Observatory for Renewable Energy
Transcription
Observatory for Renewable Energy
AUGUST 2011 Observatory of Renewable Energy in Latin America and The Caribbean MEXICO Final Report Product 1: Renewable Technological Base Line Product 2: State of Art This document was prepared by the following consultants: ENERGY INVESTIGATION CENTER - UNIVERSIDAD NACIONAL AUTÓNOMA DE MÉXICO (CIE-UNAM) The opinions expressed in this document are those of the author and do not necessarily reflect the views of the sponsoring organizations: the Latin American Energy Organization (OLADE) and the United Nations Industrial Development Organization (UNIDO). Accurate reproduction of information contained in this documentation is authorized, provided the source is acknowledged. Mexico- Products I and II CASE OF MEXICO Final Report Component 1: Renewable Technological Base Line Component 2: State of Art Mexico- Products I and II Table of Contents 1. Executive Summary .................................................................................................... 12 2. Energy technology baseline ........................................................................................ 17 2.1. Introduction .............................................................................................................. 17 2.2. Methodology ............................................................................................................. 18 2.3. Country energy information ................................................................................... 19 2.3.1. Gross Domestic Product ......................................................................................... 19 2.3.2. Energy intensity ....................................................................................................... 20 2.3.3. Energy consumption per capita ............................................................................. 23 2.3.4. Primary energy consumption ................................................................................. 24 2.3.5. Primary energy production .................................................................................... 28 2.3.6. Electric power sector energy consumption ........................................................... 30 2.3.7. Installed power capacity by technology................................................................. 31 2.3.8. Final energy consumption....................................................................................... 34 2.3.9. Final energy consumption by sector ...................................................................... 37 2.3.10. Limitations on the current energy pattern and renewable energy perspectives in Mexico. ...................................................................................................... 43 2.4. Institutional and legal framework for renewable power generation. ................. 46 2.4.1. Institutional framework.......................................................................................... 46 2.4.2. Legal framework ..................................................................................................... 50 2.4.3. Institutional framework for Clean Development Mechanism in Mexico........... 61 2 Mexico- Products I and II 2.5. Information on relevant facilities by type of renewable energy technology ....... 64 2.5.1. Geothermal power plants ....................................................................................... 67 2.5.2. Wind power.............................................................................................................. 78 2.5.3. Hydropower plants.................................................................................................. 88 2.5.4. Biogas power plants............................................................................................... 100 2.5.5. Sugar cane bagasse ................................................................................................ 109 2.5.6. Steam turbine......................................................................................................... 115 2.5.7. Combined cycle...................................................................................................... 119 2.5.8. Gas turbine............................................................................................................. 123 2.5.9. Internal combustion .............................................................................................. 128 2.5.10. Coal-fired power plants................................................................................. 132 2.5.11. Nuclear............................................................................................................ 136 2.6. Lessons learned ...................................................................................................... 139 3. State of the art (case studies).................................................................................... 140 3.1. Introduction ............................................................................................................ 140 3.2. Methodology ........................................................................................................... 140 3.2.1. Information sources .............................................................................................. 140 3.2.2. Selection criteria .................................................................................................... 142 3.3. Bioenergía de Nuevo León Project (Phase I and II) ........................................... 144 3.3.1. General project description .................................................................................. 144 3.3.2. Objectives ............................................................................................................... 146 3 Mexico- Products I and II 3.3.3. Stakeholders analysis ............................................................................................ 147 3.3.4. Legal aspects .......................................................................................................... 148 3.3.5. Technological aspects ............................................................................................ 150 3.3.6. Economic aspects ................................................................................................... 152 3.3.7. Social aspects.......................................................................................................... 153 3.3.8. Environmental aspects .......................................................................................... 155 3.3.9. Replicability ........................................................................................................... 156 3.3.10. Barriers ........................................................................................................... 156 3.3.11. Success factors for project replicability....................................................... 157 3.4. La Rumorosa I wind farm..................................................................................... 159 3.4.1. General project description .................................................................................. 159 3.4.2. Objectives ............................................................................................................... 160 3.4.3. Stakeholder analysis.............................................................................................. 160 3.4.4. Legal aspects .......................................................................................................... 162 3.4.5. Technological aspects ............................................................................................ 162 3.4.6. Economical aspects................................................................................................ 163 3.4.7. Social aspects.......................................................................................................... 165 3.4.8. Environmental aspects .......................................................................................... 169 3.4.9. Replicability ........................................................................................................... 171 3.4.10. Barriers ........................................................................................................... 171 3.4.11. Success factors for project replicability....................................................... 173 4 Mexico- Products I and II 3.4.12. Photos of La Rumorosa wind farm project ................................................. 174 3.5. Interviews with managers of Bioenergía de Nuevo León and La Rumorosa projects .............................................................................................................................. 177 3.5.1. Interview with the Technology and Development Director of SIMEPRODE (Ing. Armando Cabazos) ................................................................................................. 177 3.5.2. Interview with the General Director of the State Energy Commission (Lic. David Muñoz Andrade), held on September 14th, 2010................................................ 178 3.6. Speeches made by the Mexican President and by the United States State Secretary ........................................................................................................................... 186 3.6.1. Speech of President Felipe Calderón during his visit to the Bioenergía de Nuevo León facilities.................................................................................................................... 186 3.6.2. Speech by the Secretary of State Hillary Clinton on the Bioenergía de Nuevo León plant ......................................................................................................................... 188 3.6.3. Speech by President Calderón during the inauguration of “La Rumorosa” wind farm project............................................................................................................. 188 3.7. Lessons learned ...................................................................................................... 190 4. Conclusions ................................................................................................................ 191 Bibliography ..................................................................................................................... 193 List of Tables Table 1. AAGR of Gross Domestic Product in Mexico. .................................................20 Table 2. AAGR of energy intensity in Mexico.................................................................21 5 Mexico- Products I and II Table 3. AAGR of energy intensity1/ by economic sector in Mexico. ............................23 Table 4. AAGR of final energy and electricity consumption per capita in Mexico. ....23 Table 5 AAGR of primary energy consumption by energy source in Mexico. ............26 Table 6. AAGR of final energy consumption by sector in Mexico. ...............................36 Table 7. Estimated potential of renewable energies in Mexico......................................45 Table 8. Mexican CDM projects by category and stage. ................................................63 Table 9. Financing of the Bioenergía de Nuevo León project. .....................................147 Table 10. Main technical features of La Rumorosa wind farm project......................163 Table 11. Main environmental impacts of the power plant and mitigation measures. ............................................................................................................................................170 List of Figures Figure 1. Gross Domestic Product in Mexico, 1990-2009...............................................20 Figure 2. Energy intensity in Mexico, 1990-2008. ...........................................................21 Figure 3. Variation in energy intensity by economic sector in Mexico. ........................22 Figure 4 Primary energy consumption in Mexico, 1990-2008. ......................................25 Figure 5 Primary energy consumption by source in Mexico, 2008. ..............................27 Figure 6 Evolution of primary energy production in Mexico, 1990 and 2008. ............29 Figure 7 Electric power sector energy consumption, 1990 and 2008. ...........................30 Figure 8 Evolution of the installed power capacity by technology in Mexico, 1990 2009......................................................................................................................................32 6 Mexico- Products I and II Figure 9 Avoided emissions attributed to renewable energy power generation, 2008 2009......................................................................................................................................33 Figure 10 Final energy consumption by sector in Mexico, 1990-2008. .........................34 Figure 11 Final energy consumption by fuel type, 1990-2008........................................37 Figure 12 Evolution of final energy consumption in the Mexican residential sector, 1990-2008. ...........................................................................................................................38 Figure 13 Evolution of final energy consumption in the commercial and service sectors, 1990-2008...............................................................................................................39 Figure 14 Evolution of final energy consumption in the Mexican transport sector, 1990-2008. ...........................................................................................................................40 Figure 15 Evolution of final energy consumption in the Mexican industrial sector, 1990-2008. ...........................................................................................................................41 Figure 16 Evolution of final energy consumption in the Mexican agriculture sector, 1990-2008. ...........................................................................................................................42 Figure 17. Organization of the electric power sector in Mexico. ...................................47 Figure 18 Selection criteria for case studies. .................................................................143 Figure 19. Bioenergía de Nuevo León (BENLESA) project location. .........................145 Figure 20. Bioenergía de Nuevo León Project scheme. ................................................146 Figure 21. Operational scheme of Bioenergía de Nuevo León project........................151 Figure 22 Stakeholders involved in the Bioenergía de Nuevo León project...............154 Figure 23. La Rumorosa project location. .....................................................................159 Figure 24. Stakeholders involved in La Rumorosa project..........................................161 Figure 25. Stakeholders involved in the Program “Tu Energía”. ...............................168 7 Mexico- Products I and II List of Images Image 1. Facilities at Cerro Prieto I geothermal field. ...................................................67 Image 2. Facilities at Cerro Prieto II geothermal field...................................................70 Image 3. Facilities at Cerro Prieto III geothermal field. ................................................72 Image 4. Facilities at Cerro Prieto IV geothermal field. ................................................74 Image 5. Facilities at Los Azufres geothermal field. .......................................................76 Image 6. La Venta II wind farm. ......................................................................................78 Image 7. EURUS wind farm..............................................................................................80 Image 8. Inauguration of the Parques Ecológicos wind farm........................................82 Image 9. La Rumorosa wind farm....................................................................................84 Image 10. Eléctrica del Valle de México wind farm (Lamatalaventosa). .....................86 Image 11. Cajón de Peñas mini-hydro project. ...............................................................88 Image 12. Machinery room at El Gallo small hydro project. ........................................90 Image 13. Constitución de Apatzingán (Chilatlán) small hydro project. .....................92 Image 14. Manuel M. Torres (Chicoasén) hydropower plant........................................94 Image 15. Malpaso hydropower plant..............................................................................96 Image 16. Aguamilpa (Solidaridad) hydropower plant..................................................98 Image 17. Bioenergía de Nuevo León project................................................................100 Image 18. Dulces Nombres sewage treatment plant. ....................................................102 Image 19. Planta Norte project. ......................................................................................104 8 Mexico- Products I and II Image 20. Energía Láctea project...................................................................................106 Image 21. Facilities at El Higo sugar mill. .....................................................................109 Image 22. Facilities at San Miguel del Naranjo sugar mill. .........................................111 Image 23. Facilities at Melchor Ocampo sugar mill. ....................................................113 Image 24. Facilities at Plutarco E. Calles steam turbine power plant. .......................115 Image 25. Facilities at Francisco Pérez Ríos steam turbine power plant. ..................117 Image 26. Facilities at Tamazunchale combined cycle power plant............................119 Image 27. Facilities at Altamira combined cycle power plant. ....................................121 Image 28. Facilities at San Lorenzo Potencia gas turbine power plant. Source: CFE (2010c) ...............................................................................................................................123 Image 29. Facilities at Enertek gas turbine power plant..............................................125 Image 30. Facilities at Gral. Agustín Olachea (San Carlos) internal combustion power plant...................................................................................................................................129 Image 31. Facilities at José López Portillo (Río Escondido) coal-fired power plant. 132 Image 32. Facilities at Carbón II coal-fired power plant. ............................................134 Image 33. Facilities at Laguna Verde nuclear power plant. ........................................136 Image 34. Wind generators at La Rumorosa wind farm project. ..............................174 Image 35. Complementary facilities at La Rumorosa wind farm project ..................175 Image 36. La Rumorosa wind farm project. .................................................................176 9 Mexico- Products I and II Abbreviations and acronyms AAGR APF CICESE CEA CEE CENACE CFE CICC CIE-UNAM CONUEE CONEVAL CONAPO CRE DOF LAERFTE LASE LPDB LSPEE IBRD INEGI Average Annual Growth Rate Administración Pública Federal (Federal Public Administration) Centro de Investigación Científica y de Educación Superior de Ensenada (Ensenada Center for Scientific Research and Higher Education) Comisión Estatal del Agua de Baja California (Baja California State Water Commission) Comisión Estatal de Energía del Estado de Baja California (Baja California State Energy Commission) Centro Nacional de Control de Energía (National Energy Control Center) Comisión Federal de Electricidad (Federal Electricity Commission) Comisión Intersecretarial de Cambio Climático (Intersecretarial Commission on Climate Change) Centro de Investigación en Energía-Universidad Nacional Autónoma de México (Center for Energy Research of the National Autonomous University of Mexico) Comisión Nacional para el Uso Eficiente de Energía (National Commission for Energy Efficiency) Consejo Nacional de Evaluación de la Política de Desarrollo Social (The National Council for the Evaluation of Social Development Policy) Consejo Nacional de Población (The National Council of Population) Comisión Reguladora de Energía (Energy Regulatory Commission) Diario Oficial de la Federación (Official Gazette of the Federation) Ley para el Aprovechamiento de Energías Renovables y el Financiamiento de la Transición Energética (Law for the Use of Renewable Energies and Financing of Energy Transition) Ley para el Aprovechamiento Sustentable de la Energía (Law for the Sustainable Use of Energy) Ley de Promoción y Desarrollo de los Bioenergéticos (Law for the Promotion and Development of Biofuels) Ley del Servicio Público de Energía Eléctrica (Public Electricity Service Law) International Bank for Reconstruction and Development Instituto Nacional de Estadística y Geografía (National Institute of Statistics and Geography) 10 Mexico- Products I and II OLADE PEMEX PNUD PEAER PRONASE SEN SENER SEISA SHCP SIMEPRODE SEMARNAT EIA USAID UNFFCC Organización Latinoamericana de Energía (Latinamerican Energy Organization) Petróleos Mexicanos (Mexican Petroleum) Programa de las Naciones Unidas para el Desarrollo (United Nations Development Programme) Programa Especial de Aprovechamiento de las Energías Renovables (Program for the Use of Renewable Energies) Programa Nacional de Aprovechamiento Sustentable de Energía (National Program for the Sustainable Use of Energy) Sistema Eléctrico Nacional (National Interconnected System) Secretaría de Energía (Ministry of Energy) Sistemas de Energía Internacional S.A (International Energy Systems) Secretaría de Hacienda y Crédito Público (Ministry of Finance and Public Credit) Sistema Integral para el Manejo Ecológico y Procesamiento de Desechos (Integrated System for Ecological Waste Management and Processing) Secretaría de Medio Ambiente Recursos Naturales (Ministry of Environment and Natural Resources) U.S. Energy Information Administration United States Agency for International Development United Nations Framework Convention on Climate Change 11 Mexico- Products I and II 1. Executive Summary This report presents and analyzes the energy technology baseline as well as the most common practices in renewable energies for power generation in Mexico. Mexico is the second largest economy in Latin America with a GDP of 814,037 million dollars (in 2007). It is also the second largest populated country of the region with 107, 550, 697 inhabitants, and the third largest country by surface area with 1,964,375 Km2. Its primary energy consumption accounts for nearly 30% of the total within the region and has been growing steadily since several years ago. Between 1990 and 2008, energy consumption per capita increased by 13% while that of electricity was more marked with an increase of 78% —mainly due to electricity coverage which reached 97% of the population by 2008. The final energy consumption is dominated by the transport sector (41% of the total), followed by the industrial (23%) and the personal use and residential sectors (14% and 13%, respectively). The least energy-intensive sectors are agriculture (2.4%) and the commercial and public services (2.1% and 0.5%). Lastly, the non-energy use represented 4% of the total. This energy production and consumption pattern has been accompanied by the consolidation of a monopolistic structure of the Mexican energy sector, namely: the Mexican Petroleum (PEMEX) in the field of hydrocarbons and the Federal Electricity Commission (CFE) in the electric power sector (a process that was strengthened with the closure of the utility Central Power and Light Company). This monopoly structure has fostered a centralized power generation system essentially based on large power plants and a national interconnected system for the transmission and distribution of electricity. Thus, distributed power generation systems —smaller in size, but with high potential to directly promote social, productive and regional development as well as the use of local or regional renewable energy resources— face important difficulties to pave the way in Mexico. Mexico’s energy baseline is dominated by fossil-based conventional energy technologies, mainly hydrocarbons. Currently, 89% of the energy supply and 74% of the installed power capacity are covered by these energy sources. As for renewable energies, they account for 9.4% of the total primary energy consumed in Mexico. Hydro is the most important contribution of renewable energies and accounts for 4.5% of Mexico’s primary energy consumption. Thermal renewable energies (firewood and sugar cane bagasse) are the second most important sources of renewable energies, with 4% of primary energy consumption. Finally, other renewable energies such as geothermal and wind power together account for less than 1%. 12 Mexico- Products I and II With regard to the electric power sector, the use of renewable energies has been decreasing its participation, although it still plays an important role. Electricity from renewable energies accounts for 19.1% of total power generation. Hydropower contributes to 15.9% of this total while geothermal, biomass (bagasse and biogas) and wind power to 2.9%, 0.3%, and 0.1%, respectively. With respect to final energy consumption, the use of renewable energies in Mexico refers to the traditional use of firewood in the residential sector as well as to the sugar cane bagasse used to fire boilers in the sugar cane industry, both accounting for 6% of the total. This energy consumption pattern seems to have reached a crossroad in Mexico’s current energy situation. Proven oil reserves have fallen significantly whereas the national production of hydrocarbons slowly decreases and there has been little success in discovering new oilfields which are needed to increase its production capacity. Furthermore, the national energy consumption has not yet been significantly decreased, which results in a situation where Mexico’s proven oil reserves are estimated to last only 10.8 years at current production rates. Since approximately 25% of the federation revenues come from oil-related activities (Petróleos Mexicanos, 2010), the decline in proven reserves and oil production opens the possibility that energy subsidies, which are currently supported by the Mexican state, become unsustainable, imposing a major burden on the economic system and people’s daily life. With regards to the environmental front, the Mexican energy system emits 430 million tonnes of CO2, thus Mexico ranking as the thirteenth largest emitter of CO2 worldwide; emissions from power generation account for 26% of this total. Given this emissions level, it is very likely that the country will be subject to significant international pressure to limit its CO2 emissions. In addition, this energy pattern has contributed to an increased local pollution, deteriorating soils, rivers, forests, marine areas and cities, ranking the country as number 43 in the Environmental Performance Index, below other less developed economies such as Ecuador or Cuba. Increasing internal demands of ecologist groups, the claims of society to offset environmental damages caused by conventional energy sources, the political agenda and the establishment of more stringent environmental regulations will be increasingly important factors to put pressure for change on the aforementioned energy pattern. The problem with such unsustainable energy pattern in Mexico makes imperative and indispensable its substitution for another one that favors and boosts the country’s sustainable development. In this view, renewable energies (ER) represent the most important alternative for Mexico, since there are plenty of these resources (SENER, 2005) in the country. 13 Mexico- Products I and II In this context, it is interesting to note that there has been increasing investments in renewable energy power plants in recent years, although they do not surpass those made in conventional power plants. For example, 40% of total investments (420 million dollars) was allocated to renewable energy projects in the year 2008, especially public investments in hydropower plants. It will be necessary to keep an eye on it over the next years with the aim of determining whether or not it is the beginning of a new trend for renewable energy utilization in Mexico. With regards to financing of Research, Development and Implementation (I+D+I) for renewable energies, and even though it is now possible to identify national funds and significative budgets in the field of renewable energies, these resources are still low and account for 6% of the total. Mexico’s institutional and legal framework have undertaken incremental steps towards energy transition by starting with the utilization of large-scale renewable energy applications. The legal framework for the development of electric power generation in the Mexican sector was established in 1992 with the reform of the Public Electricity Service Law (DOF, 1992) by allowing the participation of new private and social actors in the development of cogeneration, self-supply, small power producer, independent power producer, import and export projects. Nevertheless, none of these newly allowed modalities can supply electricity for public service, since this activity is constitutionally reserved to the nation through a public utility, the Federal Electricity Commission (CFE). The temporary use of the national transmission system by permit holders, so called "porteo", is also allowed by this law. However, the institutional and legal breakthrough was the 2008 energy reform by enacting the Law for the Promotion and Development of Biofuels (LPDB), the Law for the Sustainable Use of Energy (LASE) and the Law for the Use of Renewable Energies and Financing of Energy Transition (LAERFTE). These laws are intended to promote a more intensive use of renewable energies and clean technologies, especially the LAERFTE, which mandates the issuance of regulatory instruments for energy use, the creation of an energy transition fund and the elaboration of a national strategy over the next 15 years. Similarly, it is important to highlight, on the one hand, the previous years’ reform efforts, which led to the creation of a I+D+I fund for sustainable energy (approximately 100 million USD for renewable and clean energies), and on the other, the activities undertaken by the Energy Regulatory Commission in order to set the basis for renewable energy power generation at small and medium scale projects, including net metering for solar energy systems. 14 Mexico- Products I and II The low penetration of renewable energies for power generation requires, however, an analysis of the relevant practices in Mexico. To this end, information was gathered and then analyzed. The main lessons learned from this analysis and from country’s energy information were: Due to its distributed generation nature, renewable energy utilization must be a coordinated effort among public, private and social sectors within their corresponding constitutional competence. Renewable Energies (ER) have important niche markets that can be used on a competitive basis, and adequate financial schemes have been found. These facilities are also those with higher possibilities to promote local sustainable development, particularly for small and medium scale projects. RE facilities can be carriers of important local environmental benefits while mitigating climate change; they can also contribute to other important benefits such as the support of local productive activities and social development, the increased value of local ER resources and the development of technology and engineering services at both local and national levels. The use of renewable energies for power generation is an activity opened either to state governments or to private investors under the modalities of self-supply, cogeneration and small power producer. Lessons learned from these experiences enabled the establishment of criteria for the selection of two renewable energy facilities which clearly contribute to local sustainable development and, therefore, have benefited from high social acceptance. The first project has been operating with a permit for cogeneration and the other one with a permit for selfsupply. In either case, the renewable resource is used to generate electricity and contributes directly to local development. For this reason, it would be desirable to replicate the following projects throughout Mexico and other countries: Bioenergía de Nuevo León is the largest project of its kind in Latin America and generates electricity from landfill biogas in the suburbs of Monterrey while solving social and garbage environmental problems. Furthermore, it increases and dignifies the quality of life of the people, particularly those living in the surroundings; it generates direct economic benefits to the population; it contributes to important savings in the electricity bills of the municipalities and several state agencies; it represents an important achievement in Mexican engineering and considerably reduces CO2e emissions. Located at the municipality of Mexicali, La Rumorosa wind farm is the first gridconnected wind project; it takes advantage of an abundant local wind resource while generated economic benefits, derived from the savings in the electricity bill (street 15 Mexico- Products I and II lighting) and from the excess power sold to the Federal Electricity Commission, are distributed to the poorest population of Mexicali so that they can either pay for the electricity bill —it would otherwise not only represent an important expense due to air conditioning needs of the location during the hot season, but also be uncomfortable— or to acquire more efficient appliances. An analysis of the main barriers to the development of both case studies was carried out and the solutions and lessons learned were determined and presented. Finally, it is concluded that the projects replicability is guaranteed when: • Local governments’ strongly support the development of renewable energy projects, especially if they are part of their institutional programs or public policies. • There is an institutional capacity for leading and solving problems at all stages of the renewable energy project in Mexico. • It is possible to work in close collaboration with the CFE from early project stages. • There is a technical capacity that can contribute to generate information on the project’s feasibility while supporting its development and operation. • Renewable energy projects have local sustainable development as their central axis, especially in the context of environmental, health, social and productive issues. • The project enjoys public acceptance due to clear and transparent information dissemination from early project stages, aiming at negotiating and reaching consensus on project development. • The renewable energy project delivers direct benefits to local governments such as savings in energy expenses and increased public image while avoiding public debt burdens that cannot be covered by their budgets for electricity. • Alliances among decentralized state bodies and energy companies are facilitated. • National and international funds, which are characterized not only by their accessibility, but also by their soft and long-term features, are created to finance projects that place especial emphasis on local sustainable development. • The project contributes to alleviate social development, health and environmental problems, especially through savings in the electricity bills of states and municipalities and the sale of excess power, guaranteeing in this way its social acceptance. 