May 23 (UPI) -- The possibility to tap geothermal resources in Mexico is what's drawing interest from global energy companies, French and Icelandic partners said.
French energy company ENGIE and its Icelandic counterpart, Reykjavik Geothermal, said the Mexican Ministry of Energy issued three exploration permits to assess the potential in the Latin American country.
The consortium of energy companies said the draw on geothermal resources would help build a low-carbon economy in Mexico, which is transforming its energy sector under the guidance of President Enrique Pena-Nieto.
"Granting these exploration permits to a partnership between France and Iceland marks a major step in the implementation of the geothermal energy reform since they are the first 100 percent foreign capital companies to invest in the Mexican geothermal industry," Efrain Villanueva Arcos, the general director of clean energy programs at the Mexican Ministry of Energy, said in a statement.
Iceland has long been the world's leader in the tapping and development of geothermal energy, taking advantage of its position on the volcanic rift between the Eurasian and North American plates to heat more than 90 percent of its buildings at low cost in a climate-friendly way. Iceland in 2012 signed on to a World Bank plan to facilitate geothermal developments in East Africa.
The International Geothermal Association estimates Mexico counts on geothermal energy for about 2.4 percent of the total national electric output and interest in the sector is high as regulatory mechanisms improve.
Geothermal energy is gaining a stronger position in energy company profiles as major economies look for additional low-carbon options. ENGIE in January made a debut in geothermal energy with a commitment to help build a power plant in Indonesia.
Indonesia has about 40 percent of the world's total geothermal resources, which ENGIE said could help the country with its goal of reducing carbon emissions by 29 percent by 2030.