Investment in geothermal energy for domestic use in Mexico

Abstract

This research aims to identify the possible effects of the increase in investment in geothermal energy for its use in Mexican homes and its economic benefit in domestic rates that have registered an increase of 35% during the last 10 years. Using the fixed effects panel econometric model, the identified results showed that for the most common type of rate in the central zone, the increase in investment in geothermal plants is a function of demand, because when there is an increase in internal sales and a reduction in costs of production. The foregoing would encourage the detonation of the geothermal sector for state and private companies with monetary and environmental benefits. Due to lack of information in this sector, only the public data available from the Secretaría de Energía were used. The originality of the research allows identify the economic effect and the opening of geothermal energy in the energy market for the benefit of Mexicans. It is concluded that with a high plant factor in geothermal plants, it would stimulate investment with the consequent reduction in rates. JEL Classification: Q4, Q2, L7, L5, L8.