16 Mexico- Products I and II 2. • Additional revenues coming from either CDM project registration or the sale of greenhouse gases reduction in international carbon markets are obtained, especially if they are allocated to local sustainable development. • The development of local institutional and technical capacities is supported to the extent they can be equivalent to those of either the Baja California State Energy Commission or the SIMEPRODE in the state of Nuevo Leon, especially if state governments are the main promoters of the project. Energy technology baseline 2.1. Introduction Rooted in the discovery of important oilfields during the seventies, the Mexican energy system has been evolving towards a pattern which increasingly relies on the supply and consumption of fossil fuels. The Mexican electric power system clearly illustrates this pattern. In the late 70s the use of renewable energy sources (mainly hydropower) accounted for 57% of the total installed capacity. While todays this share decreased to constitute only 24%, fossil fuels increased their participation to 74% and the remaining share was mainly supplied by nuclear power (SENER, 2010a). Similarly, total primary energy demand in Mexico reflects this dependency on fossil fuels due to the fact that 89% was covered by these energy sources, while nuclear power and renewable energy sources —mainly hydropower— covered 2% and 9%, respectively (SENER, 2009a). Due to the low incidence of the current energy pattern in the promotion of local and regional sustainable development as well as in the utilization of renewable energy sources, this project describes the technology baseline prevalent in the Mexican energy system, and the main role and practices that renewable energies play in Mexico. To this end, general information on the current energy situation, including the identified barriers, the renewable energy legal framework —focused on the 2008 energy reform when the first Law for the Utilization of Renewable Energy in Mexico was passed— and its impacts on the implementation of renewable energy technologies in Mexico and in the energy market is presented first. Then, information on the most important renewable energy facilities for power generation are identified and gathered. Finally, lessons learned from the technology and renewable energy facilities baseline are analyzed by placing especial emphasis on the identification of key factors relevant to their practice and contribution to sustainable development. 17 Mexico- Products I and II 2.2. Methodology Core information used for the development of the energy technology baseline can be divided into four groups, according to the sources and the type of information: a) b) c) d) Energy information sources. Social, economic and productive information sources by sector. Energy legal and regulatory information. Others. Energy information resources were obtained from: • Publications from the Ministry of Energy, such as the National Energy Balance, Energy Outlooks and Energy Information System (SIE), which can be accessed through SENER’s web site. • Publications and available information from the Federal Electricity Commission , including its official website and especially statistics. • Publications and information available from Mexican Petroleum (PEMEX) including its official website, and particularly statistics. • Publications and information from the Energy Regulatory Commission including its website, and information specifically on permit holders of electricity. • The National Commission for Energy Efficiency (CONUEE) (the former National Commission for Energy Savings “CONAE”) through its publications and information available on its web site. It is worth mentioning that all of the resources mentioned above are official and the most comprehensive and reliable information for the Mexican energy sector. Social, economic and productive information resources by sector were obtained from: • The National Institute of Statistics and Geography - several censuses, yearbooks and statistical surveys. This information is available through its publications and on its official website. • Documents of the Presidency of the Republic of Mexico. Energy legal and regulatory information was obtained from: • The Official Gazette of the Federation (DOF), including information on the laws, ordinances, resolutions and other legal provisions applicable to the Mexican energy sector and related issues. 18 Mexico- Products I and II Other sources of information refer to national and international energy-related publications, as well as websites of national and international institutes, universities and research centers in the field of energy. All of the above information mentioned above is presented in the list of references included in this report. 2.3. Country energy information1 Mexico is the third largest country by surface area in Latin America, with 1,964,375 Km2 (INEGI, 2010a), and according to CONAPO (2010), the second largest populated country of this region, with 107, 550, 697 inhabitants —the largest one among Spanish speaking countries—. Out of this total, 76% of its population (78, 987, 743 inhabitants) live in urban areas, while the remaining 24% (24,275,645 inhabitants) are located in rural zones (INEGI 2010b). In the year 2009, the Gross Domestic Product (GDP) amounted to 814,037 million dollars of 2007 (INEGI 2010c), placing Mexico as the second most important economy of Latin America —just behind Brazil— and as the second most important economy among Spanish speaking countries —after the Spanish economy—. Lastly, Mexico represents roughly 30% of the primary energy consumption in Latin America. 2.3.1. Gross Domestic Product According to INEGI (2010c), the Gross Domestic Product (GDP) of Mexico has shown a historical pattern characterized by periods of economic stagnation and by those of some dynamism, highlighting the 1990-2000 period, with an Average Annual Growth Rate (AAGR) of 3.7%, and the year 1995, with a drop of 5% —as a result of the economic crisis faced by the country in the same year—. During the 2000-2009 period the AAGR was 1.2%, which is lower compared to the previous period. During the 1990-2009 period, the AAGR was 2.5%, which indicates that Mexico’s economy has grown at a moderate rate compared to other emerging economies that were negatively affected by the 2009 economic crisis, as shown in Figure 1. 1 A summary of numerical information, presented throughout this section, is available on the technical data sheet Nr. 1 of the electronic document. 19 Mexico- Products I and II Table 1. AAGR of Gross Domestic Product in Mexico. Mexico 1990-2000 2000-2009 1990-2009 3.7% 1.2% 2.5% Source: Own elaboration with data from INEGI (2010c) and SENER (several years). Figure 1. Gross Domestic Product in Mexico, 1990-2009. Source: Own elaboration with data from INEGI (2010c). 2.3.2. Energy intensity Domestic energy intensity, calculated as the ratio of the primary energy consumption to the GDP value, has historically shown a slow reduction from 10,039 kJ/USD2007 in the year 1990 to 9,823 kJ/USD2007 by 2008, with a decreasing AAGR of 0.1% (see Figure 2 and Table 2). This decreasing rate was emphasized during the 1990-2000 period —in spite of the deterioration of this indicator during the 1995 economic crisis in Mexico—. In contrast, there was a positive AAGR of 1.6% in the 2000-2008 period that can be explained by the stagnation of the GDP as well as by a higher growth in energy demand, mainly in the transport sector during the last decade (SENER, several years). 20 Mexico- Products I and II Table 2. AAGR of energy intensity in Mexico. Mexico 1990-2000 2000-2008 1990-2008 -1.41% 1.57% -0.1% Source: Own elaboration with data from INEGI (2010c) and SENER (several years). A disaggregation of energy intensity2 (see Figure 3 and Table 3), indexed to 1993 = 100, shows that agriculture, livestock and fisheries sectors have contributed to the deterioration of energy intensity, since they grew at a positive AAGR of 0.82% between 1993 and 2008. Figure 2. Energy intensity in Mexico, 1990-2008. Source: Own elaboration with data from INEGI (2010c) and SENER (several years). In contrast, the industry, mining and the energy sector have shown an improved trend, with a negative AAGR of 1.2% over the same period. This can be chiefly attributed to “changes in the production processes, the use of new capital goods and more efficient technologies 2 GDP data by economic sector is available from that year onwards in INEGI (2010c). 21 Mexico- Products I and II that reduce the energy use per unit produced […] as a response to fluctuations in energy prices, competition, among other factors” (SENER, 2004). However, this trend has also shown upward fluctuations in recent years mainly driven by a higher consumption of the energy sector own use. Figure 3. Variation in energy intensity by economic sector in Mexico. Source: Own elaboration with data from INEGI (2010c) and SENER (several years). With regards to transport sector, it showed an improved trend in terms of energy intensity, with a negative AAGR of 2.4% in the 1993-2000 period. Nevertheless, this indicator has weakened between 2000 and 2008, with a high AAGR of 3.1% —mainly due to increased consumption in the transport sector which in turn has decisively affected the trend in the domestic energy intensity over the same period—. As a result, energy intensity has shown a positive AAGR of 0.6% from 1993 to 2008 (see Table 3). Finally, energy intensity in the commerce and service sectors was slightly worsened in the 1993 – 2000 period, with a AAGR of 0.4%, while it was slightly improved between 2000 22 Mexico- Products I and II and 2008. In summary, this indicator was deteriorated at an AAGR of 0.2% between the years 1993 and 2008. Table 3. AAGR of energy intensity1/ by economic sector in Mexico. 1/ Including final energy consumption. Source: Own elaboration with data from INEGI (2010c) and SENER (several years). 2.3.3. Energy consumption per capita As shown in table 4, energy consumption per capita has grown at an AAGR of 0.8% over the 1990 – 2008 period, increasing from 42.1 GJ to 47.8 GJ —a 13% increase in this indicator of which the vast majority is linked to the increase of fuel consumption in the automobile sub-sector—. As for electricity consumption per capita3, it grew at an AAGR of 2.5% during the same period, increasing from 1,067 kWh to 1,825 kWh —a 71% increase in this indicator—. Table 4. AAGR of final energy and electricity consumption per capita in Mexico. Source: Own elaboration with data from SENER (several years) and CONAPO (2010). 3 Excluding transmission and distribution losses. 23 Mexico- Products I and II On the one hand, this substantial increase in electricity consumption per capita is largely a result of the electricity coverage in Mexico, which reached 97% of the population in the year 2008 —urban and rural zones have reached a coverage over 99% and 91.3%, respectively—, and on the other, the evolution of the Mexican economy towards a service based economy. 2.3.4. Primary energy consumption Figure 4 depicts the evolution of the national primary energy consumption (gross domestic energy supply) from the year 1990 to 2008 while Table 5 shows the AAGR by energy source for each analyzed period. It can be noticed that primary energy consumption first increased by roughly 66%, from 5,161 PJ in the year 1990 to 8,555 PJ by 2008, with an AAGR of 2.9% over the same period. Primary energy consumption has also been dominated by fossil fuels, even though there have been important inter-energy substitutions among these fuel types. Oil has been the most widely used energy source, with an AAGR of 1.2% over the same period, although its share fell from 56.7% in the year 1990 to 47.1% by 2008. 24 Mexico- Products I and II Figure 4 Primary energy consumption in Mexico, 1990-2008. Source: Own elaboration with data from SENER (several years). Natural gas has become the second most used primary energy source in the country and accounts for 38.3% of the total, with an AAGR of 4.9% between 1990 and 2008 —mainly due to its use in the electric power sector—. Fossil coal accounts for 4% of primary energy consumption, with an AAGR of 5.5 % over the same period —mainly due to its use in the electric power and in the iron and steel sectors—. Although nuclear power has been growing at a high AAGR, it still accounts for a small share of 1.2% in the year 2008. 25 Mexico- Products I and II Table 5 AAGR of primary energy consumption by energy source in Mexico. Source: Own elaboration with data from SENER (several years). As for renewable energies, these primary energy sources account for 9.4% of the total primary energy consumed in the year 2008. Figure 5 shows a breakdown of primary energy consumption in Mexico in the year 2008, especially renewable energies. It should be noticed that hydro is the first most important contribution of renewable energies in Mexico’s primary energy consumption and it accounts for 4.5% in the year 2008. In the 1990-2008 period, it grew at an AAGR of 4.3% for the sole purpose of power generation. 26 Mexico- Products I and II Figure 5 Primary energy consumption by source in Mexico, 2008. Source: Own elaboration with data from SENER (2009a). Thermal renewable energies, (i.e. firewood and sugar cane bagasse), is the second most important contribution of renewable energies in Mexico’s primary energy consumption. Accounting for 4% of the total —in spite of its AAGR of just 0.6%, it has contributed to some stabilization of firewood consumption in the residential sector due to increasing urbanization of the Mexican population, and to the use of bagasse in the sugar cane industry—. Other renewable energies for power generation, i.e. geothermal and wind power, altogether account for less than 1% of primary energy consumption, with an AAGR of 1.7%. It can be inferred from these figures that renewable energy (ER) use in Mexico has been mainly fostered for power generation, including the use of bagasse for self-supply projects in the sugar cane industry. However, this trend has been declining proportionally in such a way that it accounts for 19% of total primary energy consumed by this sector in the year 2008 while fossil fuels accounts for the remaining 81%. 27 Mexico- Products I and II 2.3.5. Primary energy production Figure 6 shows the evolution of primary energy production in Mexico. In the year 1990, fossil fuels and nuclear energy accounted for 92.3% of the total (7,451 PJ) while renewable energies represented the remaining share 7.7% (622 PJ). A breakdown of nuclear and fossil fuels shows that crude oil accounted for the biggest share, with nearly 72% (5,801 PJ) — out of which 48.2% was devoted to exports—. Gas production accounted for 18.3% (1,477 PJ) while coal represented just 1.8%. Finally, nuclear power accounted for just 0.4% of total primary energy production. As for RE, biomass production, including sugar cane bagasse and the traditional firewood, accounted for 3.9% (315 PJ) of the total, out of which both represented 1.0% (80 PJ) — mainly used to fire boilers in the sugar industry— and 2.9% (235 PJ) —mainly used by the residential sector—, respectively. Concerning electricity generated from ER, it accounted for 3.8% (307 PJ) of the total, with hydropower representing the biggest share 3.1% (252 PJ), and geothermal, with just 0.7% (55 PJ) of the total. In 2008, fossil fuels, nuclear and RE accounted for the same share as that of the year 1990. However, the breakdown changed, with crude oil decreasing its participation to 63% (6,612 PJ) — a 9% reduction, although exports still accounted for nearly 50% of the production—. In contrast, natural gas increased its share to 26% (2,746 PJ) —a 8% increase— while coal and nuclear power increased their participation to 2.2% (230 PJ) and 1.0% (107 PJ) of total primary energy production in México, respectively. 28 Mexico- Products I and II Figure 6 Evolution of primary energy production in Mexico, 1990 and 2008. Source: Own elaboration with data from SENER (several years and SENER 2010a). With regard to RE, in 2008 the share of biomass slightly decreased to 3.3% (345 PJ) of the total which is mainly attributed to a lower consumption of traditional firewood, reaching 2.3% (246 PJ), and to the stabilization of sugar cane bagasse production, which accounted for almost the same share of total primary energy production 1% (99 PJ). Electricity generated from RE accounted for 4.4% of the total, with hydropower increasing its share by 0.6%, from 3.1% to 3.7% (387 PJ), while geothermal accounted for almost the same share 0.7% (70 PJ). Finally, wind energy, which was first used in the year 1994, still accounted for a negligible 0.02% (2.5 PJ) of total primary energy production in México. 29 Mexico- Products I and II 2.3.6. Electric power sector energy consumption The country is virtually self-sufficient to meet its electricity needs which amounted to 1,034 PJ in 2008. It imported only 0.1% (1.23 PJ) of these energy requirements and even the balance of power exchange was positive, exporting abroad 0.5% of its total electric power generation. It can be observed that primary energy needs of the electric power sector have been growing at an AAGR of 3.2% over the 1990 – 2008 period and were increased by 74%, from 1,233 PJ to 2,151 PJ in the same period. As illustrated in Figure 7, in the 1990-2008 period fossil fuels have been the main primary energy sources in the Mexican electric power sector. However, there have been important inter-energy substitutions such as that of fuel oil, which accounted for 54% of total primary energy consumed in the year 1990 and has been reduced up to 20% by 2008. In contrast, natural gas has been the preferred fuel choice during the same time frame, increasing considerably its participation for power generation from 12% in the year 1990 to 44% by 2008. Coal also increased its role as primary energy from 6% in the year 1990 to 10% by 2008. Nuclear power also made some progress and increased its share by 2%, from 3% in the year 1990 to 5% by 2008. Finally, diesel fuel share was kept below 1% over the same period (see Figure 6). Figure 7 Electric power sector energy consumption, 1990 and 2008. Source: Own elaboration with data from SENER (several years). The use of renewable energies for power generation has been decreasing, although it still plays an important role. For instance, hydropower, the most used renewable energy source, has reduced its participation by 2%, from 20% in the year 1990 to 18% by 2008. 30 Mexico- Products I and II Geothermal also experienced the same trend and decreased its participation by 1%, from 4% to 3%. Finally, the utilization of wind energy for utility applications began in 1994 and its contribution was still negligible, with a share of 0.1% in the year 2008. 2.3.7. Installed power capacity by technology Figure 8 shows the evolution of the installed4 power capacity by technology in the Mexican electric power sector. As can be noticed, this capacity totaled 25,293 MW in the year 1990, with fossil fuel-fired power plants representing the biggest share (45%). Out of this capacity, 11,449 MW corresponded to fuel oil steam5 turbines, while combined cycle and natural gas turbines as well as coal-fired power plants accounted for 14% and 5% (1,200 MW) of the total, respectively. Finally, nuclear power plants accounted for nearly 3% (675 MW). In regards to renewable energy power plants, they accounted for 34% of the total installed capacity, out of which hydropower plants represented the biggest share, with 31% (7,804 MW), and the others (geothermal and wind farms) accounted for 3% (700 MW) of the total. 4 It refers to the installed capacity for public service. 5 Including diesel internal combustion power plants. 31 Mexico- Products I and II Figure 8 Evolution of the installed power capacity by technology in Mexico, 1990 - 2009. Source: Own elaboration with data from SENER (2010); CFE (several years). In 2009, the installed capacity totaled 51,558 MW, with fossil fuels-fired and nuclear power plants accounting for 76% of the total. Out of this capacity, steam turbines considerably reduced their share to 25.4% (13,111 MW). In contrast, combined cycle and gas turbines drastically increased their share to 38.7% (19,949 MW) —reflecting an energy policy, which started in mid 90s with the Reform to the Public Electricity Service Law (LSPEE), oriented towards the use of combined cycle technology—. As for coal-fired power plants, they increased their installed capacity (2,600 MW), but their share remained the same at 5% while dual fuel power plants (using either fuel oil or coal) accounted for 4% (2,100 MW). Finally, nuclear power plants increased their installed capacity (1,365 MW), but their share remained the same at nearly 3%. Thus, renewable energy power plants reduced their share to 24% of the installed capacity, with hydropower plants falling 32 Mexico- Products I and II to 22% (11,383 MW), while other renewables (geothermal and wind) had a reduced participation and accounted for 2% (1,050 MW). Avoided emissions attributed to renewable energy power generation Figure 9 illustrates the historical path of avoided emissions thanks to the use of renewable energies for power generation, under the assumption that the Mexican electric power sector was fully supplied by conventional thermal power plants. As it can be observed, in 1990 avoided emissions would have accounted for 25% of overall emissions, while this share would have been reduced by 4% in the year 2008 —although this reduction was more marked in intermediate years—. It is worth mentioning that avoided emissions are mainly due to the use of hydropower plants and to a lesser extent to geothermal and wind farms. Figure 9 Avoided emissions attributed to renewable energy power generation, 2008 - 2009. Source: Own elaboration with data from CFE (2009b), IPCC (2006), SENER (2008a; 2008b; 2009a). 33 Mexico- Products I and II 2.3.8. Final energy consumption In terms of final energy consumption, including the energy sector’s own use, the energy demand in Mexico totaled 4,148 PJ in the year 1990 and 5,932 PJ by 2008, representing a 43% increase at an AAGR of 2.1% over the same period. Figure 10 and Table 6 show the evolution of final energy consumption by sector during the 1990-2008 period as well as the corresponding AAGR for the following periods: 19902000, 2000-2008 and 1990-2008. Figure 10 Final energy consumption by sector in Mexico, 1990-2008. Source: Own elaboration with data from SENER (2010a). 34 Mexico- Products I and II As it can be observed, the transport sector is the largest consumer and it increased its participation from nearly 31% in the year 1990 to nearly 41% by 2008, with an AAGR of 3.7% in the same period. The automobile-subsector is the most intensive consumer and it accounted for 90% and 92% of the total between 1990 and 2008, respectively. The second largest consumer is the industrial sector, but it has been reducing its participation from nearly 26% in the year 1990 to ca. 23% by 2008, with an AAGR of 1.3% over the same period. The most energy-intensive industrial subsectors have been the iron and steel, petrochemical, chemical, cement and other branches. Nevertheless, it is important to note that the petrochemical industry fell sharply from 16% in the year 1990 to 2.1% of total energy consumed by the industrial sector in 2008. Consumption by the energy sector itself accounted for nearly 15% of total final energy consumed in the year 1990, but decreased its participation to nearly 14% by 2008, with an AAGR of 2.1% in the same period. Another energy-intensive consumer is the residential sector, however the sector participation has been reducing from 14.5% in the year 1990 to 13.1% by 2008. This is mainly attributed to the use of most energy-efficient household appliances in urban areas and to a decrease in rural population as a result of immigration —the latter having an impact on a lower firewood consumption—. Thus, this sector grew at an AAGR of 1.3% between 1990 and 2008. 35 Mexico- Products I and II Table 6. AAGR of final energy consumption by sector in Mexico. Source: Own elaboration with data from SENER (2010a). Sectors with the lowest consumption level are: agriculture, which grew at an AAGR of 2.6% and increased its share from 2.2% in the year 1990 to 2.4% by 2008; the commercial sector, which grew at an AAGR of 2.8% and increased its share from 2.0% to 2.1% over the same period; and lastly, public services, whose consumption has stabilized and remained in nearly 0.5% of the total, with an AAGR of 2.5%. Finally, it is worth mentioning that non-energy use has been decreasing from 8.8% in the year 1990 to 4.8% by 2008 —due to the stagnation of the petrochemical industry— which in turn led to a decreased AAGR of 0.9%. Figure 11 illustrates the fuel consumption by end-use energy sectors. It can be noticed that oil products accounted for the biggest share (60%) between the years 1990 and 2008 and grew at an AAGR of 2.4% over the same period. Natural gas is the second preferred fuel choice and its contribution remained almost steady during the same period (20.3% in 1990 and 19.6% in the year 2008), with an AAGR of 2.2%. On the other hand, electricity is the third most used fuel and increased its participation from 9.4% in the year 1990 to 12.4% by 2008, with a high AAGR of 3.9%. Carbon coke and coal were the least consumed fossil fuels, since together they accounted for 1.8% over the analyzed period, with an AAGR of 2.9%. Finally, the consumption of renewable energies, i.e. the traditional use of firewood in the residential sector as well as the sugar cane bagasse used to fire boilers in the sugar 36 Mexico- Products I and II cane industry, accounted for the fourth most preferred fuel choice, but at a reduced participation of 6% in the year 2008 —2% less than in the year 1990—, with a marginal AAGR of 0.7%. Figure 11 Final energy consumption by fuel type, 1990-2008. Source: Own elaboration with data from SENER (2010, several years). 2.3.9. Final energy consumption by sector Residential sector: Figure 12 shows the evolution in the residential sector’s final energy consumption by energy source in the 1990 – 2008 period. As it can be observed, the LP gas was the most used fuel in the year 1990 (42%), followed by the traditional firewood (39%), electricity (12%), natural gas (5%) and kerosene, with just 2% of the total. In 2008, LP gas consumption was reduced by 2% while that of traditional firewood and kerosene decreased to 33% —a 6% reduction— and 0.1%, respectively. On the contrary, there was a dramatic increase in electricity consumption and it accounted for 23% of the total, while natural gas experienced a 2% increase and reached a total share of 4%. Observed changes in these data are the result of an important increase in the electricity consumed by the residential sector due to, among other factors, the country’s higher electrification rate, which grew from 87% in the year 1990 (INEGI, 1991) to 97.3% by 2008 (CFE, 2010d), as well as to higher saturation of household appliances as suggested by the study carried out by Islas, et al. (2008). 37 Mexico- Products I and II Figure 12 Evolution of final energy consumption in the Mexican residential sector, 1990-2008. Source: Own elaboration with data from SENER (2010, several years). Commercial and public sector: Figure 13 shows the evolution of the commercial and public sectors final energy consumption by energy source in the 1990 – 2008 period. In 1990, the most used fuels were electricity and fuel oil, with 47% and 31%, respectively, followed by the LP gas, with 21%, and diesel, with just 1% of the total. In 2008, electricity consumption increased by 2% and it accounted for a total share of 49%, whereas fuel oil consumption totally disappeared from this sector’s consumption from the year 19996 onwards. In contrast, the LP gas considerably increased to 42% while diesel fuel slightly 6 This drop coincided with the entry into force in 1998 of the Standard NOM‐085‐ECOL‐1994 regarding more stringent regulations on fuel oil SO2 emissions coming from fixed sources; however, it does not fully explain such a drop, opening the possibility for a lack of information in this sector over that period (Islas, et al. 2008). 38 Mexico- Products I and II increased its share to 3% of the total energy consumed by this sector. Lastly, the natural gas, whose utilization started in the year 2002, and by 2008 it accounted for 6% of the total energy consumption. (see Figure 13). Figure 13 Evolution of final energy consumption in the commercial and service sectors, 19902008. Source: Own elaboration with data from SENER (2010, several years). Transport sector: Gasoline accounted for the biggest consumption of this sector —mainly by the automobile-subsector— and it represented nearly 66% in the year 1990 while diesel fuel and turbine fuel (kerosene) —mainly used in aviation— accounted for 25.5% and 5.6%, respectively. The least used fuels were fuel oil (1.6%), LP gas (1.2%) and electricity, with just 0.2% of the total. In 2008, gasoline’s participation remained almost the same, while diesel fuel increased to 26.3% —an increase of nearly 1%— and turbine fuel slightly decreased to 5.3% —remaining as the third most used fuel—. Fuel oil consumption was 39 Mexico- Products I and II dramatically reduced and it accounted for just 0.2% while the LP gas increased by half percent and accounted for 1.7%. Finally, electricity did not change its share. It is worth mentioning that natural gas has been used by this sector from the year 1999 and since then its demand is negligible and accounted for just 0.02% of the final energy consumed by this sector in the year 2008 (see Figure 14). Figure 14 Evolution of final energy consumption in the Mexican transport sector, 1990-2008. Source: Own elaboration with data from SENER (2010, several years). Industrial sector: This sector has become one of the largest energy consumers. With regards to its final energy consumption structure, in 1990, natural gas was the most used fuel, with slightly above 41%, followed by fuel oil and electricity which accounted for 24% and nearly 17%, respectively. Bagasse was the only renewable fuel used by this sector, with 6.6% of the total. Carbon and petroleum coke accounted for 6% while diesel fuel represented 4% of the total. The least used fuels by this sector were LP gas and kerosene, with a share of 1.4% and 0.2%, respectively. 40 Mexico- Products I and II In the year 2008, this energy consumption structure was changed. Natural gas accounted for a reduced share of 32% while fuel oil decreased to 6.2%. In contrast, electricity increased by more than 10% and contributed with 28.6% of the energy consumed by this sector. Bagasse consumption remained almost the same. Carbon and petroleum coke dramatically increased and they accounted for 18% of the total —mainly due to a considerable increase in petroleum coke by the cement industry and other branches— while diesel fuel remained almost the same. LP gas consumption was slightly increased to 3.2% whereas kerosene —barely used in the previous years— was not consumed in 2008. Finally, coal —which was first used by the cement industry in the year 2001— accounted for just 0.6% of the final energy consumed by this sector in the year 2008. Figure 15 Evolution of final energy consumption in the Mexican industrial sector, 1990-2008. Source: Own elaboration with data from SENER (2010, several years). Agriculture sector: Diesel was the most used fuel by this sector in the year 1990 and it accounted for 65% (60 PJ) while electricity represented the second most used fuel, with 41 Mexico- Products I and II 26% (24 PJ). Other used fuels were kerosene and LP gas and represented 7.3% (7 PJ) and 1.6% (2 PJ) of total energy consumed by this sector, respectively. In 2008, diesel kept its role as the most used fuel by this sector and increased its share to 76% (110 PJ) while electricity consumption was reduced by 6% and accounted for 20% (29 PJ). As for least used fuels, the LP gas increased its share to 3.8% (5 PJ). It is worth mentioning that kerosene was barely used in this year and accounted for just 0.03% (0.04 PJ) of the final energy consumed by this sector (see Figure 16). Figure 16 Evolution of final energy consumption in the Mexican agriculture sector, 19902008. Source: Own elaboration with data from SENER (2010, several years). 42 Mexico- Products I and II 2.3.10. Limitations on the current energy pattern and renewable energy perspectives in Mexico. This energy consumption pattern seems to have reached a crossroads in Mexico’s current energy situation. Proven oil reserves have fallen significantly as national production decreases every day —mainly due to the decline of its major oilfield, Cantarell, which at currently produces 35% of total production (SENER, 2010a)— and to the low success rate in the discovery of new oilfields needed to increase its production capacity. Furthermore, as already explained, national energy consumption has not yet decreased significantly. This fact has led to a situation where Mexico’s proven oil reserves are estimated to last only 10.8 years at current production rates, and it may become an energy importer in the midterm, which in turn would result in a trade imbalance with abroad. Additionally, this situation threatens Mexico by provoking an unprecedented crisis in the state budget, since roughly 25% of the federation revenues come from oil revenues (Petróleos Mexicanos, 2010) and these have already been reduced. Moreover, the state crisis may turn into a profound economic and social crisis due to the importance that oil revenues and its derivatives, as major energy inputs, have at the macroeconomic level. This forecast also opens the possibility that energy subsidies, which are currently supported by the Mexican state, become unsustainable, imposing a major burden on the economic system and people’s daily life. On the environmental front, the Mexican energy system emits 430 million tonnes of CO2equivalent, placing Mexico as the thirteenth largest emitter of CO2 worldwide (Comisión Intersecretarial de Cambio Climático, 2009). Out of this total, emissions from power generation account for 26% (112.46 million tonnes of CO2equivalent). Given this emissions level, it is very likely that the country will be subject to significant international pressure to limit its CO2 emissions. Similarly, this energy pattern has contributed to an increased local pollution, deteriorating soils, rivers, forests and marine areas. This is due to the extensive use of hydrocarbons over all different stages —production, transport, transformation and distribution— and to the emission of local pollutants such as NOx, SOx and particulate matter, ranking the country as number 43 in the Environmental Performance Index —below other less developed economies such as Ecuador (ranked 30th) or Cuba (ranked 9th ) (Yale University, 2010)—. It is expected that along with international pressure to reduce greenhouse gases emissions, there will be others increasingly important factors to pressure change the energy patterns, such as the increasing internal demands of ecologist groups, the claims of society to offset environmental damages caused by conventional energy sources, political agendas and the establishment of more stringent environmental regulations. 43 Mexico- Products I and II On the other hand, this energy pattern has been accompanied by the consolidation of a structure of public monopolies in the Mexican energy sector, namely: Mexican Petroleum (PEMEX) in the field of hydrocarbons and the Federal Electricity Commission (CFE) in the electric power sector (process which was strengthened with the recent closure of the utility Central Power and Light Company). This monopoly structure has fostered a centralized generation power system which is essentially based on large power stations. As a result, distributed power generation systems, that are smaller in size and with high potential to directly promote social, productive and regional development through the use of local or regional renewable energy resources, face important difficulties to pave the way in Mexico. Mexico’s response to this problem has been inadequate. As we have seen already, since the early 90s the Mexican energy sector increased the use of natural gas (INEGI, 2010d; SENER, 2010a) due to its lower emissions and higher efficiency for use in combined-cycle power plants. However, this boom in the demand for gas has brought negative consequences such as contributioning to a foreign trade imbalance —as a result of increased gas imports to meet the demand— and a significant energy dependence. According to data of the Natural Gas Market Outlook (8), there will be a trade balance deficit in the 2008 - 2024 period that would amount to 899 million cubic feet per day (MMcfd) in the year 2011 and 2,514 MMcfd (30% of the gas consumed in Mexico) at the end of the study period. According to the US Department of Energy, international natural gas prices will rise up to 8.05 dollars per million of BTU by 2030 (SENER, 2009b). At these prices, for instance, the expansion of the Mexican electric power system, but based on renewable energies, would be more cost effective (Islas et al., 2003). The problem of such unsustainable energy pattern in Mexico makes imperative and indispensable its substitution for an energy pattern that favors and boosts the country’s sustainable development. In this view, renewable energies (ER) represent the most important alternative for Mexico, since there are plenty of these resources (SENER, 2005) as shown in table 7. 