EFRAÍN VILLANUEVA ARCOS, General Director of Clean Energy, Ministry of Energy, SENER IGC 2018 - Breaking the Barriers The 4th Iceland Geothermal Conference will be hosted in Iceland in April 2018. The conference offers an in-depth discussion of the barriers that hinder development of the geothermal sector and how to overcome them. It also focuses on the business environment through three separate themes: vision, development, and operations. Having established itself as an important regular conference of the international community, IGC 2018 brought together more than 600 participants from 40 countries from around the world. The 4th Iceland Geothermal Conference will be hosted in Iceland in April 2018. The conference offers an in-depth discussion of the barriers that hinder development of the geothermal sector and how to overcome them.

1. Mexico
EFRAÍN VILLANUEVA ARCOS
General Director of Clean Energy
Ministry of Energy, SENER
APRIL, 2018
A2 - Setting the Frame for
Success

2. 2
CONTENT
ENRELmx
1. RESEARCH
2. REGULATORY
FRAMEWORK
4. DIRECT
APPLICATIONS &
TOOLS
3. FINANCIAL RISK MITIGATION
MECHANISM

3. TOTAL GENERATION: 159,819 GWH
CONTEXT: POWER MIX & GOALS
21%
PRELIMINARY
3.19%
WIND
0.17%
SOLAR
9.38%
HIDRO
0.75%
BAGASSE
1.95%
GEOTHERMAL
0.08%
BIOGAS
3
2018
25%
2021
30%
2024
35%
2030
37.7%
2050
50%
CLEAN ENERGIES GOALS:

4. Proved
Reserves
Probable
Reserves
Possible
Reserves
• 286 MW
• 5,730 MW
• 7,422 MW
CONTEXT: GEOTHERMAL POTENTIAL – 13.4 GWe
(POWER) AND ENERGY REFORM ADVANCES
4
RESULTS OF THE REFORM (2014 - 2018)
2 NEW EXPLOITATION CONCESSIONS
A 50% INCREASE
22 EXPLORATION PERMITS
(CFE + PRIVATE)
6 COMPANIES IN 9 STATES

5. 1. RESEARCH
Objective
• To integrate geothermal knowledge and generate synergies to
guide innovation, research and technological geothermal
development.
Budget
• $ 50,000,000 USD
Lines of research
Geothermal
Resources
Evaluation
Innovation in
Exploration
Technological
Development for
Exploitation
Direct Applications
Objective
• Developing EGS technology and finding new
approaches to make use of super-hot geothermal
systems.
Budget
• 20,000,000€
Location
Acoculco, PUE
https://www.gob.mx/cms/uploads/atta
chment/file/309675/VP_-
_P_Acoculco__PUE.pdf
Los Humeros, PUE
https://www.gob.mx/cms/uploads/atta
chment/file/227856/C_LOS_HUMEROS.
pdf
5

6. 6
2. REGULATORY FRAMEWORK
SENER
Regulates geothermal
Provides permits to
explore and concessions
to exploit
CONAGUA
Regulates waters
Provides permits to drill
exploratory wells and
concessions to exploit waters
CRE
Regulatory Commission
Provides permits to
generate power
CENACE
Market operator
Authorities involved in geothermal projects
1. SENER’s
Exploration Permit
• 3 years, renewable once
• Up to 150 km2
• The process is resolved
in 45 days
2. CONAGUA’s
Drilling Permit
• This permit is aimed to
drill wells, and is given
for a certain numer of
wells
3. SENER’s
Exploitation
Concession
• 30 years, renewable
• Up to 150 km2
• The process is resolved
in 30 days
4. CONAGUA’s
Exploitation of
Geothermal Waters
Concession
• 30 years, renewable
• The process is resolved
in 30 days
Process to invest in geothermal in Mexico

7. CTF, IDB, NAFIN and SENER have allied to
design a new mechanism to encourage
geothermal projects through a contingent
grant.
FINANCIAL MECHANISM TO PROMOTE
GEOTHERMAL INDUSTRY
2013
Risk Insurance
2018
Contingent
Grant
7
3. FINANCIAL RISK MITIGATION MECHANISM
The new mechanism shall be launched at GeoLAC 2018.
http://newenergyevents.com/geolac/

8. FOTEASE
funds opening
and credit
commissions
Repayment,
6 years (grace period)
Grant
CTF gives
contingent
grant for
drilling
Drilling service
to geothermal
developer
Tender
Geothermal
developer pays
drilling operation
when the plant
starts operating
Is drilling
successful?
No
Yes
Geothermal developer starts
construction of plant and
transmission linesFinancing
Repayment
a
b
IDB gives soft
loans for plant
and
transmission
lines
In case CFE is
the Geothermal
Developer
Is obligated to
exploit though a
PPP
Manages
8
3. FINANCIAL RISK MITIGATION MECHANISM
(PROPOSAL)
End

9. Guidelines
Eco-Credito
Empresarial
PRESEMEH
Route Map
4. DIRECT APPLICATIONS
In Progress
9

10. PERMITS AND
CONCESSIONS
CURRENT AND POTENTIAL INVENTORY
HYPERLINK: https://dgel.energia.gob.mx/inere/
10
4. TOOLS - INERE

11. 11HYPERLINK: https://dgel.energia.gob.mx/azel/
4. TOOLS – AZEL
CURRENT AND POTENTIAL INVENTORY
DOWNLOAD MAPS OR EXCEL FILES
CONSULTATION OF GEOTHERMAL
SITES WITH GOOD SURFACE
TEMPERATURES

12. 12
4. TOOLS – ENRELMX

13. The purpose of the Route Map is to identify the
challenges and barriers that the country faces for the
sustainable use of geothermal by 2030.
4. TOOLS – ROUTE MAP
13

14. GRACIAS
evillanueva@energía.gob.mx