAL AREA 7

8 Planta geotérmica BPU 500 kw Other ENAL capabilities: Design and construction of a 500 kw BPU for well testing Continuous monitoring of steam main parameters and earlier generation Horizontal separator with integrated demister ENAL design of the power plant Factory testing of the turbine Silencer with pressure recovery

9 THANKS FOR YOUR ATTENTION Gerardo Hiriart L CEO Grupo ENAL México ghiriart@enal.com.mx