44 Mexico- Products I and II Table 7. Estimated potential of renewable energies in Mexico (1) Wind energy potential was only evaluated for the state of Oaxaca. Although there is still too much to be done in renewable energy resource assessment, and due to the fact that current data are just partial estimates, we can certainly mention that the country has an average daily insolation of 5 kWh/m2 —an enormous potential for solar energy in relation to current energy needs—. There is also a huge potential for wind energy, since the estimates for a single state, Oaxaca, indicate that it is possible to install up to 33,000 MW of power capacity. The feasible potential for geothermal energy has been estimated in 11,940 MW and there is still an important potential to be used, since geothermal energy totals 964.5 MW of the total installed power capacity so far. As for the assessment of bioenergy potential, it ranges from 3,035 PJ/year to 4,550 PJ/year, which would represent between 54% and 81% of the 2002 gross domestic energy supply. With regards to hydro resource, estimates point out that there is a potential of 3,250 MW in mini-hydro projects, while an additional 49,750 MW in conventional hydro projects can be seen—11, 050 MW or 22% of the total potential have been used so far —. As can be noticed, this resource has been underused. It is interesting to note that there has been increasing investments in renewable energy power plants in recent years, although they do not surpass those made in conventional power plants. For example, out of the total investments made in the year 2008 (1,056 million dollars), including both public and private investments, 40% (420 million dollars) was allocated to renewable energy projects, especially public investments in conventional hydropower plants. It will be necessary to keep an eye on this matter in the following years in order to determine whether or not it is the beginning of a new trend for renewable energy utilization in Mexico. 45 Mexico- Products I and II With regards to financing of Research, Development and Implementation of demonstration projects (I+D+I), even though it is now possible to identify national funds and budgets allocated to national research and technology development institutes in the field of renewable energies, these resources are still limited —out of the total allocated to energyrelated projects, in the best case, only 6% are spent on I+D+I for renewable energies—. 2.4. Institutional and legal framework for renewable power generation. Mexico’s institutional and legal framework has given incremental steps towards energy transition by starting the utilization of large-scale renewable energy applications, especially for power generation. The institutional and legal breakthrough was seen in the 2008 energy reform. 2.4.1. Institutional framework The organization of the electric power sector is illustrated in Figure 17. Ministry of Energy (SENER) According to the Organic Law of the Federal Public Administration (LOAPF) (DOF, 2008b), the Ministry of Energy is responsible for the following issues on electricity matters: a) Conducting the country’s energy policy as well as supervising its fulfillment with emphasis on energy security and diversification, energy conservation and the protection of the environment. b) Exercising the rights of the nation to use goods and natural resources for power generation, transmission, distribution and the supply of electricity for public service; c) Conducting parastatal entities whose activities are related to the generation of electricity …and nuclear energy in conformity with the applicable provisions; d) Promoting the participation of private investors in sector’s activities in terms of legislation and applicable provisions; e) Conducting the medium and long term planning as well as establishing economic and social directives for the parastatal energy sector; f) Granting concessions, licenses and permits in electricity matters in conformity with the applicable provisions; g) Regulating and promoting the development and use of alternative energy sources as well as proposing, where appropriate, the corresponding incentives; 46 Mexico- Products I and II h) Conducting and promoting research and studies on energy conservation, structures, costs, projects, markets, prices and tariffs, assets, procedures, rules, standards and further energy-related aspects as well as proposing, where appropriate, the corresponding actions. Figure 17. Organization of the electric power sector in Mexico. Source: Own elaboration with data from SENER (2001). Ministry of Finance and Public Credit (SHCP) According to the LOAPF (DOF, 2008c), this ministry is responsible for “establishing and revising prices and tariffs of goods and services of the federal public administration, or else setting the basis to fix them, while taking into account the opinion of the Ministry of Economy and those of the corresponding agencies”. Energy Regulatory Commission (CRE) 47 Mexico- Products I and II According to the Law of the Energy Regulatory Commission (DOF, 2008c) this body has the following attributions in electricity matters: a) To participate in the determination of tariffs for the supply and sale of electricity; b) To approve the terms and conditions for establishing the contributions that the states, municipalities and consumers of the public service of electricity must pay for the construction, extension or other modifications of specific projects; c) To verify that the provision of the electricity to be used as public service is acquired from the least-cost option, while offering optimal stability, quality and security to the national electric power system; d) To approve methodologies for calculating applicable rates during the acquisition of the electricity intended for public service; e) To approve methodologies for calculating applicable rates for the provision of transmission, transformation, and delivery of electricity services; f) To express an opinion, at the request of the Ministry of Energy, on the following issues: formulation and monitoring of the Energy Sector Program; addition and replacement of power capacity for the national electric power system; the advisability of project execution either by the Federal Electricity Commission or by individuals, and, where appropriate, the terms and conditions applicable to calls for tender and bid documentation; g) To grant and revoke permits and authorizations that, in accordance with applicable laws, are required to carry out regulated activities; h) To approve standard agreements and adhesion contracts for the provision of regulated activities; i) To issue general administrative rules applicable to individuals who carry out regulated activities; j) To propose to the Ministry of Energy updates on the energy sector legal framework, and to participate with the competent agencies in the formulation of law initiatives, decrees, regulations and Mexican Official Standards for regulated activities; k) To process and publish statistics on regulated activities; l) To act as mediator or arbitrator for settling disputes of regulated activities; m) To conduct verification visits as well as requesting the submission of information; to direct individuals, who carry out regulated activities, to appear before the CRE with the goal of supervising and monitoring, within its competence, the compliance with legal provisions applicable to regulated activities; 48 Mexico- Products I and II n) To impose administrative sanctions in accordance with articles 40 and 41 of the Public Electricity Service Law. Federal Electricity Commission (CFE) It is the only parastatal entity and generates, transmits, distributes and trades the electricity intended for public service. CFE is a decentralized public body with its own legal personality and patrimony (DOF, 1992; CFE, 2010a). National Energy Control Center (CENACE) The National Energy Control Center is responsible for the electricity dispatch, operation and control of the National Interconnected System (SEN), following quality and economic efficiency criteria (CFE, 2010b) as well as dispatch and operation rules of the SEN, which constitute the mandatory rules for all participants of the SEN (Meraz, 2009). Modalities for the involvement of the private sector in generation activities According to SENER (2009d), and as established by the LSPEE and its ordinance, the modalities under which private sector can apply for, and where appropriate, obtain permits for power generation and power imports, are the following: Independent Power Producer refers to power plants with an installed capacity larger than 30 MW for the sole purpose of selling the energy and capacity to the CFE or for export purposes. Small Power Producer refers to power generation intended for: a) The sale of all generated power to CFE, but without exceeding a total capacity of 30 MW within a limited area by either a single or several individual projects. b) Power generation to supply the own needs of either small rural communities or isolated areas where electricity service is not available, but without exceeding a capacity of 1 MW by an individual project. c) Power exports within the limit of 30 MW. Self-supply refers to power generation intended to supply own needs of individuals or entities provided that there is no inconvenience for the country. Cogeneration.a) Is the production of electricity together with steam or other secondary thermal energy, or both; b) Is the direct or indirect production of electricity from fuels produced in the corresponding processes. 49 Mexico- Products I and II This modality requires that the electricity produced be used to supply the needs of all facilities associated to the cogeneration project, namely: a) Individuals or companies that use or produce the steam, thermal energy or fuels, originating the processes for cogeneration, or; b) Individuals or companies as co-owners or members of the constituted project society. Imports.- Is the purchase of electric power generated from power plants, located abroad, which are constituted under the legal acts concluded directly between the electricity supplier and the consumer. Exports.- Refers to power generation intended for export purposes under cogeneration, independent and small power production modalities provided that they comply with the corresponding laws and regulations applicable to each kind of project. Permit holders under this modality cannot alienate the generated power within national territory unless a permit for the corresponding activity is granted by the CRE. Usos propios continuos.- Refers to all permits granted to several public sector entities before the 1992 LSPEE reform, but are still in operation (SENER, 2006). 2.4.2. Legal framework Law for the Promotion and Development of Biofuels The initiation of this process was the enactment of the Law for the Promotion and Development of Biofuels (LPDB) in early 2008 (DOF, 2008a) and the publication of its ordinance in the year 2009 (DOF, 2009a). This law regulates the promotion and development of biofuels with the aim of achieving energy diversification and sustainable development as well as creating adequate conditions to the Mexican rural sector; it provides the basis for: • Promoting and developing biofuel use as a key element to help achieve national energy self-sufficiency; • Promoting biofuel input production derived from agricultural activities; • Advising agribusiness for the installation of agricultural processing plants to be used for the production of ethanol and other biofuels; • Promoting and fostering the production and development of biofuels as automotive fuels; • Fostering the production, distribution and commercialization of biofuels from biomass; • Providing the technical and budgetary support for the development of biofuels; • Fostering the creation of biofuel production chains; 50 Mexico- Products I and II • Supporting the production, modernization, marketing and utilization of biofuels; and • Contributing to rural development of the country by establishing measures to boost productivity and competitiveness through energy diversification. It further establishes that the Federal Government, in coordination with state governments and municipalities, will promote policies, actions and programs aimed at promoting the use of biofuels. Similarly, the executive branch, through the Ministry of Energy and other agencies of the federal public administration, will deal with these issues, granting priority to regions and zones with social and economic problems with the aim of boosting the production, generation, use and deposition of biofuels and their associated inputs. This Ministry also has the authority to conclude coordination agreements with the state governments and the Federal District, taking into consideration, if necessary, the participation of municipalities in their respective area of competence. Law for the Use of Renewable Energies and Financing of Energy Transition On November 28th, 2008 (DOF, 2008d) the most important step towards RE utilization — for general purposes and especially power generation— in the Mexican sector was taken through the publication of the Law for the Use of Renewable Energies and Financing of Energy Transition (LAERFTE). In accordance with its first article, the goal of this law is “…to regulate the use of renewable energies and clean technologies for power generation in different purposes than those of public service; to establish a National Strategy and the instruments for financing the energy transition”. The scope of this law sets out that “the use of renewable energy sources and clean energy technologies is a public matter and will be carried out within the framework of the National Strategy on Energy Transition by which the Mexican government will promote energy efficiency and energy sustainability as well as a reduction in the dependence on hydrocarbons as a primary energy source”. This law includes two important provisions, on the one hand, it deals with the regulation of legal modalities (private and social sectors) not regarded as public service for renewable energy-based power generation, and on the other, with the creation of an energy transition fund intended to become a promotion mechanism for FRE, other sources regarded as “clean energy” and the rational use of energy and energy savings, i.e. the sustainable use of energy. This law mandates the SENER to elaborate and coordinate the Special Program for the Use of Renewable Energies (PEAER), including specific objectives and goals for renewable energy participation in the energy system and in the electric power sector, respectively 51 Mexico- Products I and II (SENER, 2009e). It also mandates the SENER the publication of a National Strategy for Energy Transition and the Sustainable Use of Energy aiming at fostering policies, programs, actions and projects intended for a more intensive utilization of renewable energies, clean technologies and a rational use of energy. This strategy shall be included in the Federal Expenditure Budget by means of a Fund for the Energy Transition and the Sustainable Use of Energy. Finally, the SENER will update this strategy every year. The first version of this strategy was published by the SENER (2009f) in August 2009 and it included all of the federal government’s programs on energy efficiency and renewable energy utilization, which in fact were already in operation. It also set out that the 2009 Federal Expenditure Budget allocate resources to these programs in the amount of 4,309 million pesos. Simultaneously, a reform to the organic law of the Federal Public Administration (APF) (DOF, 2008b) was passed; it mandates the SENER to present a National Energy Strategy over the next 15 years, subject to ratification by the legislative power. The first version of this strategy (SENER, 2010b) was presented and ratified by the legislative power in the year 2010. This version aims at achieving a share of 35% of the electric power capacity by means of clean energies. However, it is worth mentioning that there is no specific target for renewable energies. Law for the Sustainable Use of Energy Another important result of the 2008 energy reform was the approval of the Law for the Sustainable Use of Energy (LASE) (DOF, 2008d) and the publication of its ordinance in the year 2009 (DOF, 2009c). The purpose of this law is “…to favor the sustainable use of energy through its optimum use along all processes and activities, from its exploitation to its consumption.” (DOF, 2008d). It fosters indirectly the use of RE, since the definition of energy efficiency, contained in this law, states that “it is also included… the substitution of non-renewable for renewable energy sources” (DOF, 2008d). This law also mandates the National Commission for Energy Efficiency (CONUEE), a decentralized body of the SENER, to present a National Program for the Sustainable Use of Energy (PRONASE) one year after the publication of the law and “…will be in force over the current federal government administration” (DOF, 2009d). This program was published in the DOF by the end of the year 2009 (2009d) and set out actions over the 2009-2012. Public Electricity Service Law The legal framework for the development of electric power generation in the Mexican sector was established by means of the Amendment to the Public Electricity Service Law 52 Mexico- Products I and II of December 1992 (LSPEE) (DOF, 1992). It allowed for private sector participation in cogeneration, self-supply, small power production, independent power production, import and exports of projects. However, none of these newly allowed modalities can supply electricity for public service, since this activity is constitutionally reserved to the nation through a public utility, the Federal Electricity Commission (CFE). The temporary use of the national transmission system by permit holders, so called "porteo", is also allowed by this law. This law also establishes in the third article of its transitory provisions that “with the aim of providing a better and more efficient service for energy regulatory issues within the competence of the SENER (the former Secretaría de Energía, Minas e Industria Paraestatal) the Executive Power will establish a Regulatory Commission as a decentralized body of the aforementioned entity”. This was carried out by means of a Decree on the establishment of the Energy Regulatory Commission (CRE), published in the DOF (1993a). In order to transform its role to that of an empowered regulator, the Law of the Energy Regulatory Commission was issued on October 31st, 1995 by means of a Decree (DOF, 1995), and included regulatory instruments on electricity and gas matters. It also granted the CRE technical and operational autonomy, maintaining however, jurisdiction of the SENER, and transforming it into an independent regulator. In electricity matters, the law defines the following activities subject to regulation: “a) supply and sale of electricity to public service customers; b) private sector generation, export and import of electricity; c) acquisition of electricity for public service; and d) transmission services between agencies that provide public service and generation, export and import permit holders” (DOF, 1995). Its resolutions are inscribed in the Public Register of Regulated Activities. Additionally, the CRE was empowered to issue general administrative requirements such as general criteria, directives and methodologies to be followed by individuals performing regulated activities. CRE’s Regulatory instruments for renewable energy power generation In 2001, the CRE issued a series of regulatory instruments related to renewable energy power generation such as the Resolution Nr. RES/140/2001, published in the DOF on September 7th, 2001 (DOF, 2001). This resolution includes a Standard Interconnection Agreement for Renewable Energy Power Generation between a permit holder under the self-supply modality and the public utilities (CFE y LyFC7). This agreement sets out the rules for the purchase and transmission of electricity produced from renewable energies, 7 This utility was extinguished in the year 2009. 53 Mexico- Products I and II taking into account their intermittent nature. The resolution was amended several times within a year (DOF, 2003; 2004) regarding the definition of renewable energy, clarifications on the methodology for transmission charges and several modifications to the interconnection agreement. On January 30th, 2006, Resolution Nr. RES/007/2006 (DOF, 2006) was published, replacing the old RES/140/2001, and amendeding several provisions concerning renewable power generation. On April 4th, 2007 (DOF, 2007a) the purchase and sale agreement for small power producers was published ,connecting them to the national electric power system, and opening a real possibility for investments on RE under this modality. In the same year Resolution Nr. RES/192/2007 (DOF, 2007b) was published and it amended several provisions of the interconnection agreement. These modifications were intended to facilitate the participation of municipalities and federal entities in RE projects under the self-supply modality, as stated in the following paragraph added to the first clause concerning the agreement’s purpose “this agreement is applicable to permit holders generating electricity from any kind of intermittent or non- intermittent renewable energy for the sole purpose of supplying electricity to either municipalities or federal entities”. Self-supply with renewable energy In summary, during the 2001-2007 period the CRE issued the following instruments aiming at fostering renewable energy utilization, with special emphasis on the self-supply of municipalities, federal entities and Government: -Methodology for transmission service charges -Standard interconnection agreement -Transmission service and sale of excess power agreements It is important to note that this regulatory process takes into account the intermittent nature of the electricity produced from RE by adding several clauses related to a procedure for calculating the corresponding payments between both parties (calculation of excess power, non-delivered power and complementary power). Furthermore, it encourages the participation of permit holders for the sole purpose of supplying electricity to municipalities, federal entities and government. 54 Mexico- Products I and II The scope of such regulatory instruments is wind, solar and hydropower, the latter being only applicable to water resources with storage or limited availability. These instruments also allow permit holders to take their power from the interconnection point to the consumers’ facilities through the transmission system operator. Previous regulatory instruments for RE did not recognize their capacity contribution to the peak hours of the SEN. Therefore, the CRE made some adjustments to the Standard Interconnection Agreement for Renewable Power Generation by calculating the so called “Self-supplied capacity” as an average of the power measured at the interconnection point over a 12 measurements interval within the peak hours for every working day of the corresponding month. This self-supplied power allows permit holders to reduce the fee for billable demand charged to their consumption centers. It also proposes that power exchange, which is currently calculated on the basis of the Short-term Total Cost (CTCP), is carried out by means of the variable fee of electricity tariffs with the aim of providing more transparency to the amount of energy exchanged between the permit holder and its associates. In this period a clear intention of the CRE to foster the Small Power Producer modality can be seen, which has an important potential for the use of RE, by publishing a purchase and sale agreement applicable to small power producers connected to the national system (DOF, 2007a). The lack of such a regulatory instrument hindered the potential for RE projects under this modality. Net metering The net metering system was established in Mexico in June 2007 by means of the “Standard Interconnection Agreement for Small-scale Solar Systems” (DOF, 2007c). The main feature of this agreement is the possibility for household and commercial (connected to low voltage grids) users to install solar systems with a capacity of up to 10 kW and up to 30 kW, respectively. Furthermore, a metering system was established in which a deduction of any energy outflows from metered energy inflows is made. This interconnection agreement especially allows household users, who own a photovoltaic system, the possibility of implementing the accounting procedure for billing purposes. Thus, power consumption (in kWh), incurred by the Generator (household user), is calculated as the difference between the power delivered by the Supplier (CFE) and the power fed by the Generator to the Supplier. When this difference takes a negative value, the Generator receives a credit that can be offset within the next 12 months. If no compensation is used, the credit is then canceled and the Generator renounces his right to receive a payment for this concept. On the other hand, when the difference is a positive 55 Mexico- Products I and II value, the Supplier receives a credit that is charged in accordance with the tariffs established in the agreement. New regulatory resolutions for RE utilization. In order to comply with the new provisions contained in the recently passed LAERFTE, in the year 2010 two resolutions were issued: the first one established a regulatory framework for permit holders, who operate small-scale RE projects, and the other issued a standard interconnection agreement between private-owned hydropower plants, with a capacity larger than 30 MW, and the supplier (CFE). The LAERFTE “grants several attributions to the Ministry of Energy (SENER) and to this Commission with the goal of promoting and regulating, among others, the utilization of renewable energy sources, except for hydropower plants with an installed capacity above 30 MW” (DOF, 2010b). Regulation and promotion of small to medium-scale RE. Standard interconnection agreements for renewable energy power plants under the modalities of export, small power production with capacity and energy payments and independent power producers are subject to the directives established in the newly issued resolution RES/169/2009 (DOF, 2009e). It is important to highlight that no previous agreements on this matter were available to regulate the operation of this kind of projects. In 2010, the CRE issued the resolution RES/054/2010 (DOF, 2010a), replacing the old standard interconnection agreement for small-scale solar systems by an extended version that includes other renewable sources and cogeneration. Likewise, this resolution contains a standard interconnection agreement for renewable energy and cogeneration plants with a capacity up to 500 kW (medium-scale). It also defines a billing system methodology for permit holders. Standard interconnection agreement for hydropower plants above 30 MW The resolution RES/065/2010 replaced the Standard Interconnection Agreement for Renewable Energy, including other related regulatory instruments such as the transmission service models and the calculation methodology for transmission service charges, but only applicable to hydropower plants with a capacity larger than 30 MW. Finally, the recently issued resolution RES/067/2010 (DOF, 2010c) establishes the standard interconnection agreement for renewable energy and efficient cogeneration plants as well as the standard transmission services agreement. Although this resolution is 56 Mexico- Products I and II intended to regulate all kind of permit holders, it is mainly focused on the regulation of renewable energy and cogeneration projects for self-supply purposes. Studies and permits for power generation requested by the CRE. The interconnection of power facilities to the transmission and distribution networks of the National Interconnected System (SEN) makes it possible to develop power generation projects at sites where renewable resources are abundant —e.g. locations with good wind resources or insolation, small hydro resources, landfills, and sites where agricultural or forest by-products are accumulated—. This power can be used to supply the needs of coowners placed at different locations (CONAE, 2006). In order to develop the aforementioned RE projects, it is necessary to comply with the following studies and permits: Interconnection feasibility study. In order to interconnect a power plant to the National Interconnected System, it is first necessary to evaluate the feasibility of such interconnection by considering not only the impact that it has on the system, but also the system capacity to provide the transmission, backup and ancillary services required for the adequate operation of permit holders’ power plants. This is a non-mandatory procedure, but it is advised to be conducted prior to any other study or procedure —even at the same time with the transmission service study—. Transmission service study. For any project requiring power transmission services, or in other words, having a need to transmit power through CFE’s transmission network for the purpose of supplying its power requirements at different locations, it is necessary to carry out a study intended to calculate the transmission service costs that will be paid for to the supplier ($/kWh). General requirements for a power generation permit. The application procedure for a power plant with a capacity over 0.5 MW is carried out under general and particular requirements applicable to each of the modalities that are not regarded as a public service, namely: self-supply, cogeneration, independent power producer, small power producer and power import and export. According to the CRE (2010b), the following are general requirements applicable to a permit application under the above mentioned modalities for renewable energy projects: a) Filling out of a standard form, including the following information: project name, legal name of the company and applicant’s address, permit purpose; project location, capacity, consumption centers and individuals using generated electricity; 57 Mexico- Products I and II energy source, information on national water use, where applicable; availability of excess power and back up and transmission service requirements, where applicable. b) Documents accrediting the legal existence of the applicant. Companies are required to submit a certified copy or attested incorporation papers. c) Documents accrediting the capacity of the legal representative. A legal document granting permission to follow the permit procedures. d) A copy of the document accrediting the ownership, tenure or authorization to use the land where the facilities will be installed. e) A Project description document, including: power plant and design characteristics of associated facilities; distribution of loads; interconnection and load points; capacity factor; average monthly demand, estimated annual power generation and fuel consumption. f) If applicable, information on water use. The applicant is required to submit the following documents: a copy of the corresponding license title, a copy of the document accrediting the beginning of the procedure before the corresponding authorities. g) Information on the fulfillment of ecological standards. The applicant is required to submit documents such as: a copy of the authorizations for power plant installation; and/ or a copy of a document accrediting the beginning of the procedures required to obtain the authorization from federal authorities. Here, it is required the elaboration of the Environmental Impact Statement (MIA) before SEMARNAT’s local or regional entities (CONAE, 2006). h) Descriptive technical memory, including detailed information on the elements described in e). Particular requirements for power generation modalities. Self-supply.- Applicants are required to submit documents regarding project’s expansion plans, including the name of future associates or co-owners, where applicable. A statement letter, indicating that applicant assumes the responsibility for delivering all excess power available to the supplier8, is also required. In cases where several parties are interested in self-supplying from the same power plant, it is required to show evidence that all of them are either co-owners of the plant or legally constituted as a self-supply society in accordance with article 6 of the LSPEE (DOF, 1992). 8 The term supplier refers to the Federal Electricity Commission; it also referred to the Central Light and Power utility, but it was extinguished in the year 2009. 58 Mexico- Products I and II Cogeneration.- Besides the permit application form, applicants are required to submit the following documents: when a society was expressly constituted to get a permit, the purpose of the society must be “power generation under a cogeneration modality…” (CRE, 2010b); in such a case, a certified copy of the agreement concluded between the applicant and the process operator is required; this document must provide information on the processes which requires the combined use and the way they will take advantage of the generated energy; calculation report of the overall process efficiency, including process diagrams, thermal balances, and evidence supporting an improved economic and energy efficiency; a document providing daily data on expected electricity generation and excess power available in the form of monthly and annual reports; a statement letter, indicating that applicant assumes the responsibility for delivering all excess power available to the supplier; a list of all associated facilities to the cogeneration process as well as the names of all individuals or companies which originates the process; this list shall only include to those individuals or companies fulfilling with the provisions established in the LSPEE and its ordinance; and the load distribution and location of the associated facilities that will consume the generated electricity. Independent Power Producer.- In addition to the general requirements applicable to this generation modality, applicants are required to submit the following documents: in the case of export power, a certified copy of the agreement concluded between the buyer abroad and the applicant of a permit; if power is delivered to the supplier, a copy of a document stating that project facilities are included or similar to those foreseen within its expansion plans. Small Power Producer.- Applications for power plants with a capacity of less than 30 MW and intended for export purposes do not require additional documents. However, for applicants intending to supply electricity to small rural communities or isolated areas with no access to electricity, the following documents are required: a certified copy of the legal document attesting the constitution of either a consumer cooperative, co-ownership, association or civil society or a self-supply cooperation agreement; and a certified copy of all agreements concluded with all consumers using the electric power, including the conditions under which such power will be delivered. Export.- Applicants are required to submit a certified copy of the agreement or a letter of intention between the buyer and the applicant. Import.- Any party interested in obtaining a permit under this modality is required to fulfill with the following additional requirements: a drawing of the transmission lines that will be built by the applicant, indicating the point of interconnection with the SEN; certified copy of the letter of intention between the applicant and the electricity supplier abroad; a document indicating the conditions and terms under which the permit holder would request the service to the electricity supplier if import power activities were finished. 59 Mexico- Products I and II Permitting procedures for power generation. According to the CRE (2010b), the standard procedure for obtaining a permit consists of the following steps: 1) Clarification meeting.