Thursday, October 20, 2016

Mexico: Interview With CEO of Grupo Dragón

A Mexican Look at Geothermal Energy (Renewable Energy Mexico)

In an excerpt from his exclusive interview with Mexico Energy Review 2017, José Pablo Fernández, CEO of Grupo Dragón shares part of the company’s experience as the first private entity exploiting geothermal energy in Mexico and migrating to the new regulatory scheme.  

Q: Grupo Dragón got the first private concession for a geothermal project in Mexico, how was your experience migrating to the new regulatory framework?

A: It is impossible to complete a geothermal project in less than five years as it requires large investments and long exploratory and drilling periods. The same situation happens in all countries with geothermal resources. It is not a challenge exclusive to Mexico. Our project has been operating for one year, meaning it was planned at least six years ago. Because of this, when we acquired our permits, the project was under the self-supply scheme from the previous regulatory framework. The old regulation required geothermal projects to have a water concession from CONAGUA, which was later transformed into a geothermal one. This transition period brought uncertainty to our project as it was not sure that our previously acquired permit would migrate to the new law. We managed to change our concession, which was fortunate as we already had made major investments. We bet strongly on geothermal as we considered it a promising and clean energy technology in spite of the risks involved, and all of this happened before the Energy Reform.