Grupo México aiming to boost energy bet under next administration

Ahead of Sunday's general elections, Grupo México, the country's biggest miner, hopes the next administration will be more favorable to renewable energy.

Since coming to power in 2018, President Andrés Manuel López Obrador's administration has focused on fossil fuels to help federal oil firm Pemex, while tilting the balance in favor of public utility CFE in the energy sector. Ruling party candidate Claudia Sheinbaum, who is favored to win the presidency, and opposition candidate Xóchitl Gálvez have both spoken out in favor of renewables. The next administration takes office on October 1.

ALSO READ Spotlight: The sector agendas of Mexico's presidential frontrunners

The Grupo México conglomerate – operating in seven countries, including mining operations in Peru and the US – reported US$14.4bn in sales in 2023.

To find out more about the group's outlook, BNamericas reached out to its energy director Gustavo Ortega Gómez.

BNamericas: What obstacles did Grupo México's energy projects run into during the current administration?

Ortega: Basically, the fact that they don't like renewable technologies. That has been the main obstacle.

BNamericas: What about permits?

Ortega: Yes, the entire permitting process has also been severely affected, not only regarding energy but also related to the procedures handled by [environment ministry] Semarnat.

BNamericas: What's your expectation regarding the next administration?

Ortega: That they definitely focus on renewable technologies. During this six-year period, they practically stopped doing that. The only thing that has grown was distributed generation, that is, solar panels on roofs. However, this is very limited, to 500kW maximum.

Apparently it's going to go up to 1,000kW. And it's said they even could allow the limit to go up to 5,000kW, which would be fantastic because many industries consume those quantities or less, and more projects could be installed.

BNamericas: Would this development also benefit Grupo México's projects?

Ortega: Yes, it would certainly help us. We have two wind farms in Mexico, and we're putting distributed generation in some pumping systems. That is, they're isolated systems and are below 500kW. This is what we're currently seeing.

Something very important is thermosolar. This consists of taking advantage of the heat of sunlight to heat a fluid, an alcohol, and then heat a solution in an exchanger, that is, water. The water passes through one side and the hot alcohol passes through the other side. This way the water is already heated, and you stop using fuel to heat the water.

BNamericas: Do you have thermosolar projects?

Ortega: We have one operating at the La Caridad [copper] mine, and we're seeing similar projects in Peru, at the Toquepala mine and the Cananea mine.

BNamericas: Are these projects in the pre-feasibility phase?

Ortega: No, they're practically ready. We're just monitoring and fine-tuning some details, but it's practically a fact that we will do them.

BNamericas: So they're ready to start operations?

Ortega: No, just the engineering has to be done, so it will still take about a year, a little more. But the important thing is that they're authorized and we're at that stage.

BNamericas: What fuel does Grupo México see as the future of energy?

Ortega: Green hydrogen without a doubt.

BNamericas: What are the expectations?

Ortega: First of all, it must be competitive. Right now it's not.

BNamericas: Because of the price?

Ortega: Because of the price, yes. Obtaining it is very, very expensive, and it's not advisable to be using it.

The production price would be extremely high, but the technology is undoubtedly advancing and we will be seeing more of it very soon. The same with energy storage. It's something that's very achievable and we'll soon be implementing it.

BNamericas: Do you have green hydrogen projects?

Ortega: Not right now.

BNamericas: What are Grupo México's most important energy projects?

Ortega: We have a 164MW wind farm. It's called Fenicias and is a park that we built and has been ready to operate for three years.

BNamericas: Why haven't operations started?

Ortega: Operations have been delayed due to administrative issues.

BNamericas: Permits?

Ortega: Permits, yes. And right now we're basically looking at the possibility that it could go into operation.

BNamericas: When could that be?

Ortega: In the next few months. Let's wait and see what happens in the coming days.

BNamericas: What other energy projects does Grupo México have?

Ortega: We have some photovoltaic projects, both at mines in the US and in Peru.

BNamericas: And here in Mexico?

Ortega: Not here in Mexico at this time, but surely, with the change of administration, we will very likely begin to see some projects or prospects that we have out there.