- Before submitting any documentation, the applicant may held several meetings with CRE’s authorities with the aim of clarifying any question regarding how to fill out the standard application form or what additional documents should be submitted. 2) Submission of the application form.- The applicant is required to submit the original standard application form, and two copies at the Commission Filing Clerk. 3) Application review checklist.- Once the application has been submitted, the CRE will review that the application includes all information and required documents. The review is made within 10 working days. In the case of applicant’s omissions, the CRE will inform the applicant of this situation so that the information can be gathered and duly submitted. 4) Notification of application acceptance.- The CRE will inform the applicant of the acceptance within 10 working days after the completion of the standard form by means of an official document indicating that it has been accepted for processing. 5) CFE’s opinion statement.- Once the application has been accepted for processing, the CRE sends a copy of both the application and file to the CFE for its analysis and opinion. The CFE is required to issue an opinion on the application within the next 30 working days, except in the case of small power producers where it is required to be issued within 10 working days. This opinion statement is not mandatory for the CRE. When this statement implies amendments or project restrictions, the CRE will inform the applicant who is expected to fix a position about it. 6) Commission analysis.- the CRE analyzes the application form simultaneously with CFE’s opinion statement. It reviews the validity of all submitted instruments and their fulfillment with the established requirements. To this end, the CRE takes into account the opinion of CFE and evaluates the project on the basis to the extent it contributes with the objectives of the National Energy Policy established by the SENER. 7) Amendments and descriptive-technical memory.- If any of the documents or information submitted does not meet with the required elements, the applicant is requested to either provide further information or modify its application up to the 60 Mexico- Products I and II successful fulfillment of the requirements. When all submitted information does not provide the necessary elements for evaluating the project, the CRE will require a descriptive- technical memory. The applicant is required to make the amendments indicated by the CRE within the next 10 working days after the request. If the applicant does not submit the aforementioned amendments, the CRE will then deny the permit. 8) Resolution and permit granting.- The CRE will review the amendments made by the applicant, and where applicable, a descriptive-technical memory within a period no longer than 30 working days after the submission of the required adjustments; the CRE will determine whether or not to accept the application, and if so, it will grant a permit. Standard agreements before the CFE Once the corresponding permits have been obtained, in accordance with the power generation modalities allowed by the LSPEE and its ordinance, it is necessary to conclude the interconnection, purchase and sale, transmission and backup services agreements with the supplier. Standard interconnection agreement.- The purpose of this agreement is to interconnect the power plant (permit holder), and if necessary, one or more end user facilities to the National Interconnected System (SEN), as well as to establish general provisions for the legal acts undertaken by involved parties in the generation, and where appropriate, the power transmission (permit holder and supplier) (CONAE, 2006). Transmission service agreement.- If the permit holder requires the system to carry the generated power from the plant to the end user facilities, it is then necessary to request transmission services, in which case the supplier will carry out the corresponding feasibility studies by taking into account the location and characteristics of the end user facilities as well as the energy source used by the permit holder. If considered feasible, both the supplier and permit holder conclude an agreement in accordance with the provisions established in CRE’s Transmission Methodology, where the corresponding charges for transmission services are authorized (CONAE, 2006). 2.4.3. Institutional framework for Clean Development Mechanism in Mexico The Clean Development Mechanism (CDM), as defined in Article 12 of the Kyoto Protocol, is intended to create a least-cost option by which Annex I countries can comply 61 Mexico- Products I and II with their quantified emission limitation and reduction commitments (greenhouse gas emission caps). Furthermore, it intends to create a new financial mechanism for nonAnnex I countries with the aim of contributing to sustainable development. In the international context, the Executive Board (EB) of the United Nations regulates all procedures related to the acceptance of a CDM project and to the issuance of the corresponding Certified Emission Reductions (CERs). Mexico signed and ratified the Kyoto Protocol as a non-Annex I country and, therefore, does not have mandatory reduction commitments, but it must elaborate a report on greenhouse gases emitted by the country as well as to propose voluntary reduction goals. As of April 25th, 2005 (DOF, 25 de abril de 2005) Mexico established the Intersecretarial Commission on Climate Change (CICC) by means of a presidential decree. It is integrated by the representatives of the Ministry of Environment and Natural Resources (SEMARNAT), Agriculture, Livestock, Rural Development, Fisheries and Food (SAGARPA), Communications and Transport (SCT), Social Development (SEDESOL), Economy (SE), Energy (SENER) and Foreign Affairs (SRE). It is worth mentioning that from the year 2004, prior to the establishment of the CICC, the Mexican Committee for Capture and Reduction of Greenhouse Gases Emissions (COMEGEI) —today it takes part of this committee as a working group— initiated activities under the coordination of SEMARNAT’s Subsecretariat of Planning and Environmental Policy. This working group is responsible for the promotion, publication and evaluation of CDM projects as well as for the issuance of approval letters (SEMARNAT, 2010a). It is worth mentioning that climate change was for the first time considered by the current National Development Plan (PND) (Presidencia, 2007) as one of its ruling principles. This led to the creation of a political agenda, and the establishment of objectives and goals within Sectoral Development Programs. Furthermore, it contributed to the creation of a CDM projects portfolio as well as the trade of greenhouse gas emissions. On the other hand, the private sector is starting to play a very important role on this issue by developing several CDM projects, fostering the competition among specialized consulting firms. Finally, four Ministries of the CICC (SENER, SEMARNAT, SAGARPA and the SCT) explicitly include climate change in their 2007-2012 Sectoral Development Programs: Energy Sector Program, Objective IV.1 Mitigate increasing greenhouse gas emissions (SENER, 2007), Environment and Natural Resources, Objective 4, Coordinate the implementation of the National Strategy on Climate Change in terms of adaptation and mitigation measures (SEMARNAT, 2008), Agriculture and Fisheries Sector Program, Strategy 4.4 Prevent and mitigate climate change effects (SAGARPA, 2007), Communications and Transport Sector Program, Objective 2.2.7 Implement measures intended to reduce greenhouse gas emissions from the transport sector and for climate change adaptation (SCT, 2007). In order to monitor the progress made on these objectives, 62 Mexico- Products I and II the Special Program on Climate Change (PECC) was elaborated (DOF, 2009f) by setting out specific targets in several related areas, including several action lines intended to achieve them. In accordance with the information published by SEMARNAT (2010b), out of all Mexican MDL projects there are 240 which have been registered before the Executive Board, including 34 with the corresponding CERs. Furthermore, there are 84 projects with approval letters, but they have not been registered yet. It is worth mentioning that there are 126 preliminary projects with no approval letters, but they hold the No Objection Letter (see Table 8). Out of all approved projects, 178 (76%) are related to methane emissions from wastes (human and livestock) and they represent an annual reduction of approximately 10 million tonnes of CO2e (MtCO2e) —15% of total emissions—. Furthermore, renewable energy and energy efficiency projects totaled 27 (10%) and 13 (5.4%), respectively, and contributed with annual emission reductions of 7.4 MtCO2e (10.7%) and 15.1 MtCO2e (22%). It is worth mentioning that there are 5 projects for industrial emissions control which represented slightly above half of the emissions avoided 36.6 MtCO2e per year, while transport sector projects totaled 3 (1.3%), with avoided emissions of 0.22 MtCO2e per year. Finally, 18 projects (7.5%) in other categories such as (re/af)forestation, cogeneration, etc. which represented annual avoided emissions of 0.6 MtCO2e (0.9%). Table 8. Mexican CDM projects by category and stage. CERs* by registered projects Categories Registered projects before the Executive Board Registered projects with approval letters but not registered yet Annual Average Annual Average CERs CERs Nr. tCO2e/year Nr. tCO2e/year Preliminary projects with no objection letter but without approval letters Annual Average CERs Nr. tCO2e/year CERs awarded Nr. tCO2e Electricity distribution 0 0 0 Energy efficiency 1 69,615 3 Industrial emission gases 1 4,789,363 2 Fugitive methane emissions 0 0 1 Wind 3 174,928 8 Geothermal 0 0 0 0 0 3 240,767 Hydro 3 244,574 3 118,844 7 214,396 15 2,866,449 Livestock waste management 1 3,273 17 195,925 7 279,881 1 32,000 Swine waste management 23 1,313,142 74 2,318,420 21 662,985 4 308,925 0 0 1 266,535 552,781 8 420,055 36 13,447,473 3,323,462 1 102,592 4 800,773 82,645 1 89,841 3 768,305 2,434,730 9 1,913,717 8 1,214,206 63 Mexico- Products I and II Tidal power plants 0 0 0 0 0 3 47,500 Re (Af)forestation 0 0 0 0 0 5 971,491 Gas reinjection in oilfields 0 0 0 0 0 1 22,549,810 Landfills 2 227,388 14 14 1,669,816 20 3,297,734 Solar 0 0 0 0 0 2 139,335 Fuel substitution 0 0 0 7 431,726 2 157,197 Transport 0 0 0 3 244,307 1 55,102 Sewagee water treatment 0 0 1 4 109,930 3 916,906 Cogeneration 0 0 0 0 0 11 2,874,846 Subtotal 34 10,768,587 82 6,139,245 123 50,955,354 Energy efficiency 0 0 1 124,283 0 0 2 905,364 Transport 0 0 0 0 0 1 170,000 Subtotal 0 0 1 24,283 0 0 1 1,075,364 Total 34 10,792,870 82 6,139,245 126 52,030,718 6,822,283 123 6,822,283 124 1,726,627 15,153 Source: SEMARNAT (2010b). It is worth mentioning that out of all renewable energy projects, 20 (8%) correspond to wind farms, with annual emission reductions of 4.5 MtCO2e, while 13 correspond to hydropower plants (5%), with annual emission reductions of 0.58 MtCO2e. 2.5. Information on relevant facilities by type of renewable energy technology Information about 23 operational renewable energy facilities, (which are representative of the Mexican electric power sector) is presented. This information corresponds to 5 geothermal power plants (Cerro Prieto I, Cerro Prieto II, Cerro Prieto III, Cerro Prieto IV y Los Azufres), 5 wind farms (la Venta II, Eurus, Parques Ecológicos, la Rumorosa y Oaxaca I), 6 hydropower plants, divided into 1 mini-hydro (Cajón de Peñas), 2 small (El Gallo y Chilatlán) and 3 large hydropower plants (Manuel M. Torres, Malpaso y Aguamilpa), 4 biogas (Bioenergía de Nuevo León, Dulces Nombres, Planta Norte y Energía Láctea) and 3 sugar cane bagasse-fired power facilities (El Higo, San Miguel del Naranjo y Melchor Ocampo). The largest facilities (between 1000 and 2400 MW) are large hydropower stations, followed by geothermal power plants. All of these facilities are owned by the utility CFE and were built several decades ago with the aim of supplying electricity to be used as public service (one hydropower plant in the late 60’s, one geothermal facility at the 64 Mexico- Products I and II beginning of the 70’s and the remaining between the 80’s and 90’s). In spite of their size (between 1000 and 2400 MW), CFE’s hydropower plants operate with a low capacity factor and during the highest load of the semi-base period. On the contrary, and although geothermal power plants are smaller in size (between 100 and 220 MW), they run during the base load period. These facilities are characterized by their high up-front costs, but low fuel and operation and maintenance costs, which make them well suited for base load periods. The aforementioned hydro and geothermal power plants were financed with public resources and have represented important projects of the Mexican and CFE’s civil engineering. They are cost-competitive facilities when compared to those using fossil fuels in their corresponding niche segment for electricity supply, and eventually created hundreds of jobs. Unfortunately, these projects have made a little contribution to local sustainable development, since their benefits (jobs and economic activities) were temporary and they have had a negative impact on the local environment —to a lesser extent geothermal and to a larger extent large hydropower plants, even though the latter contributed to the regulation and management of water flows in their corresponding areas—. The rest of the analyzed power plants are smaller in size, between 0.8 MW and 85 MW, except for the 300 MW Eurus wind farm. Likewise, except for la Venta II wind farm, all of the remaining power plants are permit holders under the self-supply or cogeneration modalities, and are not allowed by law to supply electricity for public service. All these facilities began permit applications since the year 1997, but the vast majority came into operation over the last 5 years. Bagasse is fired in steam boiler-turbo-generator sets, which operate at low capacity factors and low efficiencies, and supply electricity for self-consumption purposes of sugar mills. This choice takes advantage of one by-product of sugar crops, the bagasse, avoiding CO2 emissions due to its renewable nature. However, it is burnt in a conventional boiler and does not avoid the emission of other local pollutants as well as highly visible smoke. Furthermore, combustion often begins with a mixture of bagasse and fuel oil which is far from being considered as “clean”. Finally, the power generation process is very inefficient. With regard to small hydropower, all these facilities are private projects under the selfsupply modality and deliver electricity to medium-sized companies, while minihydropower supply the own needs of several small-sized companies. All of these selfsupplied companies are of different economic nature: iron and steel, textile, food, cellulose, poultry, etc., where reliability, quality and low cost of supply are crucial factors to take part in self-supply societies. These projects take advantage of local water resources and support business activities that generate employments. They also work at medium to high capacity factors —meaning that both the facilities and water resources are well used— and install mature technology with high up-front costs, but low operating and 65 Mexico- Products I and II maintenance costs. Regarding the environmental front, they avoid CO2e emissions and impose a lower impact to the environment than large hydropower —especially minihydro—. As for biogas, four operational facilities were analyzed; the first one was a power generation project with biogas from landfill, the other two were power generation facilities at a sewage treatment plant, and one referred to a private-owned facility that generates electricity with biogas from cattle waste. These installations operate at high capacity factors of over 70%, which means that such projects not only operate at optimal capacity, but also have the organic inputs necessary for biogas production. They use mature technologies such as internal combustion engines —with acceptable efficiencies for this technology—. When biogas is obtained from municipal solid waste and then used to generate electricity, the investment costs are high due to the construction of the landfill, but operating and maintenance costs are at medium level. On the contrary, investment and operating and maintenance costs are relatively low when biogas is obtained from cattle waste. The common factors of these facilities is the fact they solve local pollution problems and generate productive employments, but at a different scale. An important case to discuss is the Bioenergía de Nuevo León Project, since it has mitigated an environmental problem originated from an open dumpsite in the urban and metropolitan zone of Monterrey City. This site had a considerable environmental and socioeconomic impact around this urban area, releasing important methane emissions, a precursor of the climate change phenomenon. Moreover, the construction of this facility resulted in the development of local technology and engineering which is nowadays requested within and outside the country. Not only has it created dozens of jobs associated to the landfill construction, it has improved the quality of life around the landfill and the city. Likewise, it has solved social and health problems such as those related to “scavengers” who made their living from garbage and nearby residents. Nowadays, it supplies electricity to the local subway system and to several municipalities for street lighting and other services, which resulted in important savings in the electricity bills of the state governments and municipalities. All these benefits have led to an extension of this facility. With regard to wind power, we analyze three facilities; the first one is operated by the CFE to supply electricity for public service; while the others are run by a decentralized agency of the state of California and by a private investor, Eurus S.A. de C.V. All of these facilities have a significant installed power capacity, and as already mentioned, the Eurus Project has a capacity of 300 MW —with no water requirements— and operates at capacity factors considered high among the wind power industry worldwide. Similarly, they have started with management procedures to be designated as clean development 66 Mexico- Products I and II mechanism projects due to the large amount of avoided CO2 emissions as well as to their sustainable development contribution. The second relevant case analyzed is the wind power facility promoted by the state agency of California (La Rumorosa). Besides the already mentioned environmental and economic benefits, La Rumorosa was the first wind farm —consisting of 5 wind turbines— that was interconnected to the CFE grid. It takes advantage of the local wind resource available in La Rumorosa, Baja California, with the aim of supplying the needs of the municipality of Mexicali and selling the excess power to the CFE. In addition, this project achieved the socialization of economic benefits via a state contribution for low income segments that is intended to cover high electricity bills during the summer season in Mexicali —air conditioning systems are required due to high temperatures reached in that period—. This contribution can also be used to promote energy efficiency by facilitating the purchase of efficient appliances. 2.5.1. Geothermal power plants Cerro Prieto I geothermal field Image 1. Facilities at Cerro Prieto I geothermal field. Source: CFE (2010c) 67 Mexico- Products I and II Description Units Country Facility name Location (Municipality - State) Technology Commissioning date Service type (Public/ nonpublic service) Legal business structure (Public/ Private) Modality in accordance with the LSPEE Developer Public Parastatal entity Comisión Federal de Electricidad Not applicable Permit number before the CRE Reference year Rated power Net power Gross electricity generation Electricity used for public service vs. Total sales Capacity factor Efficiency Energy source Energy consumption in the reference year Investment Information and data Mexico Cerro Prieto I Mexicali, Baja California Geothermal power plant October 12th, 1973 Public MW MW GWh % 2008 180 1293.52 95.1 PJ 829 36.210 Geothermal 12.86 Million USD2007 262.2111 % % 9 This factor was calculated as the ratio of the number of hours per year that the plant was run to the number of hours that it would otherwise has been operated at its rated power capacity during the same year. 10 Efficiency was calculated as the average value obtained from the ratio of primary energy reported in SENER (2009a) to the energy generated by each renewable energy technology. 68 Mexico- Products I and II Fixed operating and maintenance costs Variable operating and maintenance costs Operating and maintenance costs Energy selling price Avoided CO2 emissions Million USD2007 9.00 Million USD2007 0.05 Million USD2007 9.05 USD2007/MWh Million tonnes/year Not available 0.677812 Brief description The power plant consists of four 37.5 MW and one 30 MW units. Geothermal energy. Information sources CFE (2008) CFE (2009a) SENER (2009a) 11 Information on investment, operating and maintenance costs was obtained from CFE (2008). 12 Emissions were calculated using an average emission factor of 0.524 kgCO2/kWh. 69 Mexico- Products I and II Cerro Prieto II geothermal field Image 2. Facilities at Cerro Prieto II geothermal field. Source: CFE (2010c). Description Units Country Facility name Location (Municipality - State) Technology Commissioning date Service type (Public/ nonpublic service) Legal business structure (Public/ Private) Modality in accordance with the LSPEE Developer Public Parastatal entity Comisión Federal de Electricidad Not applicable Permit number before the CRE Reference year Rated power Net power Information and data Mexico Cerro Prieto II Mexicali, Baja California Geothermal power plant February 1st, 1984 Public MW MW 2008 220 70 Mexico- Products I and II Gross electricity generation Electricity used for public service vs. Total sales Capacity factor Efficiency Energy source Energy consumption in the reference year Investment Fixed operating and maintenance costs Variable operating and maintenance costs Operating and maintenance costs Energy selling price Million tonnes/year Brief description Information sources GWh % 1581.82 95.1 % % PJ 82.1 36.2 Geothermal 15.73 Million USD2007 Million USD2007 256.38 11.00 Million USD2007 0.06 Million USD2007 11.06 USD2007/MWh Million tonnes/year Not available 0.8289 The power plant consists of two units with the following capacities: U-1 (110MW) and U-2 (110MW). Geothermal energy. CFE (2008) CFE (2009a) SENER (2009a) 71 Mexico- Products I and II Cerro Prieto III geothermal field Image 3. Facilities at Cerro Prieto III geothermal field. Source: CFE (2010c). Description Country Facility name Location (Municipality - State) Technology Commissioning date Service type (Public/ nonpublic service) Legal business structure (Public/ Private) Modality in accordance with the LSPEE Developer Permit number before the CRE Units Information and data Mexico Cerro Prieto III Mexicali, Baja California Geothermal power plant July 24th, 1985 Public Public Parastatal entity Comisión Federal de Electricidad Not applicable 72 Mexico- Products I and II Reference year Rated power Net power Gross electricity generation Electricity used for public service vs. Total sales Capacity factor Efficiency Energy source Energy consumption in the reference year Investment Fixed operating and maintenance costs Variable operating and maintenance costs Operating and maintenance costs Energy selling price Avoided CO2 emissions Brief description Information sources MW MW GWh % % % 2008 220 1581.82 95.1 PJ 82.1 36.2 Geothermal 15.73 Million USD2007 Million USD2007 320.47 11.00 Million USD2007 0.06 Million USD2007 11.06 USD2007/MWh Million tonnes/year Not available 0.8289 The power plant consists of two units with the following capacities: U-1 (110MW), U-2 (110MW). Geothermal energy. CFE (2008) CFE (2009a) SENER (2009a) 73 Mexico- Products I and II Cerro Prieto IV geothermal field Image 4. Facilities at Cerro Prieto IV geothermal field. Source: CFE (2010c). Description Units Country Facility name Location (Municipality - State) Technology Commissioning date Service type (Public/ nonpublic service) Legal business structure (Public/ Private) Modality in accordance with the LSPEE Developer Public Parastatal entity Comisión Federal de Electricidad Not applicable Permit number before the CRE Reference year Rated power Net power Gross electricity generation Information and data Mexico Cerro Prieto IV Mexicali, Baja California Geothermal power plant July, 26th, 2000 Public MW MW GWh 2008 100 718.96 74 Mexico- Products I and II Electricity used for public service vs. Total sales Capacity factor Efficiency Energy source Energy consumption in the reference year Investment Fixed operating and maintenance costs Variable operating and maintenance costs Operating and maintenance costs Energy selling price Avoided CO2 emissions Brief description Information sources % 95.1 % % PJ 82.1 36.2 Geothermal 7.15 Million USD2007 Million USD2007 145.67 5.00 Million USD2007 0.03 Million USD2007 Not available USD2007/MWh Million tonnes/year Not available 0.3767 The power plant consists of four 25 MW units. Geothermal energy. CFE (2008) CFE (2009a) SENER (2009a) 75 Mexico- Products I and II Los Azufres geothermal field Image 5. Facilities at Los Azufres geothermal field. Source: CFE (2010c). Description Units Country Facility name Location (Municipality - State) Technology Commissioning date Service type (Public/ nonpublic service) Legal business structure (Public/ Private) Modality in accordance with the LSPEE Developer Public Parastatal entity Comisión Federal de Electricidad Not applicable Permit number before the CRE Reference year Rated power Net power Information and data Mexico Los Azufres Ciudad Hidalgo, Michoacán Geothermal power plant August 4th, 1982 Public MW MW 2008 194.5 76 Mexico- Products I and II Gross electricity generation Electricity used for public service vs. Total sales Capacity factor Efficiency Energy source Energy consumption in the reference year Investment Fixed operating and maintenance costs Variable operating and maintenance costs Operating and maintenance costs Energy selling price Avoided CO2 emissions Brief description Information sources GWh % 1516.62 96.2 % % PJ 89 36.2 Geothermal 15.08 Million USD2007 Million USD2007 298.55 10.18 Million USD2007 0.06 Million USD2007 10.24 USD2007/MWh Million tonnes/year Not available 0.7947 The plant consists of one 50 MW, one 26.8 MW, three 26.60 MW, seven 5 MW and two 1.45 MW units. Geothermal energy. CFE (2008) CFE (2009a) SENER (2009a) 77 Mexico- Products I and II 2.5.2. Wind power La Venta II wind farm Image 6. La Venta II wind farm. Source: CFE (2010c). Description Country Facility name Location (Municipality - State) Technology Commissioning date Service type (Public/ nonpublic service) Legal business structure (Public/ Private) Modality in accordance with the LSPEE Developer Units Information and data Mexico La Venta II Juchitán de Zaragoza, Oaxaca Wind generators November 10th, 1994 Public Public Parastatal entity Comisión Federal de Electricidad 78 Mexico- Products I and II Permit number before the CRE Reference year Rated power Net power Gross electricity generation Electricity used for public service vs. Total sales Capacity factor Efficiency Energy source Energy consumption in the reference year Investment Fixed operating and maintenance costs Variable operating and maintenance costs Operating and maintenance costs Energy selling price Avoided CO2 emissions Brief description Information sources Not applicable MW MW GWh % 84.65 % % 33.3 36.1 Wind energy 8.74 PJ Million USD2007 Million USD2007 876 617.9 Million USD2007 Million USD2007 8.9 USD2007/MWh Million tonnes/year Not available 0.7947 The wind farm consists of 84 wind generators for a total capacity of 84.6MW. CFE (2008) CFE (2009a) SENER (2009a) 79 Mexico- Products I and II Eurus wind farm Image 7. EURUS wind farm. Source: Aguilar (2010). Description Units Country Facility name Location (Municipality - State) Technology Commissioning date Service type (Public/ nonpublic service) Legal business structure (Public/ Private) Private (Investment Promoter Company with Variable Capital – S.A.P.I. de C.V.) Self-supply Modality in accordance with the LSPEE Permit holder Permit number before the CRE Reference year Rated power Information and data Mexico Eurus Juchitán de Zaragoza, Oaxaca Wind generators October 29th, 2009 Non-public Eurus, S. A. P. I. de C.V. E/832/AUT/2009 MW 300 80 Mexico- Products I and II Net power Gross electricity generation Electricity used for public service vs. Total sales Capacity factor Efficiency Energy source Energy consumption in the reference year Investment Fixed operating and maintenance costs Variable operating and maintenance costs Operating and maintenance costs Energy selling price Avoided CO2 emissions Brief description Information sources MW GWh % 876 % % 33.3 36.1 PJ Wind energy 8.74 Million USD2007 Million USD2007 617.9 Million USD2007 Million USD2007 USD2007/MWh Million tonnes/year 8.9 0.4590 The wind farm consists of 300 wind generators with different capacities up to 3 MW each. CRE (2006a) CRE (2006b) CRE (2007a) SENER (2009a) 81 Mexico- Products I and II Parques Ecológicos wind farm Image 8. Inauguration of the Parques Ecológicos wind farm. Source: Presidencia de la República (2009a) Description Country Facility name Location (Municipality - State) Technology Commissioning date Service type (Public/ nonpublic service) Legal business structure (Public/ Private) Modality in accordance with the LSPEE Permit holder Permit number before the CRE Units Information and data Mexico Parques Ecológicos Juchitán de Zaragoza, Oaxaca Wind generators January 31st, 2009 Non-public Private (Public Limited Company with Variable Capital – S.A. de C.V.) Self-supply Parques Ecológicos de México, S.A. de C.V. E/215/AUT/2002 Reference year 82 Mexico- Products I and II Rated power Net power Gross electricity generation Electricity used for public service vs. Total sales Capacity factor Efficiency Energy source Energy consumption in the reference year Investment Fixed operating and maintenance costs Variable operating and maintenance costs Operating and maintenance costs Energy selling price Avoided CO2 emissions Brief description Information sources MW MW GWh % 80 % % 40.0 36.1 PJ Wind energy 2.79 Million USD2007 Million USD2007 280 184.5 Million USD2007 Million USD2007 USD2007/MWh Million tonnes/year 2.8 0.1467 The wind farm has 64 wind generators of 1.25 MW each for a total capacity of 80 MW. CRE (2002a) SENER (2009a) 83 Mexico- Products I and II La Rumorosa wind farm Image 9. La Rumorosa wind farm. Source: Site visit made on September 14th, 2010. Description Country Facility name Location (Municipality - State) Technology Commissioning date Service type (Public/ nonpublic service) Legal business structure (Public/ Private) Modality in accordance with the LSPEE Permit holder Permit number before the CRE Units Information and data Mexico La Rumorosa Tecate, Baja California. Wind generators October 29th, 2009 Non-public Public Self-supply Municipality of Mexicali E/832/AUT/2009 84 Mexico- Products I and II Reference year Rated power Net power Gross electricity generation Electricity used for public service vs. Total sales Capacity factor Efficiency Energy source Energy consumption in the reference year Investment Fixed operating and maintenance costs Variable operating and maintenance costs Operating and maintenance costs Energy selling price Avoided CO2 emissions Brief description MW MW GWh % 10 % % 30.8 36.1 PJ Wind energy 0.27 Million USD2007 Million USD2007 27 26.1913 Million USD2007 Million USD2007 0.27 USD2007/MWh Million tonnes/year Not available 0.0141 The wind farm has 5 wind generators of 2 MW each for a total capacity of 10 MW. Information sources CRE (2009a) CRE (2009b) Muñoz (2010) SENER (2009a) 13 This amount is expressed in USD of the year 2009. 85 Mexico- Products I and II Eléctrica del Valle de México wind farm (Lamatalaventosa) Image 10. Eléctrica del Valle de México wind farm (Lamatalaventosa). Source: Wal-Mart (2010). Description Country Facility name Location (Municipality - State) Technology Commissioning date Service type (Public/ nonpublic service) Legal business structure (Public/ Private) Modality in accordance with the LSPEE Permit holder Units Information and data Mexico Eléctrica del Valle de México (Lamatalaventosa) Asunción Ixtaltepec and Juchitán de Zaragoza, Oaxaca. Wind generators April 1st, 2010 Non-public Private (Limited Liability Company with Variable Capital – S. de R.L. de C.V.) Self-supply Eléctrica del Valle de México, S. de R.L. de C.V. 86 Mexico- Products I and II Permit number before the CRE Reference year Rated power Net power Gross electricity generation Electricity used for public service vs. Total sales Capacity factor Efficiency Energy source Energy consumption in the reference year Investment Fixed operating and maintenance costs Variable operating and maintenance costs Operating and maintenance costs Energy selling price Avoided CO2 emissions Brief description Information sources E/201/AUT/2001 MW MW GWh % 67.5 % % 61.8 36.1 PJ Wind energy 3.64 Million USD2007 Million USD2007 365.16 158.3 Million USD2007 Million USD2007 USD2007/MWh Million tonnes/year 3.7 0.0141 The wind farm has 45 wind generators of 1.5 MW each for a total capacity of 67.5 MW. CRE (2001a) CRE (2001b) SENER (2009a) 87 Mexico- Products I and II 2.5.3. Hydropower plants Hydropower projects were divided into 3 capacity-based categories, namely: - Mini-hydro: power plants with a capacity up to 1.5 MW. - Small hydro: facilities with a capacity up to 3014 MW. - Large hydro: power plants with a capacity larger than 30 MW. Cajón de Peñas mini-hydro project Image 11. Cajón de Peñas mini-hydro project. Source: Panoramico (2010) 14 In accordance with the LSPEE (DOF, 1993) small power producers refer to power plants with a capacity up to 30 MW. For this reason, the same criterion was used to consider this kind of projects as small hydro facilities. 88 Mexico- Products I and II Description Country Facility name Location (Municipality State) Technology Commissioning date Service type (Public/ non-public service) Legal business structure (Public/ Private) Units Hydro turbines September 1st, 2008 Non-public Private (Public Limited Company with Variable Capital – S.A. de C.V.) Self-supply Modality in accordance with the LSPEE Permit holder Permit number before the CRE Reference year Rated power Net power Gross electricity generation Electricity used for public service vs. Total sales Capacity factor Efficiency Energy source Energy consumption in the reference year Investment Information and data Mexico Cajón de Peñas Tomatlán, Jalisco. Hidroeléctrica Cajón de Peña S.A de C.V. E/509/AUT/2006 MW MW GWh 1.2 7.71 % % % PJ 73.3 36.2 Hydro 0.077 Million USD2007 1.24 89 Mexico- Products I and II Fixed operating and maintenance costs Variable operating and maintenance costs Operating and maintenance costs Energy selling price Avoided CO2 emissions Brief description Million USD2007 Not available Million USD2007 Not available Million USD2007 Not available USD2007/MWh Million tonnes/year Not available 0.0053 The power plant consists of two 0.60 MW generating units. Information sources CRE (2006c) CRE (2006d) SENER (2009a) Small hydropower plants El Gallo small hydro project Image 12. Machinery room at El Gallo small hydro project. Source: Eléctrica Matamoros (2010). 90 Mexico- Products I and II Description Units Country Facility name Location (Municipality - State) Technology Commissioning date Service type (Public/ nonpublic service) Legal business structure (Public/ Private) Private (Limited Liability Company with Variable Capital – S. de R.L. de C.V.) Self-supply Modality in accordance with the LSPEE Permit holder Mexicana de Hidroelectricidad Mexhidro, S. de R.L. de C.V. E/130/AUT/99 Permit number before the CRE Reference year Rated power Net power Gross electricity generation Electricity used for public service vs. Total sales Capacity factor Efficiency Energy source Energy consumption in the reference year Investment Fixed operating and Information and data Mexico El Gallo Cutzamala de Pinzón, Guerrero. Hydro turbines December 1st, 2006 Non-public MW MW GWh % 30 % % PJ 46.4 36.2 Hydro 1.01 Million USD2007 56.09 Million USD2007 Not available 101.3 91 Mexico- Products I and II maintenance costs Variable operating and maintenance costs Operating and maintenance costs Energy selling price Avoided CO2 emissions Brief description Million USD2007 Not available Million USD2007 Not available USD2007/MWh Million tonnes/year Not available 0.0531 The power plant consists of a 30 MW generating unit. Information sources CRE (1999a) CRE (2010a) SENER (2009a) Constitución de Apatzingán (Chilatlán)small hydro project Image 13. Constitución de Apatzingán (Chilatlán) small hydro project. Source: Barnés (2007) 92 Mexico- Products I and II Description Units Country Facility name Location (Municipality - State) Technology Commissioning date Service type (Public/ nonpublic service) Legal business structure (Public/ Private) Private (Public Limited Company with Variable Capital – S.A. de C.V.) Self-supply Modality in accordance with the LSPEE Permit holder Proveedora de electricidad de Occidente, S.A. de C.V. E/241/AUT/2003 Permit number before the CRE Reference year Rated power Net power Gross electricity generation Electricity used for public service vs. Total sales Capacity factor Efficiency Energy source Energy consumption in the reference year Investment Fixed operating and maintenance costs Variable operating and Information and data Mexico Constitución de Apatzingán (Chilatlán) Jilotlán de Dolores, Jalisco. Hydro turbines November 1st, 2005 Non-public MW MW GWh % 19 % % PJ 45.8 36.2 Hydro 0.759 Million USD2007 Million USD2007 21.44 Not available Million USD2007 Not available 76.29 93 Mexico- Products I and II maintenance costs Operating and maintenance costs Energy selling price Avoided CO2 emissions Brief description Million USD2007 Not available USD2007/MWh Million tonnes/year Not available 0.0400 The power plant consists of a Francis turbine coupled to a 19 MW generating unit. Information sources CRE (2003a) CRE (2010a) SENER (2009a) Large hydropower plants Manuel M. Torres (Chicoasén) hydro project Image 14. Manuel M. Torres (Chicoasén) hydropower plant. Source: CFE (2010c). 94 Mexico- Products I and II Description Units Country Facility name Location (Municipality - State) Technology Commissioning date Service type (Public/ nonpublic service) Legal business structure (Public/ Private) Modality in accordance with the LSPEE Public Parastatal entity Permit holder Comisión Federal de Electricidad Not applicable Permit number before the CRE Reference year Rated power Net power Gross electricity generation Electricity used for public service vs. Total sales Capacity factor Efficiency Energy source Energy consumption in the reference year Investment Fixed operating and maintenance costs Variable operating and maintenance costs Operating and maintenance Information and data Mexico Manuel M. Torres Chicoasén, Chiapas Hydro turbines May 29th, 1981 Public MW MW GWh % % % 2008 2400 7652.93 99.2 PJ 36.4 36.2 Hydro 76.11 Million USD2007 Million USD2007 4,055.85 16.79 Million USD2007 0.16 Million USD2007 16.95 95 Mexico- Products I and II costs Energy selling price Avoided CO2 emissions Brief description USD2007/MWh Million tonnes/year Information sources Not available 4.0101 The power plant consists of eight 300 MW generating units. It is located in the Grijalva river basin. CFE (2008) CFE (2009a) SENER (2009a) Malpaso hydro project Image 15. Malpaso hydropower plant. Source: Mitsubishi, 2010. Description Country Facility name Location (Municipality - State) Technology Commissioning date Units Information and data Mexico Malpaso Tecpatán, Chiapas Hydro turbines January 26th, 1969 96 Mexico- Products I and II Service type (Public/ nonpublic service) Legal business structure (Public/ Private) Modality in accordance with the LSPEE Permit holder Public Public Parastatal entity Comisión Federal de Electricidad Not applicable Permit number before the CRE Reference year Rated power Net power Gross electricity generation Electricity used for public service vs. Total sales Capacity factor Efficiency Energy source Energy consumption in the reference year Investment Fixed operating and maintenance costs Variable operating and maintenance costs Operating and maintenance costs Energy selling price Avoided CO2 emissions Brief description MW MW GWh % % % 2008 1080 4928.81 99.1 PJ 52.1 36.2 Hydro 49.02 Million USD2007 Million USD2007 4,961.87 9.89 Million USD2007 0.11 Million USD2007 10.00 USD2007/MWh Million tonnes/year Not available 2.5827 The power plant consists of six 180 MW generating units. It is located in the Grijalva river basin. 97 Mexico- Products I and II Information sources CFE (2008) CFE (2009a) SENER (2009a) Aguamilpa (Solidaridad) hydro project Image 16. Aguamilpa (Solidaridad) hydropower plant. Source: CFE (2010c). Description Country Facility name Location (Municipality - State) Technology Commissioning date Service type (Public/ nonpublic service) Legal business structure (Public/ Private) Modality in accordance with Units Information and data Mexico Aguamilpa (Solidaridad) El Nayar, Nayarit Hydro turbines September 15th, 1994 Public Public Parastatal entity 98 Mexico- Products I and II the LSPEE Permit holder Permit number before the CRE Reference year Rated power Net power Gross electricity generation Electricity used for public service vs. Total sales Capacity factor Efficiency Energy source Energy consumption in the reference year Investment Fixed operating and maintenance costs Variable operating and maintenance costs Operating and maintenance costs Energy selling price Avoided CO2 emissions Brief description Information sources Comisión Federal de Electricidad Not applicable MW MW GWh % % % PJ Million USD2007 Million USD2007 Million USD2007 Million USD2007 USD2007/MWh Million tonnes/year 2008 960 2529.66 99 30.1 36.2 Hydro 25.16 1,675.13 6.50 0.05 6.55 Not available 1.3255 The power plant consists of four 180 MW generating units. CFE (2008) CFE (2009a) SENER (2009a) 99 Mexico- Products I and II 2.5.4. Biogas power plants Bioenergía de Nuevo León Project Image 17. Bioenergía de Nuevo León project. Source: Gobierno del Estado de Nuevo León (2008). Description Country Facility name Location (Municipality - State) Technology Commissioning date Service type (Public/ nonpublic service) Legal business structure Units Information and data Mexico Bioenergía de Nuevo León Salinas Victoria, Nuevo León. Internal combustion engine April 7th, 2003 Non-public Public (Public Limited Company 100 Mexico- Products I and II (Public/ Private) with Variable Capital – S.A. de C.V.) Cogeneration Modality in accordance with the LSPEE Permit holder Bioenergía de Nuevo León, S.A. de C.V. E/217/COG/2002 Permit number before the CRE Reference year Rated power Net power Gross electricity generation Electricity used for public service vs. Total sales Capacity factor Efficiency Energy source Energy consumption in the reference year Investment Fixed operating and maintenance costs Variable operating and maintenance costs Operating and maintenance costs Energy selling price Avoided CO2 emissions Brief description MW MW GWh % 7.42 % % 89.6 27.6 Biogas 0.76 PJ Million USD2007 Million USD2007 Million USD2007 Million USD2007 USD2007/MWh Million tonnes/year 58.25 17.62 Not available Not available Not available Not available 0.0305 The power plant consists of seven 1.06 MW motor-generator sets. 101 Mexico- Products I and II Information sources CRE (2002b) CRE (2002c) Dulces Nombres project Image 18. Dulces Nombres sewage treatment plant. Source: Servicios de Agua y Drenaje de Monterrey (2006). Description Country Facility name Location (Municipality - State) Technology Commissioning date Service type (Public/ nonpublic service) Legal business structure (Public/ Private) Modality in accordance with the LSPEE Permit holder Units Information and data México Dulces Nombres Pesquería, Nuevo León. Internal combustion engine August 24th, 1997 Non-public Public Self-supply Water and Drainage Services of 102 Mexico- Products I and II Monterrey, a decentralized public entity of the State Government of Nuevo Leon. E/56/AUT/97 Permit number before the CRE Reference year Rated power Net power Gross electricity generation Electricity used for public service vs. Total sales Capacity factor Efficiency Energy source 1 Energy consumption in the reference year 1 Energy source 2 Energy consumption in the reference year 2 Investment Fixed operating and maintenance costs Variable operating and maintenance costs Operating and maintenance costs Energy selling price Avoided CO2 emissions Brief description MW MW GWh % 9.2 % % PJ 49.9 24.1 Biogas 0.54 PJ Natural gas 0.06 40.20 Million 10.71 USD2007 Million Not available USD2007 Million Not available USD2007 Million Not available USD2007 USD2007/MWh Not available Million 0.0211 tonnes/year The Dulces Nombres sewage treatment plant was designed to treat an average flow of 5 thousand liters per second, but it currently treats a flow of nearly 3 thousand at is full capacity. 95 percent of treated water is discharged to the Pesquería river and is used 103 Mexico- Products I and II for agricultural irrigation systems, while the remaining percentage is reused for power generation purposes. The power plant has 8 motor-generator sets: 4 sets of 1.3 MW each and 4 sets of 1.0 MW for a total capacity of 9.2 MW. CRE (1997a) CRE (2010a) Information sources Planta Norte project Image 19. Planta Norte project. Source: Servicios de Agua y Drenaje de Monterrey (2006). Description Country Facility name Location (Municipality - State) Technology Commissioning date Service type (Public/ nonpublic service) Units Information and data México Planta Norte San Nicolás de los Garza (General Escobedo), Nuevo León. Internal combustion engine N/A Non-public 104 Mexico- Products I and II Legal business structure (Public/ Private) Modality in accordance with the LSPEE Permit holder Public Self-supply Water and Drainage Services of Monterrey, a decentralized public entity of the State Government of Nuevo Leon. E/59/AUT/97 Permit number before the CRE Reference year Rated power Net power Gross electricity generation Electricity used for public service vs. Total sales Capacity factor Efficiency Energy source 1 Energy consumption in the reference year 1 Energy source 2 Energy consumption in the reference year 2 Investment Fixed operating and maintenance costs Variable operating and maintenance costs Operating and maintenance costs Energy selling price MW MW GWh % 1.6 % % PJ 100 32.7 Biogas 0.07 PJ Natural Gas 0.09 MILLONES DE USD 2007 Million USD2007 Million USD2007 Million USD2007 Million USD2007 14.02 1.86 Not available Not available Not available Not available 105 Mexico- Products I and II Avoided CO2 emissions Brief description USD2007/MWh 0.0073 The Planta Norte receives the sewage from the northwestern side of Monterrey’s metropolitan area; its basin includes the northern flank of the Loma Larga, all Cumbres sector and the down town, including the old industrial zone. The design capacity of Planta Norte is 2,500 liters per second and may be increased to 3,500 liters per second over the next 6 years. It currently receives and average of 2,100 liters per second. The power plant has 4 motor-generator sets of 0.4 MW each for a total capacity of 1.6 MW. CRE (1997b) CRE (2010a) Information sources Energía Láctea project Image 20. Energía Láctea project. Source: Comisión de Cooperación Ecológica Fronteriza (2008). Description Country Facility name Location (Municipality - State) Units Information and data Mexico Energía Láctea Delicias, Chihuahua. 106 Mexico- Products I and II Technology Commissioning date Service type (Public/ nonpublic service) Legal business structure (Public/ Private) Internal combustion engine June 18th, 2009 Non-public Private (Public Limited Company with Variable Capital – S.A. de C.V.) Self-supply Modality in accordance with the LSPEE Permit holder Permit number before the CRE Reference year Rated power Net power Gross electricity generation Electricity used for public service vs. Total sales Capacity factor Efficiency Energy source Energy consumption in the reference year Investment Fixed operating and maintenance costs Variable operating and maintenance costs Operating and maintenance costs Energy selling price Avoided CO2 emissions Energía Lactea, S. A. de C. V. E/824/AUT/2009 MW MW GWh % 0.8 % % PJ 72.2 22.0 Biogas 0.08 Million USD2007 Million USD2007 0.70 Not available Million USD2007 Not available Million USD2007 Not available USD2007/MWh Million tonnes/year Not available 0.0027 5.06 107 Mexico- Products I and II Brief description The power plant consists of a 0.80 MW motor-generator set. Information sources CRE (2009c) CRE (2009d) CRE (2010a) 108 Mexico- Products I and II 2.5.5. Sugar cane bagasse El Higo project Image 21. Facilities at El Higo sugar mill. Source: Pérez (2008) Description Country Facility name Location (Municipality - State) Technology Commissioning date Service type (Public/ nonpublic service) Legal business structure (Public/ Private) Modality in accordance with the LSPEE Permit holder Permit number before the CRE Units Information and data Mexico El Higo El Higo, Veracruz. Steam turbo generators June 2nd, 1999 Non-public Private (Public Limited Company with Variable Capital – S.A. de C.V.) Self-supply Ingenio el Higo, S.A. de C.V. E/136/AUT/99 Reference year 109 Mexico- Products I and II Rated power Net power Gross electricity generation Electricity used for public service vs. Total sales Capacity factor Efficiency Energy source Energy consumption in the reference year Investment Fixed operating and maintenance costs Variable operating and maintenance costs Operating and maintenance costs Energy selling price Avoided CO2 emissions Brief description Information sources MW MW GWh % 12 % % PJ 24.7 11.2 Sugar cane bagasse 0.83 Million USD2007 Million USD2007 17.95 Not available Million USD2007 Not available Million USD2007 Not available USD2007/MWh Million tonnes/year Not available 0.0136 The power plant has 4 steam turbo generators of 1.5, 2.5, 3 and 5 MW for a total capacity of 12 MW. CRE (1999b) CRE (1999c) CRE (2010a) 26 110 Mexico- Products I and II San Miguel del Naranjo project Image 22. Facilities at San Miguel del Naranjo sugar mill. Source: Univision (2007) Description Country Facility name Location (Municipality - State) Technology Commissioning date Service type (Public/ nonpublic service) Legal business structure (Public/ Private) Modality in accordance with the LSPEE Permit holder Units Information and data Mexico San Miguel del Naranjo Ciudad del Maíz, San Luis Potosí. Steam turbo generators Before 1992 Non-public Private (Public Limited Company with Variable Capital – S.A. de C.V.) Usos propios continuos Ingenio San Miguel del Naranjo S.A. de C.V. 111 Mexico- Products I and II Permit number before the CRE Reference year Rated power Net power Gross electricity generation Electricity used for public service vs. Total sales Capacity factor Efficiency Energy source Energy consumption in the reference year Investment Fixed operating and maintenance costs Variable operating and maintenance costs Operating and maintenance costs Energy selling price Avoided CO2 emissions Brief description Information sources 1314 MW MW GWh % 9.3 % % PJ 11.4 1.2 Sugar cane bagasse 2.75 Million USD2007 Million USD2007 5.17 Not available Million USD2007 Not available Million USD2007 Not available USD2007/MWh Million tonnes/year Not available 0.0049 The power plant consists of four 1.50 MW and a 3.30 MW steam turbo generators. 9.3 CRE (2010a) 112 Mexico- Products I and II Melchor Ocampo project Image 23. Facilities at Melchor Ocampo sugar mill. Source: Zucarmex (2010). Description Country Facility name Location (Municipality - State) Technology Commissioning date Service type (Public/ nonpublic service) Legal business structure (Public/ Private) Modality in accordance with the LSPEE Permit holder Permit number before the CRE Units Information and data Mexico Melchor Ocampo Autlán de Navarro, Jalisco. Steam turbo generators February 17th, 2000 Non-public Private (Public Limited Company with Variable Capital – S.A. de C.V.) Self-supply Ingenio Melchor Ocampo, S.A. de C.V. E/161/AUT/2000 113 Mexico- Products I and II Reference year Rated power Net power Gross electricity generation Electricity used for public service vs. Total sales Capacity factor Efficiency Energy source Energy consumption in the reference year Investment Fixed operating and maintenance costs Variable operating and maintenance costs Operating and maintenance costs Energy selling price Avoided CO2 emissions Brief description Information sources MW MW GWh % 6 % % PJ 22.8 6.1 Sugar cane bagasse 0.71 Million USD2007 Million USD2007 8.75 Not available Million USD2007 Not available Million USD2007 Not available USD2007/MWh Million tonnes/year Not available 0.0063 The power plant consists of two 1.5 MW and a 3 MW turbo generators. 12 CRE (2000a) CRE (2000b) 114 Mexico- Products I and II 2.5.6. Steam turbine Plutarco E. Calles steam turbine power plant Image 24. Facilities at Plutarco E. Calles steam turbine power plant. Source: CFE (2010c) Description Country Facility name Location (Municipality - State) Technology Commissioning date Service type (Public/ nonpublic service) Legal business structure (Public/ Private) Modality in accordance with the LSPEE Developer Permit number before the CRE Units Information and data Mexico Plutarco E. Calles La Unión, Guerrero Dual fuel November 18th, 1993 Public Public Parastatal entity Comisión Federal de Electricidad Not applicable 115 Mexico- Products I and II Reference year Rated power Net power Gross electricity generation Electricity used for public service vs. Total sales Capacity factor Efficiency Energy source 1 Energy consumption 1 in the reference year Energy source 2 Energy consumption 2 in the reference year Energy source 3 Energy consumption 3 in the reference year Investment Fixed operating and maintenance costs Variable operating and maintenance costs Operating and maintenance costs Energy selling price Avoided CO2 emissions Brief description MW MW GWh % % % 2008 2100 6883.31 91.3 PJ 37.4 34.5 Fuel oil 36.49 PJ Diesel fuel 0.47 PJ Coal 34.79 Million USD2007 Million USD2007 2,078.20 49.68 Million USD2007 1.57 Million USD2007 51.25 USD2007/MWh Million tonnes/year Not available Not applicable The power plant consists of six 350 MW units. The fuel mixture is 50.86% fuel oil, 48.49% coal and 0.5% diesel fuel. Rankine cycle technology. 116 Mexico- Products I and II Information sources CFE (2008) CFE (2009a) SENER (2009a) Francisco Pérez Ríos steam turbine power plant Image 25. Facilities at Francisco Pérez Ríos steam turbine power plant. Source: CFE (2010c) Description Country Facility name Location (Municipality - State) Technology Commissioning date Service type (Public/ nonpublic service) Legal business structure (Public/ Private) Modality in accordance with Units Information and data Mexico Francisco Pérez Ríos Tula, Hidalgo Steam turbine June 30th, 1991 Public Public Parastatal entity 117 Mexico- Products I and II the LSPEE Developer Comisión Federal de Electricidad Not applicable Permit number before the CRE Reference year Rated power Net power Gross electricity generation Electricity used for public service vs. Total sales Capacity factor Efficiency Energy source 1 Energy consumption 1 in the reference year Energy source 2 Energy consumption 2 in the reference year Investment Fixed operating and maintenance costs Variable operating and maintenance costs Operating and maintenance costs Energy selling price Avoided CO2 emissions Brief description MW MW GWh % % % 2008 1545.6 6774.43 93.0 PJ 50.0 37.0 Fuel oil 65.71 PJ Natural gas 0.25 Million USD2007 Million USD2007 1,579.55 38.55 Million USD2007 1.60 Million USD2007 40.15 USD2007/MWh Million tonnes/year Not available Not applicable The power plant consists of five units with the following capacities: U-1 (300MW), U-2 (300MW), U-3 (322.8MW), U-4 118 Mexico- Products I and II (322.8MW) and U-5 (300MW). The fuel mixture is 99.6% fuel oil and 0.4% natural gas. Rankine cycle technology. CFE (2008) CFE (2009a) SENER (2009a) Information sources 2.5.7. Combined cycle Tamazunchale combined cycle power plant Image 26. Facilities at Tamazunchale combined cycle power plant. Source: CFE (2010c) 119 Mexico- Products I and II Description Units Country Facility name Location (Municipality - State) Technology Commissioning date Service type (Public/ nonpublic service) Legal business structure (Public/ Private) Modality in accordance with the LSPEE Developer Private Independent Power Producer Iberdrola Energía Tamazunchale, S.A. DE C.V. (Public Limited Company with Variable Capital – S.A. de C.V.) E/308/PIE/2004 Permit number before the CRE Reference year Rated power Net power Gross electricity generation Electricity used for public service vs. Total sales Capacity factor Efficiency Energy source 1 Energy consumption 1 in the reference year Investment Fixed operating and maintenance costs Information and data Mexico Tamazunchale Tamazunchale, San Luis Potosí. Combined cycle June 21st, 2007 Non-public MW MW GWh % 1078.84 % % PJ 90.1 51.5 Natural gas 59.56 Million USD2007 Million USD2007 1,148.58 Not available 8518.56 120 Mexico- Products I and II Variable operating and maintenance costs Operating and maintenance costs Energy selling price Avoided CO2 emissions Million USD2007 Not available Million USD2007 Not available USD2007/MWh Million tonnes/year Not available Not applicable Brief description The power plant consists of four 174.82 MW gas turbogenerators and two 189.78MW steam turbogenerators. 100% natural gas. CRE (2004a) CRE (2004b) SENER (2009a) Information sources Altamira combined cycle power plant Image 27. Facilities at Altamira combined cycle power plant. Source: CFE (2010c) 121 Mexico- Products I and II Description Units Country Facility name Location (Municipality - State) Technology Commissioning date Service type (Public/ nonpublic service) Legal business structure (Public/ Private) Modality in accordance with the LSPEE Developer Private Independent Power Producer Iberdrola Energía del Golfo, S.A. de C.V. (Public Limited Company with Variable Capital – S.A. de C.V.) E/288/PIE/2003 Permit number before the CRE Reference year Rated power Net power Gross electricity generation Electricity used for public service vs. Total sales Capacity factor Efficiency Energy source 1 Energy consumption 1 in the reference year Investment Fixed operating and Information and data Mexico Altamira Altamira, Tamaulipas. Combined cycle November 1st, 2006 Non-public MW MW GWh % 1088.84 % % PJ 87 52.8 Natural gas 56.333 Million USD2007 Million USD2007 1,160.93 Not available 8259.26 122 Mexico- Products I and II maintenance costs Variable operating and maintenance costs Operating and maintenance costs Energy selling price Avoided CO2 emissions Million USD2007 Not available Million USD2007 Not available USD2007/MWh Million tonnes/year Not available Not applicable Brief description Information sources 2.5.8. The power plant consists of four 176.395 MW gas turbogenerators and two 191.63MW steam turbogenerators. 100% natural gas. CRE (2003b) SENER (2009a) Gas turbine San Lorenzo Potencia gas turbine power plant Image 28. Facilities at San Lorenzo Potencia gas turbine power plant. Source: CFE (2010c) 123 Mexico- Products I and II Description Units Country Facility name Location (Municipality - State) Technology Commissioning date Service type (Public/ nonpublic service) Legal business structure (Public/ Private) Modality in accordance with the LSPEE Developer Public Parastatal entity Comisión Federal de Electricidad Not applicable Permit number before the CRE Reference year Rated power Net power Gross electricity generation Electricity used for public service vs. Total sales Capacity factor Efficiency Energy source 1 Energy consumption 1 in the reference year Investment Fixed operating and maintenance costs Variable operating and Information and data Mexico San Lorenzo Potencia Cuautlalcingo, Puebla Gas turbine Not available Public MW MW GWh % % % 2008 266 495.16 99.4 PJ 21.3 31.5 Natural gas 5.66 Million USD2007 Million USD2007 142.94 2.62 Million USD2007 0.06 124 Mexico- Products I and II maintenance costs Operating and maintenance costs Energy selling price Avoided CO2 emissions Million USD2007 2.68 USD2007/MWh Million tonnes/year Not available Not applicable Brief description The power plant consists of two units with the following capacities: U-1 (133MW), U-2 (133MW). 100% natural gas. Brayton cycle technology. CFE (2008) CFE (2009a) SENER (2009a) Information sources Enertek gas turbine power plant Image 29. Facilities at Enertek gas turbine power plant. Source: Iberdrola (2003) 125 Mexico- Products I and II Description Units Country Facility name Location (Municipality - State) Technology Commissioning date Service type (Public/ nonpublic service) Legal business structure (Public/ Private) Modality in accordance with the LSPEE Developer Permit number before the CRE Reference year Rated power Net power Gross electricity generation Electricity used for public service vs. Total sales Capacity factor Efficiency Energy source 1 Energy consumption 1 in the reference year Investment Fixed operating and maintenance costs Variable operating and maintenance costs Operating and maintenance Information and data Mexico Enertek Altamira, Tamaulipas. Gas turbine February 1st, 1998 Non-public Private Cogeneration Enertek, S.A. DE C.V. E/36/COG/96 MW MW GWh % 128 % % 89.8 1007 PJ Natural gas Not available Million USD2007 Million USD2007 152.47 Not available Million USD2007 Not available Million USD2007 Not available 126 Mexico- Products I and II costs Energy selling price Avoided CO2 emissions USD2007/MWh Million tonnes/year Not available Not applicable Brief description Not available Information sources CRE (1996) CRE (2010a) Pemex gas turbine power plant Description Units Country Facility name Location (Municipality - State) Technology Commissioning date Service type (Public/ nonpublic service) Legal business structure (Public/ Private) Modality in accordance with the LSPEE Developer Public Cogeneration Pemex-Gas y Petroquímica Básica, Complejo Procesador de Gas Cd. Pemex E/587/COG/2007 Permit number before the CRE Reference year Rated power Net power Gross electricity generation Information and data Mexico Not available Macuspana, Tabasco Gas turbine March 8th, 2007 Non-public MW MW GWh 59 495.6 127 Mexico- Products I and II Electricity used for public service vs. Total sales Capacity factor Efficiency Energy source 1 Energy consumption 1 in the reference year Investment Fixed operating and maintenance costs Variable operating and maintenance costs Operating and maintenance costs Energy selling price Avoided CO2 emissions % % % PJ Natural gas 0.616 Million USD2007 Million USD2007 53.10 Not available Million USD2007 Not available Million USD2007 Not available USD2007/MWh Million tonnes/year Not available Not applicable Brief description Information sources 2.5.9. 95.9 The power plant consists of two gas turbogenerators with 24 and 35 MW, respectively. The installed power capacity is 59 MW. CRE (2007b) CRE (2010a) Internal combustion Gral. Agustín Olachea (San Carlos) internal combustion power plant 128 Mexico- Products I and II Image 30. Facilities at Gral. Agustín Olachea (San Carlos) internal combustion power plant. Source: CFE (2010c) Description Country Facility name Location (Municipality - State) Technology Commissioning date Service type (Public/ nonpublic service) Legal business structure (Public/ Private) Modality in accordance with the LSPEE Developer Units Information and data Mexico Gral. Agustín Olachea (San Carlos) Comondú, Baja California Sur Internal combustion engine August 16th, 1991 Public Public Parastatal entity Permit number before the CRE Comisión Federal de Electricidad Not applicable Reference year 2008 129 Mexico- Products I and II Rated power Net power Gross electricity generation Electricity used for public service vs. Total sales MW MW GWh % 104.12 Capacity factor Efficiency Energy source 1 Energy consumption 1 in the reference year Energy source 2 Energy consumption 2 in the reference year Investment Fixed operating and maintenance costs Variable operating and maintenance costs Operating and maintenance costs Energy selling price Avoided CO2 emissions % % PJ 68.1 47.1 Fuel oil 4.75 PJ Diesel fuel 0.37 Million USD2007 Million USD2007 174.16 10.77 Million USD2007 2.08 Million USD2007 12.85 USD2007/MWh Million tonnes/year Not available Not applicable Brief description Information sources 621.06 96.4 The power plant consists of three units with the following capacities: U-1 (31.5), U-2 (31.5MW) and U-3(41.12MW). The fuel mixture is 92.8% fuel oil and 7.2% diesel. CFE (2008) CFE (2009a) SENER (2009a) 130 Mexico- Products I and II Baja California Sur I internal combustion power plant Description Units Country Facility name Location (Municipality - State) Technology Commissioning date Service type (Public/ nonpublic service) Legal business structure (Public/ Private) Modality in accordance with the LSPEE Developer Public Parastatal entity Comisión Federal de Electricidad Not applicable Permit number before the CRE Reference year Rated power Net power Gross electricity generation Electricity used for public service vs. Total sales Capacity factor Efficiency Energy source 1 Energy consumption 1 in the reference year Investment Fixed operating and maintenance costs Information and data Mexico Baja California Sur I La Paz, Baja California Sur Internal combustion engine July 28th, 2005 Public MW MW GWh % % % 2008 78.9 524.66 96.4 PJ 75.9 42.6 Fuel oil 4.43 Million USD2007 Million USD2007 129.48 8.13 131 Mexico- Products I and II Variable operating and maintenance costs Operating and maintenance costs Energy selling price Avoided CO2 emissions Million USD2007 2.25 Million USD2007 10.38 USD2007/MWh Million tonnes/year Not available Not applicable Brief description The power plant consists of two units with the following capacities: U-1 (37MW), U-2 (41.90MW). 100% fuel oil. CFE (2008) CFE (2009a) SENER (2009a) Information sources 2.5.10. Coal-fired power plants José López Portillo (Río Escondido) coal-fired power plant Image 31. Facilities at José López Portillo (Río Escondido) coal-fired power plant. Source: CFE (2010c) 132 Mexico- Products I and II Description Units Country Facility name Location (Municipality - State) Technology Commissioning date Service type (Public/ nonpublic service) Legal business structure (Public/ Private) Modality in accordance with the LSPEE Developer Public Parastatal entity Comisión Federal de Electricidad Not applicable Permit number before the CRE Reference year Rated power Net power Gross electricity generation Electricity used for public service vs. Total sales Capacity factor Efficiency Energy source 1 Energy consumption 1 in the reference year Energy source 2 Energy consumption 2 in the reference year Investment Fixed operating and Information and data Mexico José López Portillo (Río Escondido) Río Escondido, Coahuila Coal-fired September 21st, 1982 Public MW MW GWh % % % 2008 1200 9754.91 93.0 PJ 92.8 35.6 Coal 98.53 PJ Diesel 0.22 Million USD2007 Million USD2007 1,816.65 44.90 133 Mexico- Products I and II maintenance costs Variable operating and maintenance costs Operating and maintenance costs Energy selling price Avoided CO2 emissions Million USD2007 2.28 Million USD2007 47.18 USD2007/MWh Million tonnes/year Not available Not applicable Brief description The power plant consists of four 300 MW units. The fuel mixture is 99.8% coal (domestic) and 0.2% diesel. CFE (2008) CFE (2009a) SENER (2009a) Information sources Carbón II coal-fired power plant Image 32. Facilities at Carbón II coal-fired power plant. Source: CFE (2010c) 134 Mexico- Products I and II Description Units Country Facility name Location (Municipality - State) Technology Commissioning date Service type (Public/ nonpublic service) Legal business structure (Public/ Private) Modality in accordance with the LSPEE Developer Public Parastatal entity Comisión Federal de Electricidad Not applicable Permit number before the CRE Reference year Rated power Net power Gross electricity generation Electricity used for public service vs. Total sales Capacity factor Efficiency Energy source 1 Energy consumption 1 in the reference year Energy source 2 Energy consumption 2 in the reference year Investment Information and data Mexico Carbón II Nava, Coahuila Coal-fired November 2nd, 1993 Public MW MW GWh % % % 2008 1400 8034.23 91.9 PJ 65.5 38.5 Coal 75.03 PJ Diesel 0.91 Million USD2007 2,119.42 135 Mexico- Products I and II Fixed operating and maintenance costs Variable operating and maintenance costs Operating and maintenance costs Energy selling price Avoided CO2 emissions Million USD2007 52.38 Million USD2007 1.88 Million USD2007 54.26 USD2007/MWh Million tonnes/year Not available Not applicable Brief description The power plant consists of four 350 MW units. The fuel mixture is 98.8% coal (domestic and imported) and 1.2% diesel. CFE (2008) CFE (2009a) SENER (2009a) Information sources 2.5.11. Nuclear Laguna Verde nuclear power plant Image 33. Facilities at Laguna Verde nuclear power plant. Source: CFE (2010c) 136 Mexico- Products I and II Description Units Country Facility name Location (Municipality - State) Technology Commissioning date Service type (Public/ nonpublic service) Legal business structure (Public/ Private) Modality in accordance with the LSPEE Developer Public Parastatal entity Comisión Federal de Electricidad Not applicable Permit number before the CRE Reference year Rated power Net power Gross electricity generation Electricity used for public service vs. Total sales Capacity factor Efficiency Energy source 1 Energy consumption 1 in the reference year Investment Fixed operating and maintenance costs Variable operating and Information and data Mexico Laguna Verde Alto Lucero, Veracruz Nuclear June 29th, 1990 Public MW MW GWh % % % 2008 1364.88 9803.98 95.3 PJ 82.0 33.3 Uranium dioxide 106.13 Million USD2007 Million USD2007 3,135.70 65.82 Million USD2007 3.32 137 Mexico- Products I and II maintenance costs Operating and maintenance costs Energy selling price Avoided CO2 emissions Million USD2007 69.14 USD2007/MWh Million tonnes/year Not available Not available Brief description The power plant consists of two 682.4 MW units. Uranium dioxide. Information sources CFE (2008) CFE (2009a) SENER (2009a) 138 Mexico- Products I and II 2.6. Lessons learned When taking into account Mexico’s current energy problem, considering its vast renewable resources, the existing institutional frame work, the progress made in the laws encompassed in the 2008 energy reform and the newly issued regulatory instruments, and the analysis provided in previous section, it is clear that it is feasible to make an energy transition which heavily relies on the massive utilization of renewable energies. We have learned that the enactment of the Law for the Use of Renewable Energies and Financing of Energy Transition (LAERFTE enacted as of year 2008) (DOF, 2008d) was necessary to develop national strategies, funds and several programs and regulatory measures intended to foster the massive use of RE. This process has been an achievement of the Mexican society, since the original reform only considered to the oil sector. The list of several renewable energy facilities provided us with some examples illustrating that the distributed generation nature of renewable energies makes their massive utilization a shared and coordinated effort among public, private and social sectors in the context of their constitutional competences. We have also learned that there are important niche markets for RE, facilitating access to adequate financing schemes. Finally, we learned that RE facilities are those with most possibilities to promote local sustainable development, particularly at small and medium scale. RE facilities may bring important environmental benefits such as climate change mitigation, and they impose a lower impact on local environment. Furthermore, they can also provide other benefits such as the sustainment of local productive activities and social development, the valorization of local renewable resources and the encouragement of technology development and local and national engineering capacities. The latter will help us to set up a selection criterion for the 2 projects that greatly contribute to sustainable development at local, national and international levels, and therefore, enjoy great public acceptance. 139 Mexico- Products I and II 3. State of the art (case studies) 3.1. Introduction In Mexico, the use of renewable energies for power generation is an activity that can be carried out by both the federal and local governments and even by individuals in accordance with the provisions of the Public Electricity Service Law (LSPEE) (DOF, 1992) —as it foresees the utilization of local renewable resources under the modalities of self-supply, cogeneration and small power producer—. Although generating projects for public electricity service, promoted by the state, would possibly represent an overall benefit to the country from a regional sustainability perspective, projects intended to supply local needs (self-supply) reach sustainability more clearly and contribute directly to local development, improving the welfare of the communities at project sites. This particular situation can be found in Mexico in two renewable energy projects which clearly meet with the following features of sustainability: local economic growth, enhanced local social welfare, clean energy production (carbon emission reductions) and replicability in Latin America and the Caribbean. One of these projects -Bioenergía de Nuevo León- provided a solution for all aspects of a local garbage problem, namely, social problems associated with scanvengers, garbage environmental problems of its own, and the generation of direct economic benefits to population due to the energy use of biogas. The other case study, La Rumorosa wind farm, will allocate economic benefits, derived from the operation of this facility to supply the electricity needs for municipal street lighting, to the poorest people so that they have access to more efficient appliances. In both case studies, the population was directly benefited by the implementation of a renewable energy project, while they participated and reached consensus on the projects. Similarly, important economic benefits were also generated, thus amply demonstrating the sustainability of both projects to the extent they expect to benefit from the Clean Development Mechanism, which requires, among others, that participating projects to contribute to the local sustainable development at project sites. 3.2. Methodology 3.2.1. Information sources The following information sources were used to select and describe both case studies: a) Primary. Questionnaire and interview with project authorities. A questionnaire was sent to the Technology and Development Director of SIMEPRODE (Ingeniero 140 Mexico- Products I and II Armando Cabazos) and an interview with the General Director of the Baja California State Energy Commission (Licenciado David Muñoz Andrade) was conducted. The questions asked were: • How did the idea for this project originate? Is it part of a national or international initiative? Did any university or non-governmental organization take part in? Is it a demand of the local society? Is it a promise made in an election campaign? • Which legal, financial, technological, social or other kind of barriers did the project implementation face? • Did the project get financing from public funds (federal, state or municipal), private investors (either national or international) or from international aid? • How did population participate in the project? Did population participate in any consultation process for the project implementation? Did the project enjoy public acceptance? Was there some sort of social protest? • How did the project secure access to land? Is it a property of the municipality? Was it expropriated? Was it donated by the owners of communal land? • Who were the key players and which role did they have in project development (Project developer, the mayor, NGOs or civil society)? • Which are the main features of the project: types of financing and investors, financial or other kind of commitments to the municipality, project partners, share of the electricity purchased by the municipality and the economic savings that it represents? • Besides power generation, what other benefits does the project bring to society? Will the project create local jobs? Where did the equipment and materials for project development come from? Is there any training or workshop foreseen for the population? • What is the reliability of the power generated by the project? Are there frequent power interruptions? b) Secondary. A literature review was conducted to identify technical, environmental, social and economic aspects of the projects. The following information sources were consulted: • Energy Regulatory Commission Website. Statistics section for the electricity sector provides a list of all permits granted to private-owned power plants; it also summarizes relevant information such as location, investment, installed 141 Mexico- Products I and II capacity and electricity generation, energy source and project promoters (CRE, 2010a). In this section it is also possible to find the resolutions and permit titles of all projects regulated by the CRE. • Local newspapers. Information on local opinion about the project, placing special emphasis on site conditions before and after project implementation. • The State government’s Web sites. Case study projects were promoted by state agencies. Therefore, comprehensive information on these projects is widely available on these sites (Gobierno del Estado de Nuevo León, 2010a; Gobierno del Estado de Baja California a, b, c, d y e). • Sistemas de Energía Internacional S.A. de C.V Website, (SEISA) (2010), promoter company of the Bioenergía de Nuevo León project. • The UNFCCC Website was consulted with the aim of gathering information on Project Design Documents (PDD), since case study projects are promoted as activities suitable for the Clean Development Mechanism (MDL). • Other websites of national and international institutions such as the SEMARNAT, USAID and the IBRD, among others. 3.2.2. Selection criteria The selection of case studies was carried out by keeping in mind that energy provision through any renewable energy project must clearly contribute to local sustainable development (see figure 10). 142 Mexico- Products I and II Social development Economic development Sustainable development Environmental preservation Figure 18 Selection criteria for case studies. Source: Own elaboration. In particular, the following criteria were applied: a) Operational projects. With the aim of guaranteeing that all case studies are operational facilities, instead of projects at the planning stage, the first selection criterion was that the facility had already came into operation. b) Participation and local acceptance. Newspapers and other secondary sources were searched with the aim of determining whether or not the project enjoyed social acceptance, selecting those which did showed this feature, or at least did not face opposition from local stakeholders. c) Social, environmental and economic benefits. The project must clearly generate social benefits to local population as well as to secure the preservation of the environment by means of clean electricity generation. d) Economic sufficiency. The project must clearly generate enough economic benefits so that it can cover its own operating and maintenance costs over the life time of 143 Mexico- Products I and II the facility. Out of all renewable energy projects, which have been installed in Mexico over the last years, two of them fully comply with these criteria: Bioenergía de Nuevo León. It is the largest project of its kind in Latin America. It generates electricity from landfill biogas in the suburbs of Monterrey, Nuevo León, and supplies electricity for street lighting in several municipalities; it powers the subway system of Monterrey and delivers electricity to office buildings of several bodies of the state government of Nuevo León (Medina, 2006). Source: Medina (2006) La Rumorosa I wind farm. It is the first wind facility, installed in the state of Baja California, and supplies electricity to the municipality of Mexicali, benefiting directly to 40,000 families in the municipalities of Mexicali and Tecate (García, 2008). Source: Arqtropolis (2009). 3.3. Bioenergía de Nuevo León Project (Phase I and II) 3.3.1. General project description The Bioenergía de Nuevo León Project is the first renewable energy project of its kind in Mexico and Latin America (SEISA, 2010). The project takes advantage of the biogas produced in a landfill, located in the municipality of Salinas Victoria, Nuevo León (see figure 19). The project was originally planned with a net power capacity of 12 MW and a total generation of roughly 85,000 MWh per year (Argüelles, 2007) mainly for street lighting purposes of the municipalities of Nuevo León state: Monterrey, San Pedro Garza García, San Nicolás de los Garza, Apodaca, General Escobedo, Santa Catarina and Guadalupe, as well as its use in the headquarters of the Water and Drainage Services of 144 Mexico- Products I and II Monterrey, the Public Transport System “metro”, the Government Palace of Monterrey and the Integrated Family Development Services (DIF) of Nuevo León. Furthermore, electricity generated is also used for self-consumption purposes of SIMEPRODE and at the landfill’s facilities (CRE, 2002c). Figure 19. Bioenergía de Nuevo León (BENLESA) project location. Source: SEISA (2010). Bioenergía de Nuevo León S.A. (BENLESA) is a joint venture between the public company Bioeléctrica de Monterrey, S. A. de C. V. and the Nuevo Leon State Government through the Integrated System for Ecological Waste Management and Processing (SIMEPRODE), a decentralized public entity (SEISA, 2010). Figure 20 shows the project scheme. 145 Mexico- Products I and II Figure 20. Bioenergía de Nuevo León Project scheme. Source: Saldaña (2006). 3.3.2. Objectives The Integrated System for Ecological Waste Management and Processing (SIMEPRODE) is a decentralized public entity of the Nuevo Leon State Government whose main purpose is to provide services for collection, reception, transport, warehousing, storage, utilization, recycling, transformation, processing, commercialization, final disposal, and where appropriate, confinement of all kinds of solid waste, including especial and hazardous waste management (Gobierno del Estado de Nuevo León, 2010b). The Bioenergía de Nuevo León (BENLESA) power plant makes use of the biogas produced in SIMEPRODE’s landfill, located in Salinas Victoria, Nuevo León (Saldaña, 2009). Power generated is intended for thirteen associated facilities under a cogeneration scheme permit —Permit number E/217/COG/2002— (CRE, 2002b), and granted by the Energy Regulatory Commission (CRE) as listed below: Own consumption: 1. Bioenergía de Nuevo León, S.A. de C. V. 2. Integrated System for Ecological Waste (SIMEPRODE). Street lighting: 3. 4. 5. 6. 7. Management and Processing Municipality of Monterrey, State of Nuevo León Municipality of San Pedro Garza García, State of Nuevo León Municipality of San Nicolás de los Garza, State of Nuevo León Municipality of General Escobedo, State of Nuevo León Municipality of Santa Catarina, State of Nuevo León 146 Mexico- Products I and II 8. Municipality of Guadalupe, State of Nuevo León 9. Municipality of Apodaca, State of Nuevo León Other associates: 10. Water and Drainage Services of Monterrey, I.P.D. 11. Public Transport System “Metrorrey”, O.P.D. 12. State government of Nuevo León (Headquarters) 13. Integrated Family Development Services (DIF), State of Nuevo León. 3.3.3. Stakeholders analysis Beneficiaries Monterrey’s citizens are benefiting from this project in several areas. From the environmental perspective, municipal solid waste is adequately managed while methane emissions are avoided by using it for power generation. The project also represents savings for operating costs of municipality services(such as street lighting and transport), since generated electricity is used to supply their own needs (Argüelles, 2007). Additionally, the major social and environmental benefits of such improved management practices of landfills will undoubtedly have a positive effect on health and local environment. The project also creates local jobs (2 Grados, 2010). Sources of financing The project investment totaled $17.62 million dollars (CRE, 2010a) and were funded by either international or national and local agents. Table 9 shows each agent’s participation in financing the development of the Bioenergía de Nuevo León project. Table 9. Financing of the Bioenergía de Nuevo León project. Sources World (GEF) SEISA Amount Bank 6.29 million dollars (OPS, 2004) 53% of capital needed (Saldaña, 2009) 147 Mexico- Products I and II SIMEPRODE 47% of capital needed (Saldaña, 2009) Local authorities Local authorities promoted the project and participated as partners of the self-supply society and currently operate the project. Research centers, universities It is worth mentioning the role that academic institutions within the region have played from the capacity building of human resources working at the plant. Lic. Ovidio Alfonso Elizondo Treviño, a graduate student of the Instituto Tecnológico y de Estudios Superiores de Monterrey (Monterrey Institute of Technology and Higher Education) and Director of SIMEPRODE, as well as institutions including the National Autonomous University of Nuevo León, the Monterrey Institute of Technology and the University of Texas, have contributed with research or renewable energy sources. A Cooperation Agreement with the institutions mentioned above was signed on March 26th, 2009. 3.3.4. Legal aspects The project’s legal framework covers two areas: waste management services and permits for power generation from biogas under a self-supply scheme. According to the Public Electricity Service Law (LSPEE), electricity generation for public service (grid-connected users) is an activity exclusively reserved to either the State or Independent Power Producers —for the sole purpose of selling the power produced to the State—. Other activities such as Self-supply, Cogeneration, Small power production and power import and export are open to States, Municipalities and individuals, but subject to the authorization of the Energy Regulatory Commission. Given the dual nature of biogas production (biogas is considered as both a fuel produced in the process and as a fuel used to generate electricity), the best suited modality requires a cogeneration permit. Legal framework for collection, disposal, treatment and end use of waste SIMEPRODE was created as a decentralized public entity; its establishment was published by the State Congress in the Official Gazette of the State of Nuevo Leon by means of the Decree Nr. 100 as of June 1st, 1987; it was further reformed by the Decree Nr. 388, published in the Official State Gazette as of October 16th, 2000, and finally by the Decree Nr. 256, published in the Official State Gazette as of August 17th, 2005 (Gobierno del Estado de Nuevo León, 2010c). 148 Mexico- Products I and II • In order to fulfill its purpose, the Integrated System for Ecological Waste Management and Processing will have the following attributions (Gobierno del Estado de Nuevo León, 2010b); I. To build, manage, maintain, operate and rehabilitate sites and facilities where services for collection, reception, transport, warehousing, storage, utilization, recycling, transformation, processing, commercialization and confinement of solid waste take place, including special and hazardous waste management and its by-products, provided that such services were previously authorized by the competent authorities as well as they comply with federal standards and regulations; II. To implement and manage either directly or through third parties works necessary for collection, reception, transport, warehousing, storage, utilization, recycling, transformation, processing, commercialization and confinement of solid waste, including special and hazardous waste management and its by-products; III. To provide services for collection, transport, and confinement of solid waste, including special and hazardous waste management, either directly by the municipalities or through third parties such as any individual or company interested in; IV. To conclude all kinds of agreements, contracts and general legal acts with individuals or public/ national private companies; V. To manage and promote cooperation among institutions/ public/ private sector entities or individuals/ companies; VI. To obtain financing for the fulfillment of its purpose; VII. To acquire, lease, receive as commodate, and in general to contract the use or temporary possession of personal assets or real estate properties necessary to provide its service in accordance with the applicable legal acts; VIII. To elaborate socio-economic studies and establish service fees accordingly; IX. To establish and manage offices and facilities required to operate the system within the communities and population centers; X. To administrate all system revenues and the acquired assets; XI. Others derived from the applicable legal acts. Project modality for power generation from biogas. In accordance with Article 36 of the LSPEE (DOF, 1992), and due to project’s nature, on June 21st, 2002, BENLESA requested the Energy Regulatory Commission (CRE) a permit for cogeneration with the aim of using the biogas produced at SIMEPRODE’s landfill (CRE, 2002c). 149 Mexico- Products I and II Since it met all requirements, as established by the LSPEE’s ordinance (DOF, 1993b), and also submitted all information in accordance with the authorized standard form, the CRE granted to Bioenergía de Nuevo León, S.A. de C.V. a permit to generate electric power under the cogeneration modality, as stated in Permit Nr. E/217/COG/2002. Power generated during night period (7:00 p.m. to 7:00 a.m.) is mainly intended for street lighting by using the national interconnected system of the Federal Electricity Commission (CFE). During day period electric power is used to supply the needs of the remaining associates, emphasizing those of the Public Transport System “Metrorrey”, O.P.D. (Argüelles, 2007). It is estimated that the third phase of the project will generate around 120,000 MWh per year, covering 100% of electricity needs for Monterrey’s street lighting (equivalent to supply electricity to 34,000 social-interest houses) (Arguelles, 2010). Further details on interconnection and transmission fees are provided in section 4 and are applicable for both case studies. 3.3.5. Technological aspects Technical data and grid interconnection Facilities basically consist of two systems: a) A biogas collection network, covering an area of approximately 100 has, where nonharzadous municipal solid waste were disposed of between the years 1991 to 2005. This system is composed of several phases or sub-systems: collection, transport, suction, cleaning, and dosing. b) A power generation system composed of 12 JGC 320 GS-L.L Jenbacher internal combustion engines with a capacity of 1.06 MW each. The plant is of a modular design with individual and integrated motor-generator sets, facilitating their instalation, operation, maintainance and flexibility. c) Medium voltaje power cables (34.5 kV) are connected to a metal-clad switchgear which also contains CFE’s feeder. Availibility/ resource potential BENLESA’s current generating capacity (Argüelles, 2010) is: • Rated power capacity 12.72 MW • Auxiliary loads 0.72 MW • Net power capacity 12.00 MW Average annual electric power generation is 85.254 GWh for an annual biogas consumption of approximately 36.229 million m3. 150 Mexico- Products I and II Figure 21. Operational scheme of Bioenergía de Nuevo León project. Source: Saldaña (2006). 151 Mexico- Products I and II The electricity generated at night (7:00 p.m. to 7:00 a.m.) is mainly used for street lighting purposes through CFE’s national interconnected system (CFE) while during day periods it is used to supply the needs of the Water and Drainage Services of Monterrey, the Public Transport System “metro”, the State Government of Nuevo Leon (General Offices), Integrated Family Development Services (DIF) of Nuevo León, emphazising those of the Public Transport System (see Figure 13). 3.3.6. Economic aspects Financing Project development was possible thanks to the support of the Global Environmental Facilities (GEF) by means of a 6.29 million dollar grant (OPS, 2004) and the collaboration of public and private entities, which constituted a society to share the risks and benefits derived from the construction of the biogas project; SIMEPRODE contributed with 47% of the capital, while SEISA and Grupo GENTOR, the latter a group established by Mr. Javier Garza, a Nuevo Leon renowned person, contributed with 53% of the remaining investment requirements (Saldaña, 2009). Due to the success obtained with the first project, SIMEPRODE’s operations were expanded to other 13 landfills that provide services to 29 municipalities, and thus controlling 57% of all state municipalities, reaching slightly above 85% of total generated waste (Cantú, 2008). Economic sustainability This project generates two kinds of economic benefits, on the one hand, it saves money that otherwise would have been spent by the municipality on the purchase of electricity to CFE for street lighting, public transport, and waste management, and, on the other, the project will benefit from carbon bonds and will receive $37.2 million dollars (García y González, 2009). Due to these economic benefits, the project achieves an economic sustainability over its useful life. Tariffs Depending on the operation conditions of the facility, the number of operation hours and the energy demand, several electricity tariffs are applicable to this project, but the average price was $0.087 USD/KWh during the year 2008 (UNFCCC, 2007). As for transmission service fees, the CRE’s newly issued resolutions (DOF, 2010d) for the promotion of renewable energies establish that these must be paid for on monthly basis, and depending on the voltage level of the required transmission infrastructure —assuming 152 Mexico- Products I and II a radial power system that will determine the voltage level—. Thus, transmission service fees (in pesos) for all different voltage levels, published on January 1st, 2010, are: • High voltage: 0.03037 $/kWh. • Medium voltage: 0.03037 $/kWh. • Low voltage: 0.06074 $/kWh. The aforementioned fees include all costs related to the use of infrastructure, losses, ancillary services and a fixed charge for contract administration. The transmission service fee for each load point is calculated as the sum of all fees for each of the voltage levels required. Under no circumstances, the transmission service will include 2 or more times the fee applicable to each voltage level. 3.3.7. Social aspects Stakeholders involvement Encouraged by increasing pollution, largely due to illegal dumps in the metropolitan area of Monterrey, authorities were looking for a fundamental solution, which resulted in establishment of SIMEPRODE by means of the Decree Nr. 100 as of June 1st, 1987, issued by the State Congress of Nuevo Leon. The decree defines the functions that SIMEPRODE must perform. Subsequently, the State Congress of Nuevo Leon amended SIMEPRODE’s purpose by means of the Decree Nr. 388 as of October 16th, 2000. Its purpose is to provide services for collection, reception, transport, warehousing, storage, utilization, recycling, transformation, processing and commercialization of all kinds of solid waste and byproducts in accordance with applicable laws to either any municipality of the state or any individual or company. The last amendment took place on August 15th, 2005 by means of the Decree Nr. 256. The decree also authorizes the provision of services at state level, as well as the management of different kinds of wastes, among other attributions. This allowed the creation of the metropolitan landfill, located at Salinas Victoria, N.L., and a plant for waste classification, along with the opening of other landfills within the state, but out of the metropolitan zone, and SIMEPRODE’s participation for power generation from biogas produced at Salinas Victoria landfill (Gobierno del Estado de Nuevo León, 2010c). SIMEPRODE had to overcome many obstacles before reaching its current position and having a specialized staff to operate the facilities. It also required efforts to attain financial self-sufficiency and to secure the participation and support from municipalities by means of long-term goals and objectives, while meeting with applicable Laws, Regulations, and 153 Mexico- Products I and II Mexican Official Standards. However, SIMEPRODE’s objectives were recently clarified aiming at continuity by means of a customer-oriented culture and a corporate vision, which is not only based on competitiveness, but also oriented towards increased productivity and resource utilization. This has resulted in a sound financial structure. Furthermore, an engineering department focused on environmental preservation was established. Thus, and by replicating best international practices, the compliance with laws and environmental standards are guaranteed through inspection and verification procedures. Figure 22 schematically shows the stakeholders involvement. Figure 22 Stakeholders involved in the Bioenergía de Nuevo León project. Source: Saldaña (2006). Positive social impacts SIMEPRODE extracts materials susceptible to be recycled. A waste classification plant processes around 800 tonnes of residues per day, out of which approximately 50 tonnes are reincorporated into industrial processes through buying and selling of the recovered merchandise. 154 Mexico- Products I and II 70% of municipal solid waste was disposed at uncontrolled dumpsites in Mexico until the mid 90s, imposing negative impacts on land, surface and underground bodies of water as well as on the health of people living in the nearby due to bad odors, diseases such as cholera, cancer and even death (OPS, 2004). Similarly, there are frequent changes in the managerial staff in charge of waste services in most municipalities (OPS, 2004), lowering the technical capacity for solving waste management. A different situation can be seen in the metropolitan areas or municipalities with higher resources as in Monterrey —with an annual income per capita 234% above the national average—. SIMEPRODE’s purpose is to provide services for collection, reception, transport, warehousing, storage, utilization, recycling, transformation, processing and commercialization of all kinds of solid waste and by-products to either any municipality of the state or any individual or company. It began operations on September 5th, 1990 and built the first landfill at the municipality of Salinas Victoria, N. L. Through the implementation of this project, solid waste management practices will be improved by means of the dump closure and remediation program. The main benefits derived from improved practices on landfills will have without a doubt a positive impact on health and local environment (2 Grados, 2010). 3.3.8. Environmental aspects Positive and negative environmental impacts Since this project provided a solution to an existing environmental problem —waste management— its environmental impacts are entirely positive, highlighting those related to the avoidance of 177,062 tCO2eq (International Bank for Reconstruction and Development, 2009). Environmental impact studies BENLESA obtained all environmental permits required to install and operate the equipments. To this end, an Environmental Impact Statement was submitted to the Nuevo Leon regional office of the SEMARNAT on June 6th, 2002 (File Nr 847). As stated in the document Nr. 510.003.03.074/2 as of July 1st, 2002, the SEMARNAT authorized the development of the project. Likewise, the same document stated that a risk study was “not” necessary. BENLESA holds the Environmental License Nr. LAU-19/00086-06 and is registered with the number 3083 in the National Program for Voluntary Environmental Audits. On the other hand, SIMEPRODE’s landfill holds all land use authorizations for its 155 Mexico- Products I and II operation and that of the cogeneration plant, as stated in the following official documents (Argüelles, 2010): • Document Nr. 0024/H-0.4/96, file Nr. 1942/95, Subsecretaría de Desarrollo Regional y Urbano del Gobierno del Estado de Nuevo León (Undersecretariat of Regional and Urban Development of the State Government of Nuevo Leon), which in the regularization of land, granted the title on January 26th, 1996 as part of its Fideicomiso Programa de Ordenamiento Urbano (Urban Enhancement Trust Fund). • Document Nr. 051/H-0.1/97 as of December 8th, 1997, issued by the Secretaría de Desarrollo Urbano y Obras Públicas del Gobierno del Estado de Nuevo León (Secretariat of Urban Development and Public Works of the State Government of Nuevo Leon) granting the authorization for the final disposal of non-hazardous industrial solid waste. • Document Nr. DUOPSV-21/2002, file Nr. 23/2002 granting the authorization for a land use change from a Solid Waste Processing Plant to a Cogeneration Plant. 3.3.9. Replicability This and the next sections were developed in accordance with information available at the Bank Information Center (BIC) (Islas, J. et al, 2010). 3.3.10. Barriers Legal Barriers From the legal perspective, this project faced two barriers, on the one hand, those associated with waste management, and on the other, those related to administrative procedures for biogas power generation, since there are no legal mechanisms in current legislation allowing for state governments to act as legal promoters under the self- supply and cogeneration modalities, except for private entities that can establish a society with the public sector. Efforts made to overcome such barriers substantially increase transaction costs for state governments as well as the legal project complexity, especially when local renewable resources are used. For this reason, and in spite of the fact that the government either owns the land and facilities or at least they are within its competence, the permit holder is either a municipality or a mixed capital company, while participants may be multiple stakeholders under several specific legal acts such as municipalities and private companies. Institutional Barriers 156 Mexico- Products I and II This barrier is related to the learning-by-doing process of state governments when developing energy projects as well as to the lack of clarity in the participation of federal institutions such as CFE, CRE, SENER, SEMARNAT and SHCP. This lack of institutional coordination also increases transaction costs and project complexity during the promotion and management of renewable energy projects at state level. Technical Barriers Technical barriers were related to the resource assessment in order to estimate biogas production as well as to the development of the engineering works required to collect the biogas and to produce electric power. Financial Barriers The lack of financing for renewable energy projects was a very important barrier in both analyzed projects. High up-front costs associated with landfill biogas recovery, and the tight state budgets, the lack of specific funds to support energy projects at federal level, and lastly, adverse conditions for state governments to access loans and grants from national and international institutions, makes practically federal sources of financing, through the national development banks, the only way available to develop this kind of projects. This results in an additional financial cost, and it makes more complex project transactions. Infrastructure Barriers First barrier is associated with the distance between the project site and the nearest transmission line, as well as to its transmission capacity. This resulted in increased costs due to transmission lines reinforcement, since current legislation requires permit holders to pay for the reinforcement costs as well as for other upgrades. These costs are allocated to the permit holders through the interconnection and transmission service agreements concluded with the CFE. Additionally, and due to project’s nature, the second barrier was related to the lack of infrastructure in Mexico for either municipal solid waste management or biogas recovery at current facilities. 3.3.11. Success factors for project replicability Success factors for project replicability are described next: Legal barriers were overcomed with SIMEPRODE’s participation as a decentralized 157 Mexico- Products I and II public entity responsible for waste management and having the following special attributions to comply with its objectives: a) To conclude all kinds of agreements, contracts and general legal acts with individuals or public/ national private companies, which are necessary for the development of the project. b) To manage and promote cooperation among institutions/ public/ private sector entities or individuals/ companies which is necessary for the development of the project. c) To obtain financing for the development of the project. As for power generation, the establishment of a strategic alliance between the public sector (Bioelectrica de Monterrey) and the State of Nuevo Leon (represented by the SIMEPRODE) was necessary. This resulted in a newly constituted society (BENLESA) which was authorized by the CRE for cogeneration activities from the biogas recovered at SIMEPRODE’s landfill. Institutional barriers were overcomed step-by-step, meeting with all requirements and administrative procedures as requested by state and federal authorities. Similarly, some legal voids were filled through the signing of contracts among all entities involved, and where applicable, through resolutions issued by either the local congress or the town council. Technical barriers were resolved mainly due to feasibility studies —financed by the GEF/ World Bank— intended to estimate the resource potential, besides the involvement of CFE in project activities. Financial barriers were basically solved thanks to the funds obtained from state and federal entities, especially social infrastructure development funds, and even from private and international institutions such as the World Bank. It is worth mentioning that within this financial structure there are non-recoverable resources and grants. Infrastructure barriers were resolved by carrying out additional studies and by increasing the project costs. A decisive factor was also the public dissemination of all benefits attributed to the project such as its contribution to: the solution of a health problem, for instance, an open dumpsite in the nearby of populated areas; a reduction in the electricity bills of municipalities and entities such as the Public Transport System “Metrorrey”; the environmental measures implemented for project development, the use of local renewable resources, the creation of regular jobs; and the economic benefits for local population. 158 Mexico- Products I and II 3.4. La Rumorosa I wind farm 3.4.1. General project description The La Rumorosa I is the first wind farm installed in the state of Baja California and it supplies electricity to the municipality of Mexicali for street lighting purposes, benefiting approximately 35 thousand families and selling excess power to the Federal Electricity Commission. This project achieves a social fund of approximately 4.9 million pesos resulting from savings on Mexicali’s electricity bill and 35 million pesos from the sale of excess power to the CFE. The latter is used within the so called program “Tu Energía” which is intended to benefit 40,000 low income families of the municipalities of Mexicali and Tecate (Gobierno del Estado de Baja California 2010a y b) by supporting the payment of their electricity bills. Figure 23. La Rumorosa project location. Source: UNFCCC (2010a). 159 Mexico- Products I and II 3.4.2. Objectives Power generated is used not only to supply 80% of Mexicali’s needs for street lighting, but also to sale excess power to the CFE, leading to a dual benefit that is the result of saving 4.9 million pesos on Mexicali’s electricity bill and annual incomes of 35 million pesos for the sale of excess power. A state fund is financed with both, savings and annual incomes, and is intended to benefit the poorest families of Mexicali and Tecate through economic support for electricity bills within the program “Tu Energía” (Gobierno de Baja California, 2010 a y b). 3.4.3. Stakeholder analysis This project was possible thanks to the participation of several stakeholders, including those at a federal level, the state of Baja California, the municipalities of Mexicali and Tecate, local academic institutions, and the Federal Electricity Commission. However, the key player was the Baja California State Energy Commission by designing, promoting, managing and participating during the construction and susequently the operation of the project. Likewise, it elaborated and operates the program “Tu Energía” in collaboration with the Federal Electricity Commission. Figure 24 shows all stakeholders involved during project’s development, while their participation is explained in the following sections. Sources of financing This project was financed by the state with 50% of the funds and the other 50% by federal sources. Furthermore, its registration as a Clean Development Mechanism project was supported by the Mexican Carbon Fund (FOMECAR). No additional funds were obtained from other sources, although several talks with the SENER, the CRE, the SEMARNAT, the customs and the Ministry of Finance were held in order to obtain the requiered resources and support. For example, Mexico customs services provided support for imports arrangements at the border line” (Muñoz, 2010). 160 Mexico- Products I and II Figure 24. Stakeholders involved in La Rumorosa project. Source: Own elaboration. Local authorities “La Rumorosa” wind farm project was supported by the following local authorities of the state of Baja California and the municipality of Mexicali: • The State Energy Commission, as part of its state energy policy (Periódico Oficial del Estado de Baja California, 2009), led the promotion and construction of the project, including the necessary arrangements for obtaining federal funds; it also designed the program “Tu Energía” and coordinated involved authorities. It can be said that thanks to the efforts of this state government agency the project was completed. 161 Mexico- Products I and II • • The municipality of Mexicali supported with the implementation of the program “Tu Energía” through the savings on electricity bill and the lease payments for project’s site (Global Energy, 2010). Similarly, the Mayor is committed to “make all necessary arrangements for the transference of not only environmental authorizations…but also land use permits... to the municipality of Mexicali, Baja California” (CRE, 2009b). The municipality of Tecate authorized a change in land use at the project site (CRE, 2009a y b). 3.4.4. Legal aspects This project faced a lack of legal mechanisms suited for this kind of implementation, especially within institutions at federal level such as the CRE, since mechanisms for selfsupply were not designed for state government participation. Initially, the project was expected to supply electricity to 5 state municipalities; however, it was only possible to incorporate Mexicali under a mixed self-supply scheme, where land and facilities are owned by the state. A lease contract for wind resource use, which is paid for in the form of electricity, was also celebrated with the municipality (Muñoz, 2010). Thus, and in accordance with Article 36 of the LSPEE (DOF, 1992), the best suited modality for the development of this project is a Self-supply scheme. For this reason, on August 20th, 2009, the municipality of Mexicali, Baja California (project promoter) requested the Energy Regulatory Commission (CRE) a permit for self-supply (CRE 2009a and b). Since all requirements, as established by the LSPEE’s ordinance, were met (DOF, 1993b) as well as all information was submitted in accordance with the authorized standard form, the CRE granted to the municipality of Mexicali, Baja California, a permit to generate electricity under the self-supply modality, as stated in Permit Nr. E/832/AUT/2009 (CRE 2009a). 3.4.5. Technological aspects Technical data and grid interconnection The project is located in the so called area of La Rumorosa, municipality of Tecate, near Km 75 of the federal highway Mexicali-Tijuana. The 10 MW wind farm consists of 5 x 2 MW GAMESA G87wind generators and produces 27,165 MWh/year (CEE, 2010). Table 10 shows its main technical features. Availability/ resource potential 162 Mexico- Products I and II La Rumorosa area has drawn great interest due to its favorable conditions for wind power generation. • Its potential is estimated in 1,400 MW (USAID, 2009) • It is close to transmission lines and consumption centers • It shows favorable topographic conditions Table 10. Main technical features of La Rumorosa wind farm project. Description Wind generator Gamesa – Spain Model G-87 Individual rated capacity 2 MW Nr. Of turbines 5 Tower height 78 meters Rotor diameter 87 meters Start up wind speed 3 m/s Cut off wind speed 21 m/s Source: Machado, et al. (2010). 3.4.6. Economical aspects Financing Total investment was 26,191,519.51 dollars plus VAT by means of public funds (100%) coming from the state of Baja California and the Federation; the project developer was selected through a bid process awarding it to the least cost proposal; the state owns 100% of the project and there are neither investors nor project partners. Likewise, there are neither state nor municipal debts, since funds were granted as non-recoverable investment, and therefore, resources are available for the program “Tu Energía” (Muñoz, 2010). It is worth mentioning that all economic benefits generated by the project, including those which may be generated via the Clean Development Mechanism, will be devoted to support the payment of electricity bills of low incoming families (CEE, 2009). Economic sustainability The municipality purchases electricity at the price applicable to tariff 5A minus a 5% discount. Additionally, and due to the fact that the municipality takes part in the Self 163 Mexico- Products I and II supply society, this electricity is exempted from the payment of VAT —since this is not regarded as a sale of electricity—, which results in an additional saving. These savings amounted to 4 million pesos in six months. The project’s payback period is 8 years and its useful life 25 years (Muñoz, 2010). Tariffs Transmission costs amounted to around 0.05 pesos per kilowatt-hour during the first months, but under the newly issued CRE’s resolution, they were reduced to 0.012 pesos per Kilowatt-hour (Muñoz, 2010). In accordance with the Ordinance of the LSPEE (DOF, 1993b), excess power can be delivered into the grid subject to prior authorization of the Standard Interconnection Agreement for Renewable Energy Power Plants and Efficient Cogeneration (DOF, 2010c) by the CRE. Likewise, CFE’s transmission network can be used to exchange power from one point to another by means of the authorization of the corresponding transmission service agreement. Excess power can be sold at a tariff that is calculated on the basis of the Short-term Total Cost, reflecting the variable cost of fuels and operation and maintenance in $/kWh. This cost is calculated as the least- cost or price required to supply an additional kWh within a certain region, and taking into account the offers of permit holders, transmission constraints and the transmission network losses. Prior coordination with the National Energy Control Center (CENACE) is required for interconnection or disconnection of the power plant, upward or downward regulation, active and reactive power control, primary and voltage regulation. This should be done in accordance with the possibilities of the energy source, the prevailing system conditions and the dispatch rules. The permit holder should deliver power to the CENACE in due time as agreed with the corresponding coordinators and in accordance with the possibilities of the energy source. Excess power available in any given month and time interval can be either sold to the CFE within the same month or accumulated for its later sale in accordance with: Where: • PESm = is the payment for the excess power during the billing month, “m” • EStmge= is the excess power available in the time interval “t” during the month “mgen”. 164 Mexico- Products I and II • CTCP= is the average Short-term Total Cost applicable to the corresponding region in the time interval “t” and during the month “mgen” • mgen = is the month when the excess power was available. • np = is the number of time intervals applicable to the corresponding tariff region. Excess power available in any given month and time interval can be used to either compensate the non-delivered energy in other time intervals or be accumulated for its later compensation in other billing periods. All compensations shall be understood at the interconnection point. Non-delivered energy during the billing month shall be compensated first with excess power available within the same month and subject to the following procedure: i. Non-delivered energy at all different consumption centers, ii. Equivalent compensation will be made between equal time intervals 3.4.7. Social aspects Stakeholders involvement As already mentioned, the Baja California State Energy Commission has been mostly involved in the project over all different phases (design, operation, management and promotion). This is also true for the program “Tu Energía”. The second important stakeholder has been the Federal Electricity Commission, which participated from early project stages by providing technical advice from the elaboration of technical specifications to the supervision of the project. Thus, all aspects were reviewed by the CFE before obtaining the necessary permits (Muñoz D., 2010). Similarly, there is a Committee of the CFE to operate the wind farm, including a voltage data analysis that is directly sent via CFE’s optical fiber to the CENACE. Furthermore, the CFE is in charge of implementing the program “Tu Energía” in coordination with participant authorities (Gobierno del Estado de Baja California, 2010b). Finally, the municipality of Mexicali is a the third relevant stakeholder, which, under the advice of the State Energy Commission, is legally the project promoter. On the one hand, it accepted that savings on electricity bill be allocated to the program “Tu Energía”, and on the other, it pays for the land use at the project’s site. Other involved stakeholders are: the municipality of Tecate by authorizing a change in land use at project site; the local university by carrying out the wind resource assessment of the site as well as the civil and electric engineering associated to the project, and the land’s owner, where the project was built, who reached an agreement with the state government. 165 Mexico- Products I and II Beneficiaries of the program “Tu Energía” Extreme climate conditions as well as an electric system, that is isolated from the national interconnected system, has resulted in high electricity bills to the households in the state of Baja California. This is due to an intensive use of air conditioning systems, especially during the summer season, and to the tariff structure as established by the Ministry of Finance and Public Credit (SHCP). In this regard, for example, in the year 2002 the tariff, applicable to this region, was $1.652 pesos for the first 500 kilowatts-hour during the summer season, while the same tariff, but applicable to the Northwestern region, (with similar geographic and climate conditions and interconnected to the national system) was $1.373 pesos for the same consumption band (DOF, 2002). In particular, climate conditions at Mexicali are even more severe than in other state locations, since a desert climate with little annual rainfall is dominant, besides its altitude is just above sea level. The average temperature reaches up to 45°C during the summer season, which is above the national mean, causing a seasonal increase in household’s electricity consumption that even doubles that of the winter season. During the six-month summer period, monthly household electricity consumption totaled 231 GWh in Mexicali in 2008, representing an average monthly consumption of 738 kWh per user. On the contrary, during the six-month winter period, Mexicali’s household’s electricity consumption is practically reduced to one third, falling to an average monthly consumption of 254 kWh per user (Gobierno del Estado de Baja California, 2010a y d). Electricity consumption in Mexicali is equally uneven. Out of 313 thousand household users, 20% has a consumption above 1,200 kWh per month, accounting for 45% of household’s consumption; 40% of all users have a consumption below 500 kWh, representing nearly 16% of total energy consumed by the household sector; and 21% of all users (67 thousand families) consume less than 250 kWh per month, accounting for just 3% of total household’s consumption (Gobierno del Estado de Baja California, 2010a y d). Although social welfare in Mexicali is significantly high —in the year 2005, its Human Development Index was 0.8659, which was even above the national average of 0.8200 (PNUD, 2009)— , 14.2% of its population lived in some kind of alimentary, capacity or patrimonial poverty (CONEVAL, 2005). In this sense, and in spite of the direct relationship between electricity consumption and family income, some of them have a high electricity consumption profile during the summer season in relation to their incomes. With the aim of supporting the poorest people of Mexicali, the Federal Government, through the Federal Electricity Commission, grants an additional economic aid to the subsidy of the Tariff 1F (Comisión Estatal de Energía, 2009) intended to reduce their electricity bills expenses, which are increased due to the use of air conditioning systems during the 166 Mexico- Products I and II summer season. The innovative feature of this support scheme is the source of funding, which is partly obtained from the electricity bill savings for street lighting of the Municipality of Mexicali. This electricity was supplied by the wind farm “La Rumorosa” in the frame of the Energy Socialization Program “Tu Energía” (Gobierno del Estado de Baja California, 2010b). “We have the benefit of having a renewable energy source; the municipality has a reduced electricity tariff (by 5%) and supplies 80% of electricity needs for street lighting purposes. The excess power is another benefit since we get 35 million pesos resulting from its sale to the CFE. These resources are allocated to 35,000 families by means of the program “Tu energía”; SEDESOL and CONEVAL determined the percentage of population living in the so called patrimonial poverty. Socioeconomic studies were carried out and 35,000 families received a customized debt card; $1,000 pesos are transferred every month during the hot season in accordance with temperature and consumption curves and can be accumulated. It can only be used to pay for the electricity bill, in which more efficient appliances that were acquired within CFE’s program are also charged, and therefore this money can also be used to cover part of this debt”. State and federal subsidies are allocated to all consumers, but this card is only for those who need it the most. 20% of all beneficiaries are elders, while 80% are women,40% are single mothers and 60% are people from the Mexicali Valley.” (Muñoz, 2010). Government entities involved in the program “Tu Energía” (Gobierno del Estado de Baja California, 2010b) • The State executive branch - sets out program’s general policies. • The General Secretariat of the Government - provides advice on elaborating the program’s general policies to the state executive branch. • The State Secretariat of Planning and Finance (SPF) - establishes all necessary mechanisms for funding the program before the Federal Electricity Commission. • The State Secretariat of Social Development (SEDESOE) - elaborates and implements the guidelines for the realization of the program, besides the design of all mechanisms necessary to grant the program’s benefits. • The Directorate of public relations - provides information to the Directorate of Social Communication with the aim of being permanently in contact with the general population. • The Directorate of Social Communication. It is in charge of disseminating the public activities of the office holder in the executive branch and other entities; it provides any written, graphical or recorded information in mass media regarding governor’s and other state entities’ activities; to plan, design and implement publicity campaigns. 167 Mexico- Products I and II • The Baja California State Energy Commission (CEE). Executing agency for the program; it is responsible for coordinating several authorities involved in project implementation in the frame of general policies established by the State Government. • The Federal Electricity Commission (CFE). It is the implementing agency in coordination with the aforementioned authorities. (See figure 25) Figure 25. Stakeholders involved in the Program “Tu Energía”. Source: Own elaboration based on information provided by the Baja California State Energy Commission (Gobierno del Estado de Baja California, 2010b) . Landowner “The land was expropriated to the second owner, and it is now a state property. It was first a communal land and then was divided. Hence, its second owner had no reasons to object it; the land was not being used anyway. It was a negotiated deal at a fair price. The project 168 Mexico- Products I and II site was chosen due to its proximity to the closest town, to the federal highway and to the transmission line. It also imposes fewer impacts and has a best orography.” (Muñoz, 2010). Research centers, universities Technical studies for wind resource assessment were carried out by the Ensenada Center for Scientific Research and Higher Education (CICESE), which participated in the elaboration of the document “Zonas Potencialmente Productoras de Energía Eólica, en Baja California. Proyecto Piloto: Granja Eólica en La Rumorosa (Wind Power Potential in Baja California. Pilot project: La Rumorosa Wind Farm)”. The selection of project site was based on this study (CICESE, 2003). “All civil and electrical engineering was locally carried out by university professors who are very skilled people.” (Muñoz, 2010). Population’s participation in the development of the project The population is aware of the problems, especially those related to energy, since all fuels used within the state come from other locations, either by ship or by train and tanker trucks, and there are sometimes fuel shortages characterized by high prices. There were no protests against the project, and it had a wide social participation. Gamesa is in charge of maintenance, but everything else was carried out locally. Four construction companies were involved, crane companies, the customs service, electrical engineering companies and project coordinator (floor manager) (Muñoz, 2010). 3.4.8. Environmental aspects The state of Baja California has 6 Protected Natural Areas, which are considered as fragile ecosystems (SEMARNAT, 2010c), and 1,405.90 km of littoral —of which slightly above one-half corresponds to the Pacific Ocean coasts and the remaining share to the Sea of Cortez —, accounting for 12% of Mexico’s littoral zone. Likewise, it has 200 miles of patrimonial sea (Gobierno del Estado de Baja California, 2010c). The electric power system of Baja California supplies the needs of approximatelly 3 million inhabitants within the state (INEGI, 2010c) and is integrated by 5 fossil fuel-based thermal power plants and a geothermal power plant (INEGI, 2010c). They are isolated from the National Interconnected System (SIN) , but interconnected to the United State electric power system (CFE, 2009b), allowing for power exports with this neighbouring country. Even though such power exports may imply an economic benefit to the country, there is a perception that they locally impose more environmental impacts due to power plants’ emissions, especially those released by the Cerro Prieto geothermal field (Santos, 2009), including carbon dioxide, sulfidric acid, ammonia, methane, propane and sulfurous 169 Mexico- Products I and II anhydride. Out of these gases, sulfidric acid and sulfurous anhydride are those imposing the most detrimental impact on the local environment. In addition to pollution problems caused by power plants, their operation is conditionated to water availability, since the state of Baja California is located in arid and semi-arid regions, where pluvial precipitation ocurrence is low (Comisión Estatal del Agua de Baja California, 2008). Positive and negative environmental impacts The Environmental Impact Statement —elaborated by the Company Servicios Ambientales Sustentables— was conditionally approved by the SEMARNAT on March 10th, 2009, as stated in the Environmental License DFBC/SGPA/UGA/DIRA/934/09 (Gobierno del Estado de Baja California, 2010a y b). Main impacts of the power plant would occur during the construction stage. Table 11 shows these impacts as well as the measures implemented to mitígate them. Birds and bats have been monitored before, during and after project completion with the aim of fulfilling with all recommendations intended to reduce impacts. When wind towers were erected, 50,000 m3 of water were used to compact the soil, but it was reused water. (Muñoz, D., 2010). Table 11. Main environmental impacts of the power plant and mitigation measures. Impacts Impacts on biophysical aspects during the construction stage Impacts on environmental quality during the provision of machinery, loading and unloading, transport and storage services Dust generated during construction Mitigation measures Avoid vegetation removal and encourage reforestation Collect solid waste generated by the provision of services Noise during construction Collect and send waste to a confined area Collect and send waste to a confined area. Use portable toilets during construction Waste generated during construction Impacts on birds Control dust and suspended matter by moisturizing the construction area The control room will have septic tanks 170 Mexico- Products I and II during operation. Source: UNFCCC, 2010 Environmental impact studies The environmental authorization for the construction of la Rumorosa wind farm was conditionally granted on March 6th, 2009, as stated in the document Nr. DFBC/SGPA/UGA/DIRA/934/09; the Major of Mexicali, Baja California committed himself to undertake all formalites required for transferring the environmental authorization to the municipality of Mexicali (CRE, 2009e). With regard to land use, the municipality of Tecate, Baja California, authorized the installation and operation of a renewable energy power plant (CRE, 2009e). As for forest land use change, the SEMARNAT granted, as stated in the document Nr. 667 as of March 23th, 2009 (SEMARNAT, 2009) the corresponding authorization. 3.4.9. Replicability This and the next section were developed in accordance with information available at the Bank Information Center (BIC) (Islas, J. et al, 2010). 3.4.10. Barriers Legal Barriers As shown in the previous case study, this barrier arises from the fact that there are no legal mechanisms in current legislation that allow for state governments to act as legal promoters under the self- supply modality. Thus, transaction costs for state governments as well as the legal project complexity are substantially increased, specially when local wind resources are used. For this reason, and in spite of the fact that the government either owns the land and facilities or at least they are within its competence, the permit holder is a municipality (Mexicali), the wind resource is available in a different municipality (Tecate), while participants are multiple stakeholders under several legal acts such as municipalities and private companies. In addition to these legal barriers, others such as those related to the implementation of a social program (“Tu Energía”) by the State Government of Baja California, including several state agencies and the CFE, were also present in the program design. Institutional Barriers 171 Mexico- Products I and II This barrier is related to the learning-by-doing process, and the capacity of state governments to develop energy projects, as well as the lack of clarity in the participation of federal institutions such as CFE, CRE, SENER, SEMARNAT, SHCP, state agencies and municipalities. The lack of institutional coordination also increases transaction costs and project complexity during the development of renewable energy projects, which are intended to internalize direct social benefits derived from the implementation of the program “Tu Energia”. Technical Barriers This kind of barrier is due to some difficulties when trying to meet with voltaje and energy quality requirements of CFE; these problems are related to technology and project design, and are intensified when power is generated by an intermittent renewable energy source such as wind energy, which results in some opposition by CFE to the interconnection and transmission of these facilities. Financial Barrier The lack of financing for renewable energy projects poses a significant barrier in both analyzed projects. High up-front costs associated with wind technology, along with the tight state budgets, the lack of specific funds to support energy projects at federal level and adverse conditions for state governments to access loans and grants from international institutions, makes non-reimburesable funds from national development banks, practically the only available source to develop this kind of projects. This results in increased transaction costs, which are additional to those previously described. Infrastructure Barrier This barrier is related to the problems that may arise from the handling of new technologies such as wind power when taking into account, on the one hand, current infrastructure such as bridges and highways, and on the other, the lack of infrastructure required to reach the site where the wind resource is available. Additionally, the lack of adequate handling systems for wind turbines within the region is another factor affecting project development. All in all logistics are more complex, including the project’s duration, which generally results in additional costs. A second, but no less important barrier, is associated with the distance between the project site and the nearest transmission line and to its transmission capacity. This often limits project capacity, by either hindering, from an economical point of view, the optimal plant size or by increasing the cost due to transmission lines reinforcement. The latter is rooted in current legislation, which requires permit holders to pay for the costs of reinforcement and other upgrades. These costs are allocated to the permit holders through the interconnection and transmission service agreements concluded with CFE. 172 Mexico- Products I and II 3.4.11. Success factors for project replicability Solutions for resolving the aforementioned barriers, (as in the previous case study of the SIMEPRODE) are the key success factors for this wind energy project, described next. The support provided by the Baja California State Energy Commission was an important factor for the development of the project since it was included as part of the State Energy Policy. It leaded the promotion and construction of the project and managed the federal funds, designed the Program “Tu Energía” and coordinated all authorities who participated in the program implementation. Finally, it also provided the solution for several barriers including: Legal barriers were solved by having as permit holder to a municipality (Mexicali). Institutional barriers overcomed step-by-step, meeting with all requirements and administrative procedures as requested by state and federal authorities. Similarly, some legal voids were filled through the signature of contracts among all entities involved, and where applicable, through resolutions issued by either the local congress or the town council. Technical barriers were overcomed by getting involved and encouraging CFE’s participation. Financial barriers were basically resolved thanks to the public funds obtained from state and federal entities. It is worth mentioning that within this financial structure there were non-recovarable resources which were justified due to the fact that the project contributed to the development of infrastructure for lighting and public services, besides its direct social benefits. Civil infrastructure barriers were resolved by carrying out additional studies and by increasing the wind project costs, while those related to electric system infrastructure were overcomed by adjusting the project capacity to that of CFE’s transmission lines. Finally, a remarkable success factor —which contributed to social acceptance— was achived by revealing additional project costs and by providing public information on the direct and indirect benefits of the project such as those that local population will benefit from —savings in the electricity bills of municipalities and/ or state entities, the utilization of local renewable resources and economic benefits to generate social welfare among local population, especially in a poor sector of the municipalities of Mexicali and Tecate—. 173 Mexico- Products I and II 3.4.12. Photos of La Rumorosa wind farm project Image 34. Wind generators at La Rumorosa wind farm project. Source: Own elaboration, project site visit, Sepember 14th, 2010. 174 Mexico- Products I and II Image 35. Complementary facilities at La Rumorosa wind farm project Source: Own elaboration, project site visit, Sepember 14th, 2010. 175 Mexico- Products I and II Image 36. La Rumorosa wind farm project. Source: Own elaboration, project site visit, Sepember 14th, 2010. 176 Mexico- Products I and II 3.5. Interviews with managers of Bioenergía de Nuevo León and La Rumorosa projects 3.5.1. Interview with the Technology and Development Director of SIMEPRODE (Ing. Armando Cabazos) 1. How did the idea for this project originate? Is it part of a national or international initiative? Did any university or non-governmental organization take a part in it? Is it a demand of the local society? Is it a promise made in an election campaign? The idea of taking advantage of the biogas produced at Salinas Victoria’s landfill is part of an initiative of the technical department of SIMEPRODE. 2. Which legal, financial, technological, social or other kind of barriers did the project implementation face? The main barrier we faced was of legal nature, since current environmental laws only allow power generation for self-consumption purposes, its sale to the CFE and for exporting purposes. 3. Did the project get financing from public funds (federal, state or municipal), private investors (either national or international) or from international aid? The project was supported by the World Bank as well as by national and international private investors. 4. How did the local population participate in the project? Did the population participate in a consultation process for the project implementation? Did the project enjoy public acceptance? Was there some sort of social protest? There was no direct participation of the population, but the project has enjoyed acceptance in several forums. 5. How did the project secure access to land? Is it a property of the municipality? Was it expropriated? Was it donated by the owners of communal land? SIMEPRODE owns the landfill where the biogas comes from, and it was acquired in the year 1988. 6. Who were the key players and what role did they have in the project development (Project developer, the mayor, NGOs or civil society)? The state government, SIMEPRODE, the municipalities within the metropolitan area of Monterrey, the World Bank, SEISA Company and international partners. 177 Mexico- Products I and II 7. What are the main features of the project: types of financing and investors, financial or other kind of commitments to the municipality, project partners, share of the electricity purchased by the municipality and the economic savings that it represents? Project financing by the World Bank and private investors (project partners); project partners (municipalities within the metropolitan area of Monterrey and state government agencies) benefit from lower electricity tariffs (10% than those of the utility). 8. Besides power generation, what other benefits does the project bring to society? Will the project create local jobs? Where did the equipment and materials for project development come from? Is there any training or workshop foreseen for the population? The main project benefit is greenhouse gas reductions. 9. What is the reliability of the power generated by the project? Are there frequent power interruptions? The project has a reliability of 100%; power interruptions are caused by contingencies in CFE’s grid. 3.5.2. Interview with the General Director of the State Energy Commission (Lic. David Muñoz Andrade), held on September 14th, 2010. 1. How did the idea for this project originate? Is it part of a national or international initiative? Did any university or non-governmental organization take a part in it? Is it a demand of the local society? Is it a promise made in an election campaign? Several actors participated in the project; anemometric data as available from private sources; there were meteorological measurements carried out by the Germans, the Ensenada Center for Scientific Research and Higher Education (CICESE) estimated the renewable energy potential. As for society, current practices are far from being considered as energy efficient, people consume too much electricity, and therefore, they have to spend a lot of money for this concept. The electricity bill in Mexicali does not include any fee for street lighting; however, the tariff paid corresponds to the 1F and the state government spends 300 million pesos per year in subsidies. There are also errors in readings of electric meters and sometimes they cause users to fall into a higher tariff. Furthermore, it was not 178 Mexico- Products I and II always possible getting the federal subsidy for the population, besides it comes from Mexican oil revenues, and oil is a finite resource. Previous experiences were available, since agreements with the FIDE have been concluded, besides it was a promise, made by the current state governor during his election campaign, that the state will generate its own electricity. The governor is a visionary person who knows water and energy problems due to his former duties. Furthermore, we have strategic alliances on bioenergy (Jathropa) with universities and private investors with the aim of analyzing the potential of biofuels and options for natural gas powered transport. The State Energy Commission did not exist when the project planning started. It was up to the current government administration when it was established. The commission focuses on 4 axes: energy security, competitiveness, local resource use and social responsibility. There are not many NGOs and they work by issues: climate change, subsidies, vulnerable groups, but there is a lack of information on energy-related issues. Business organizations are those which are more actively involved in energy issues. 2. Which legal, financial, technological, social or other kind of barriers did the project implementation face? We faced all kinds of barriers, since state governments are not used to promote energy projects and it is not clear the role that federal institutions such as the CRE, SENER, SEMARNAT and SHCP play. However, a team with the CFE was formed during the early stages of the project, from the elaboration of technical specifications to the supervision and interconnection to CFE’s system; they wanted everything to be done in accordance with CFE’s requirements so as not to have problems resulting in a project rejection. For this reason, everything was reviewed by the CFE before permits were obtained. There is a Committee of the CFE that operates the wind farm, including voltage data analysis that is directly sent via CFE’s optical fiber to the CENACE. Some technical difficulties were found when trying to reach the voltage level required by the CFE, but they were resolved. Financial barriers were found because project development took place during the year of the economic crisis, and resources were not secured, besides exchange rate 179 Mexico- Products I and II fluctuations resulted in a need for additional resources. They also sought fundings with other institutions, but without success. With regards to legal barriers, there were no mechanisms available within federal institutions, especially the CRE, that consider the participation of the states in a self-supply scheme. Initially, the project was expected to supply electricity to 5 state municipalities; however, it was only possible to incorporate Mexicali under a mixed self-supply scheme, where land and facilities are owned by the state and a lease contract for wind resource use, which is paid for in the form of electricity, is celebrated with the municipality. The other municipalities could not enter because they do incorporate a fee for street lighting in their electricity bills, and there was uncertainty on how these resources should be transferred to the municipality, besides they were reluctant to establish either a self-supply society or a coownership. On the other hand, the capacity of the transmission line is limited to 10 Megawatts and could not be exceeded. Other barriers were related to the logistics of the equipments; they faced difficulties when crossing customs’ bridges and even traffic lights should be uninstalled so that the equipment could be transported. Additionally there was uncertainty on the weight-bearing capacity of each customs’ bridge. During the erection process, it was necessary to open roads, compact the soil and blow up some rocks; even for tower foundations the limit capacity of CEMEX for supplying concrete was reached. Social barriers were related to the cost of the project, since this investment could be allocated to other needs; there was an important expense in transporting the crane from Guadalajara, while other expenses were made to carry out some studies. The lack of information regarding project complexity resulted in some criticism, but generally speaking the project was well received by the people. 3. Did the project get financing from public funds (federal, state or municipal), private investors (either national or international) or from international aid? This project was 50% financed by the state and 50% by federal sources. No additional funds were obtained from other sources, although several talks with the SENER, the CRE, the SEMARNAT, the customs and the Ministry of Finance were held in order to obtain the required resources and support. For example, customs services helped with importing equipments. It was also of great help that they 180 Mexico- Products I and II contacted all institutions necessary for project development, while the governor’s support also facilitated it by contacting high level federal authorities. 4. What are the main economic features of the project: investment amount, operating and maintenance costs, type of investors, financial or other kind of commitments to the state or municipality, project partners, share and price of the electricity purchased by the municipality and the economic savings that it represents, share and price of the electricity used for public service, interconnection and transmission service costs? The total investment was of 26,191,519.51 dollars plus VAT, with 100% public funds, and the project was awarded to the least cost proposal through a biding process. Operating and maintenance costs are 30 cents per Kilowatt-hour. There are neither investors nor project partners; it is a 100% state-owned project. There are neither state nor municipal debts, since funds were granted as a nonrecoverable investment. Therefore, there are resources for the program “Tu Energía”. The municipality purchases electricity at the price applicable to tariff 5A minus a 5% discount. Furthermore, electricity is exempted from VAT, since there is an agreement with the municipality, otherwise the payment of VAT to the CFE, would be required, resulting in another saving to the municipality. This saving amounted to 4 million pesos in a 6 month period. The payback period is 8 years and 25 years useful life. Transmission costs are expensive, around 5.0 cents per kilowatt-hour during the first months, but under the new initiative of the President, they were reduced to 1.2 cents per Kilowatt-hour. 5. How did population participate in the project? Did population participate in a consultation process for the project implementation? Did the project enjoy public acceptance? Was there some sort of social protest? The population is aware of the problems, especially those related to energy, since all fuels used within the state come from other locations, either by ship or by train and tanker trucks, and there are some times fuel shortages characterized by high prices. However, they are not concerned about energy security and several 181 Mexico- Products I and II conversations were held with the society and business organizations, since they are of the opinion that energy-related problems must be resolved at a federal level. In spite of this situation, they understand the importance of implementing energy efficiency and energy diversification measures. There were no protests against the project. A consultation process was necessary as part of the MDL project requirements. Additionally, the population was informed about every project aspect as well as the progress made and next steps. Nevertheless, there is still a lack of information among the population, since they know neither the operation nor the features of this kind of projects; mass media has helped, but they do not have the technical background. As for other impacts, birds and bats have been monitored before, during and after project completion with the aim of fulfilling with all recommendations intended to reduce them. When wind towers were erected, 50,000 m3 of water were used to compact the soil, but it was reused water. 6. Did project developers/ promoters inform the population about the features and benefits: for example, renewable energy utilization and reduced pollution? Yes, every single aspect and benefit of the project was communicated. 7. How did the project secure access to land? Is it a property of the municipality? Was it expropriated? Was it donated by the owners of communal land? The land was expropriated to the second owner, and it is now state property. It was first a communal land and then it was divided. Hence, its second owner had no reasons to object it; the land was not being used anyway. It was a negotiated deal at a fair price. The project site was chosen due to its proximity to the closest town, to the federal highway and to the transmission line. It also imposes fewer impacts and has a best orography. There was only one site with better conditions, but the owner wanted too much money for it. 8. Who were the key players and what role did they have in project development (Project developer, the state government, the mayor, the town council, NGOs or civil society)? The main stakeholder was the state government. The municipality did not participate, howeve did not reject the project either. The mayor and the town council supported the project by granting permits and signing documents. 182 Mexico- Products I and II The project began during governor’s election campaign; it was indeed a promise made during that period, but it was under analysis since that moment and the planning stage started with the beginning of the new administration in August 2007. In 2008, the project site was identified and bids were monitored; as of October 2008 bids documents were published, the first call for tenders was declared unfruitful, but the second one awarded the project to the least-cost proposal. All administrative procedures were completed and permits were obtained, but some risks were taken and some investments were made in advance, although they did not know whether or not they were going to make it. 9. What are the main technical features of the project: capacity factor, technology type, efficiency, rated and net power, net energy, relevant impacts and avoided GEI emissions? What are the economic benefits? Capacity factor: 32%, but it varies from month to month. Current value 28.75% Technology: Gamesa G87, 78-meters tower, 2000 Kilowatts wind generator Annual net generation: 27 million Kilowatts-hour We have had idle time due to technical constraints and to other factors, the oil was heated up, a truck crashed into a power substation, the wind has reached the cutoff speed and curtailment was necessary, the equipments switch off during electric storms. The permit had not been granted when the project started; it happened almost up to project’s completion. CFE allowed for a higher voltage variation. The emission of 15,000 tonnes of CO2 has been avoided, but the project has not been accepted as a Clean Development Mechanism yet. Resources were not available for elaborating both the PIN and the PDD and they could not get financing. They held a talk with FOMECAR, but it took much time for a reply and therefore the quotation validity expired, and when they got a new one it was twice as much higher than the first one. Half a year was wasted. The PIN and PDD were elaborated using resources of the State Energy Commission, while the validation process will be covered by the FOMECAR. The validating entity DNV just visited the project for validation. The project promoter is Ecosecurities (Gabriel Quadri). 10. Besides power generation, what other benefits does the project bring to society? Will the project create local jobs? Where did the equipment and materials for the 183 Mexico- Products I and II project development come from? Is there any training or workshop foreseen for the population? Within the program “Tu Energía” jobs have been created. We have the benefit of having a renewable energy source; the municipality has a reduced electricity tariff (by 5%) and supplies 80% of electricity needs for street lighting purposes. The excess power is another benefit since we get 35 million pesos resulting from its sale to the CFE. These resources are allocated to 35,000 families by means of the program “Tu energía”; SEDESOL and CONEVAL determined the percentage of population living in the so called patrimonial poverty. Socioeconomic studies were carried out and 35,000 families received a customized debt card; $1,000 pesos are transferred every month during the hot season in accordance with temperature and consumption curves and can be accumulated. It can only be used to pay for the electricity bill, in which more efficient appliances that were acquired within CFE’s program are also charged, and therefore this money can also be used to cover part of this debt. State and federal subsidies are allocated to all consumers, but this card is only for those who need it the most. 20% of all beneficiaries are elders, while 80% are women, 40% are single mothers and 60% are people from the Mexicali Valley. It required too much effort to make some changes in CFE’s invoicing system; payments for the excess power go directly to the State Ministry of Finance, CFE closes its monthly accounting procedure and calculates the bill of the program “Tu Energía” and sends the invoice to the state, which in turn pays for with the incoming resources. All civil and electrical engineering was locally carried out by university professors who are very skilled people. There was wide social participation; equipment and materials were brought into the site from out-of-state as well as the crane which was brought from Guadalajara. Gamesa is in charge of maintenance, but everything else was carried out locally. Four construction companies were involved, crane companies, the customs service, electrical engineering companies and project coordinator (floor manager). At the town of la Rumorosa one can notice an improved quality of life, stores have been opened, infrastructure works have been carried out and the local Red Cross has been re-opened. It is expected that operators may be local residents, but so far it has not been possible due to a lack of available positions. We have qualified people, (some with Master’s Degree), and are learning how to run the wind farm, 184 Mexico- Products I and II besides they have elaborated all the manuals, procedures and reports required by Gamesa and CFE since they did not exist. 11. Is there a future expansion plan for this project? Are there more renewable energy projects? There is a plan for building a 20 Megawatts hydropower plant. Water services for Rosarito, Tecate and Tijuana are expensive (400 million pesos per year) since water comes from the Colorado river and pumping is expensive due to the fact that it must run across la Rumorosa. Water flows into a local dam, where a diversion dam, directing the water into a power house and then producing electricity for water pumping, is expected to be built. A private company will finance, build and operate the project for a 20-year period and then will transfer it to the State. Power generated will be sold at a price that is 20% lower than that of the electricity tariff. The construction of other wind farms is foreseen, but under a privately owned scheme, since the CRE requires the establishment of a self-supply society and a single interconnection point for each project, which in turn makes project development more complex. It is foreseen that all state government entities may be constituted as a single society and then bid a supply contract among local developers. It has been estimated that a capacity from 50 (considering current infrastructure) to 100 Megas (consumption that can be self-supplied at a competitive tariff) may be feasible. Soft loans have been sought with the aim of installing solar systems in 100 houses and also in small companies. Cogeneration has also been promoted as well as the utilization of solar water heaters. There is also a program on industrial and commercial energy efficiency with the FIDE. Energy crops for biofuel production are being tested with the support of local companies. There is a project in collaboration with the UNAM using low enthalpy geothermal energy. A solar thermal project has been promoted with Siemens; the problem is that such kinds of projects have been previously promoted with them, but not well supported. There is a program for competitiveness, and an agreement with SEDESOL is being sought for developing indicators. It is expected to run a program for local 185 Mexico- Products I and II renewable energy project developers aiming at taking advantage of local processes in the manufacture of components for renewable energies. The State will pay for the companies’ certification in order to create a local and export market. It is expected to export power and technology components. In order to guarantee the continuity of these programs beyond government transition, some amendments to the Competition Law are being made; it is expected the enactment of a local Renewable Energy Law in 2011. Additionally, this law sets out governor’s duties, including that of promoting renewable energies. Universities and Institutes of Technology are establishing graduate programs in renewable energy. 3.6. Speeches made by the Mexican President and by the United States State Secretary 3.6.1. Speech of President Felipe Calderón during his visit to the Bioenergía de Nuevo León facilities The following speech was given by the President of the Mexican Republic, Felipe Calderón Hinojosa, during his attendance at the ceremony of Bioenergía de Nuevo León extension project on September 17, 2008 (Presidencia de la República, 2008): “…I am truly glad to be here at this start-up ceremony of Monterrey II extension project... …there is a climate alteration, it is a fact, there is a climate change, country and global average temperatures have increased, causing a climate alteration too. The most valuable hypothesis is that such a warming is a result of the so called greenhouse gas emissions, among others, the natural gas released into the atmosphere. It could come from earth’s interior such as that plentiful found in Burgos basin or mixed with oil; and it, the methane, could be even produced by the decomposition of organic matter... 186 Mexico- Products I and II …I am very fortunate to have worked very closely with this pioneer project in Nuevo León and in Mexico, Bionergía de Nuevo León… …when I was the Director of BANOBRAS, the project was financially structured, and even resources from World Bank’s infrastructure fund were taken by means of several agreements intended to start up an important part of phase I, the first 7 Megawatts. Later, as Minister of Energy, I also worked very closely with this project for finally starting it up. Now here I want to acknowledge the Federal Electricity Commission…because thanks to its support was possible to reach a reasonable agreement so that waste generated in the metropolitan area could be used for power generation by taking advantage of the methane produced at the landfill. This gas is enough for supplying electricity to the street lighting of the metropolitan area and that of other 9 municipalities, besides other offices, including the Government Palace, the DIF, among others, and of course, the Water and Drainage Services of the metropolitan area. A clean energy project indeed, a sustainable project, what is more, a financially feasible project, among others, because just natural gas prices, as a result of recently increased oil prices, have generated savings that during project operation will become a profit for the project itself. So, I am very pleased to be here at Salinas Victoria , surrounded by several good news related to a sustainable project which I have believed in from beginning to end, and today I am very glad to be here at this 12.5 Megawatts extension ceremony. This is great news for Mexico and Nuevo León that this is the first project in Latin America generating electricity from landfill gas… During the first project phase, Monterrey I, the emission of 45 thousand tonnes of methane were not released into the atmosphere, which is equivalent to 800 thousand tonnes of carbon dioxide… I am very pleased to see that this project extension, the phase II, Monterrey II, is making possible to light up and power public services of this great city and its metropolitan area by taking advantage of something, which so far, was considered as a hindrance and a pure waste. I also celebrate the fact that this project is a pioneer in taking part of a collaboration initiative, which is expected to be replicated worldwide, as the agreements concluded between the World Bank and Bioenergía de Nuevo León for a total reduction of 1 million tonnes of carbon dioxide over this second project stage. 187 Mexico- Products I and II Without adding emissions avoided in phase I, this is the equivalent of retiring 90 thousand automobiles or planting nearly a thousand hectares of forest, and of course, if we add those of the first stage, we will reach a total of 150 thousand retired automobiles… Of course we hold this project in great esteem, the first biogas project in the country and in Latin America…Projects such as Monterrey II should be examples to be followed by other cities of the country. I hope that we could start a project of this kind soon in world’s largest city, or probably one of the largest one, the metropolitan area of Mexico City. The Federal Government will always support this kind of initiatives that promote clean power generation, and generally speaking, any project that contributes to the preservation of the environment. So, congratulations to Nuevo León, to its people, to its government, because this is a successful project in all ways; the city wins, and even spends less Money for the provision of electricity; the environment wins and therefore we all Mexicans win” (Presidencia de la República, 2008). 3.6.2. Speech by the Secretary of State Hillary Clinton on the Bioenergía de Nuevo León plant The following speech was delivered by the US Secretary of State Hillary Clinton on the Bioenergía de Nuevo León project during a visit made at these facilities on March 26th, 2009 (Santacruz, 2009): “I am here to witness and celebrate what has been done in this state and the results will be visible far away from here; this is an advanced plant, we have nothing alike in the United States. I know this is not the kind of news that we can read in newspapers, but it should be there, not only in United States, but also in Mexico. The Mexican people and the municipality should see this and ask themselves how can we replicate what Monterrey did; and the United States should see this and ask itself what can we do in order to produce the same electricity level from solid waste”. 3.6.3. Speech by President Calderón during the inauguration of “La Rumorosa” wind farm project “I just want to congratulate the people from Mexicali, to greet the authorities, Rodolfo Valdez, the major; Eduardo Peñalosa, Major of Tecate, the Governor José Guadalupe Osuna. I particularly 188 Mexico- Products I and II congratulate him for these kinds of projects that place Baja California as an innovator in the renewable energy field. I am plenty aware, my friends, of the electricity problem you have, because in spite of current temperatures, Mexicali reaches up to 50 Celsius degrees during the summer season. This makes Mexicali the city with the most extreme weather conditions in the country. Even when you pay a reduced tariff, in comparison with other regions, you end up paying more than any other state, since you have to keep the air conditioning on all day long. For this reason we have supported Mexicali and we will keep on doing it through the tariffs and by always seeking innovative schemes intended to solve this problem. Nowadays, the annual subsidy granted to Mexicali is around 2,400 million via the tariffs. Now, we are going to explore other alternatives to help you. The cost of this wind farm, which was developed by both State and Federal Governments, totaled 350 million pesos and will allow us to pay for the street lighting of Mexicali, i.e. generate electricity for street lighting purposes. These savings will be distributed by the Governor among the poorest people of Mexicali so that they can pay for their electricity bills. As such, we are at the forefront and will be seeking clean energy schemes. Let me tell you that when I started this administration, wind energy practically did not exist in the country. Here we have 10 Megawatts, but we have been building 2,500 Megawatts in Oaxaca and Mexico will become into a country with the greatest advances in renewable energy, especially wind energy, in Latin America and one among the top 15 in the world. So, congratulations to all of you, Mexicali. Congratulations Baja California for this technology, and for helping people who need it the most via the tariffs. We will keep on supporting Mexicali and Baja California”. (Presidencia de la República, 2010) 189 Mexico- Products I and II 3.7. Lessons learned Taking into account the current legal framework of Mexico, the lessons learned from both analyzed experiences are described next. -Renewable energy projects must be included as part of either programs or public policies at state level. - An energy policy that favors the development of renewable energy facilitates the participation of the federal corresponding entities. -The presence of legally constituted state bodies with capacities for the development of the legal scheme, design, promotion, management, and financing of renewable energy projects, as the Baja California State Energy Commission and the SIMEPRODE in Nuevo Leon, guarantees project success. - A project becomes feasible when showing features that contribute to local sustainable development (fight poverty, solutions for local health and environmental problems, job creation, greenhouse gas reductions, encouragement of local business participation, capacity building in higher education institutions through their participation in project development and increased electricity coverage). These project features facilitate public funds, at both federal and state levels, be allocated to the development of the project. Similarly, they ease the process for obtaining financing from international funds, since aside from project profitability, it contributes to sustainable development and greenhouse gas reductions which are other eligibility criteria. Similarly, this also facilitates project eligibility for either the Clean Development Mechanism or the sale of greenhouse gas emission reductions in the international carbon markets —thus allowing for additional incomes for the project —. Finally, these features enable the social acceptance of the project, which may become the main obstacle for the development of renewable energy projects. In this context, information on renewable energy projects must be made widely and clearly available from early stages in terms of the goals, costs, drawbacks and benefits that the project pursues. This is intended for the active participation of the local population and their representatives (town council, local congress, NGO’s, communal land owners, etc.), including the participation of higher education institutions in the negotiation and consensus processes. It is also important that the CFE participates from early project stages by elaborating the technical documents and by supervising works and grid interconnection with the aim of achieving full compatibility between the renewable energy project —especially 190 Mexico- Products I and II intermittent sources— and CFE’s technical requirements. This not only avoids reluctance to project development, but also incorporates useful CFE’s technical information that can facilitate interconnection and transmission permits as well as its participation in wind farm operation and voltage control. Another important lesson learned is the fact that before developing a renewable energy project, developers must carry out detailed studies along all project stages. This is especially advisable not only to avoid additional costs derived from learning costs associated with the utilization of new technologies, but also to better face criticisms over project development. Finally, it is worth mentioning that the economic feasibility of the project and its operation —when promoted by any State Government— must be supported by savings in electricity bills for municipalities, state governments or associated mixed private companies with the aim of avoiding public or private debts —which may influence the perception of investors, State Governments, Municipalities, the Federal Government and the general population regarding project benefits—. 4. Conclusions Common success factors, such as those identified in both analyzed case studies, suggest that renewable energy projects replicability is guaranteed when: The state government strongly supports the development of renewable energy projects (especially if they are part of their institutional programs or public policies). There is an institutional capacity for leading and solving problems at all stages of the renewable energy project in Mexico. It is possible to work in close collaboration with the CFE from early project stages. There is a local technical capacity that can contribute to generate information on project feasibility, while supporting its development and operation. Renewable energy projects have as their central axis local sustainable development, especially in the context of environmental, health, social and productive issues. The project enjoys public acceptance due to clear and transparent dissemination of information from early project stages, aiming to negotiate and to reach a consensus on project development. 191 Mexico- Products I and II The renewable energy project delivers direct benefits to local governments such as savings in energy expenses and increased public image, while avoiding public debt burdens that cannot be covered by their budgets for electricity. National and international soft and long term funds, which place especial emphasis on local sustainable development, are created. Social acceptance is due to project contribution to solve social development, health and environmental protection problems —especially if they are covered by savings in electricity bills of the States and Municipalities and by the sale of excess power—. Additional revenues through either CDM project registration or the sale of greenhouse gas reductions in the international carbon markets are obtained —especially when they are intended for local sustainable development—. Project replicability is supported by means of the development of institutional and specialized technical capacities which are equivalent to those of the Baja California State Energy Commission or to the SIMEPRODE in the State of Nuevo Leon. 192 Mexico- Products I and II Bibliography 2 Grados, 2010. Residuos, cambio climático y electricidad: el caso de Monterrey. [En línea]. México 2 Grados. Disponible en: http://2grados.org/2010/08/residuos-cambioclimatico-y-electricidad-el-caso-de-monterrey/ [Consultado el 10 de septiembre de 2010]. Aguilar, D., 2010. Inicia operaciones parque eólico Eurus. El Universal. El Gran Diario de México. [Internet] 13 de septiembre. 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Título de permiso de autoabastecimiento de energía eléctrica Núm. E/130/AUT/99 otorgado a Mexicana de Hidroelectricidad Mexhidro, S. de R.L. de C.V. [pdf] México: CRE. Disponible en: http://www.cre.gob.mx/registro/permisos/electricidad/e130aut99.pdf [Consultado el 9 de septiembre de 2010]. Comisión Reguladora de Energía (CRE), 1999b. Título de permiso de autoabastecimiento de energía eléctrica Núm. E/136/AUT/999 otorgado a Ingenio el Higo, S.A. de C.V. [pdf] México: CRE. Disponible en: http://www.cre.gob.mx/registro/permisos/electricidad/e136aut99.pdf [Consultado el 13 de septiembre de 2010]. Comisión Reguladora de Energía (CRE), 1999c. Resolución sobre la solicitud de permiso para generar energía eléctrica bajo la modalidad de autoabastecimiento, presentada por Ingenio el Higo, S.A. de C.V. RES/083/99. [pdf] México: CRE. Disponible en: http://www.cre.gob.mx/documento/resolucion/RES-083-1999.pdf [Consultado el 9 de septiembre de 2010]. Comisión Reguladora de Energía (CRE), 2000a. Título de permiso de autoabastecimiento de energía eléctrica Núm. E/161/AUT/2000 otorgado a Ingenio Melchor Ocampo S.A. de 196 Mexico- Products I and II C.V. [pdf] México: CRE. Disponible en: http://www.cre.gob.mx/registro/permisos/electricidad/e161aut00.pdf [Consultado el 13 de septiembre de 2010]. Comisión Reguladora de Energía (CRE), 2000b. Resolución sobre la solicitud de permiso para generar energía eléctrica bajo la modalidad de autoabastecimiento, presentada por Ingenio Melchor Ocampo S.A. de C.V. RES/034/2000. [pdf] México: CRE. Disponible en: http://www.cre.gob.mx/registro/resoluciones/2000/Res034-2000.pdf [Consultado el 13 de septiembre de 2010]. Comisión Reguladora de Energía (CRE), 2001a. Título de permiso de autoabastecimiento de energía eléctrica Núm. E/201/AUT/2001 otorgado a Eléctrica del Valle de México, S. de R.L. de C.V. [pdf] México: CRE. Disponible en: http://www.cre.gob.mx/documento/permiso/electricidad/E-201-AUT-2001.pdf [Consultado el 8 de septiembre de 2010]. Comisión Reguladora de Energía (CRE), 2001b. Resolución por la que se otorga a Eléctrica del Valle de México, S. de R.L. de C.V., permiso para generar energía eléctrica bajo la modalidad de autoabastecimiento. RES/173/2001. [pdf] México: CRE. Disponible en: http://www.cre.gob.mx/documento/resolucion/RES-173-2001.pdf [Consultado el 8 de septiembre de 2010]. Comisión Reguladora de Energía (CRE), 2002a. Título de permiso de autoabastecimiento de energía eléctrica Núm. E/215/AUT/2002 otorgado a Parques Ecológicos de México. [pdf] México: CRE. Disponible en: http://www.cre.gob.mx/registro/permisos/electricidad/e215aut02.pdf [Consultado el 7 de septiembre de 2010]. Comisión Reguladora de Energía (CRE), 2002b. Título de permiso de cogeneración de energía eléctrica Núm. E/217/COG/2002 otorgado a Bioenergía de Nuevo León, S.A. de C.V, [pdf] México: CRE. Disponible en: http://www.cre.gob.mx/documento/permiso/electricidad/E-217-COG-2002.pdf [Consultado el 9 de septiembre de 2010]. Comisión Reguladora de Energía (CRE), 2002c. Resolución por la que se otorga a Bioenergía de Nuevo León, S.A. de C.V., permiso para generar energía eléctrica bajo la modalidad de cogeneración. RES/225/2002. [pdf] México: CRE. Disponible en: http://www.cre.gob.mx/registro/resoluciones/2002/res-225.pdf [Consultado el 10 de septiembre de 2010]. Comisión Reguladora de Energía (CRE), 2003a. Título de permiso de autoabastecimiento de energía eléctrica Núm. E/241/AUT/2003 otorgado a Proveedora de electricidad de Occidente, S.A. de C.V. [pdf] México: CRE. Disponible en: 197 Mexico- Products I and II http://www.cre.gob.mx/registro/permisos/electricidad/e241aut03.pdf [Consultado el 9 de septiembre de 2010]. Comisión Reguladora de Energía (CRE), 2003b. Resolución por la que se otorga a Energía Altamira, S.A. de C.V., permiso para generar energía eléctrica bajo la modalidad de producción independiente RES/287/2003. [pdf] México: CRE. 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[pdf] México: CRE. Disponible en: http://www.cre.gob.mx/documento/resolucion/RES-062-2006.pdf [Consultado el 9 de septiembre de 2010]. 198 Mexico- Products I and II Comisión Reguladora de Energía (CRE), 2007a. Resolución por la que se modifican la carátula, el proemio y las condiciones tercera y sexta del permiso de autoabastecimiento de energía eléctrica E/531/AUT/2006, otorgado a Eurus, S.A. de C.V. [pdf] México: CRE. Disponible en: http://www.cre.gob.mx/registro/resoluciones/2007/144.pdf [Consultado el 7 de septiembre de 2010]. Comisión Reguladora de Energía (CRE), 2007b. Resolución por la que se otorga a PemexGas y Petroquímica Básica, Complejo Procesador de Gas Cd. Pemex, permiso para generar energía eléctrica bajo la modalidad de cogeneración [pdf] México: CRE. Disponible en: http://www.cre.gob.mx/registro/resoluciones/2007/028.pdf [Consultado el 11 de septiembre de 2010]. Comisión Reguladora de Energía (CRE), 2009a. Título de permiso de autoabastecimiento de energía eléctrica Núm. E/832/AUT/2009 otorgado al Municipio de Mexicali, Baja California. [pdf] México: CRE. Disponible en: http://www.cre.gob.mx/documento/permiso/electricidad/E-832-AUT-2009.pdf [Consultado el 7 de septiembre de 2010]. Comisión Reguladora de Energía (CRE), 2009b. Resolución por la que la Comisión Reguladora de Energía otorga al Municipio de Mexicali, Baja California, permiso para generar energía eléctrica, bajo la modalidad de autoabastecimiento. RES/236/2009. [pdf] México: CRE. Disponible en: http://www.cre.gob.mx/documento/resolucion/RES-2362009.pdf [Consultado el 8 de septiembre de 2010]. Comisión Reguladora de Energía (CRE), 2009c. Título de permiso de autoabastecimiento de energía eléctrica Núm. E/824/AUT/2009 otorgado a Energía Láctea, S. A. de C. V. [pdf] México: CRE. Disponible en: http://www.cre.gob.mx/documento/permiso/electricidad/E-824-AUT-2009.pdf [Consultado el 13 de septiembre de 2010]. 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Aprobación de la metodología para la determinación de los cargos por servicios de transmisión de energía eléctrica de los modelos de contrato de interconexión y de convenios de transmisión para la aplicación de cargo mínimo o cargo normal y sus opciones de ajuste con los correspondientes para fuentes de energía renovable a celebrarse entre la comisión federal de electricidad o LYFC y los permisionarios. RES/140/2001. Publicado el 7 de septiembre de 2001. [pdf] México: Presidencia de la República. Disponible en: http://www.conae.gob.mx/work/sites/CONAE/resources/LocalContent/340/1/images/res14 02001renovables.doc [Consultado el 5 de agosto de 2010]. Diario Oficial de la Federación (DOF), (07/02/2002). Acuerdo que autoriza el ajuste, 200 Mexico- Products I and II modificación y reestructuración a las tarifas para suministro y venta de energía eléctrica y reduce el subsidio a las tarifas domésticas. [En línea] México: Presidencia de la República. 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Diario Oficial de la Federación (DOF), (30/01/2006). Resolución por la que se aprueban modificaciones al Modelo de Contrato de Interconexión para Fuente de Energía Renovable y el Anexo F-R, aprobado mediante Resolución número RES/140/2001. RES/007/2006. Publicado el 30 de enero de 2006. [pdf] México: Presidencia de la República. Disponible en: http://201.147.98.8/dofdia/2006/ene06/pdf/30ene06_Se.pdf [Consultado el 5 de agosto de 2010]. Diario Oficial de la Federación (DOF), (20/04/2007a). Resolución por la que se aprueba el modelo de contrato de compromiso de compraventa de energía eléctrica para pequeño productor en el Sistema Interconectado Nacional. RES/085/2007. Publicado el 20 de abril de 2007. [pdf] México: Presidencia de la República. Disponible en: http://www.ordenjuridico.gob.mx/Federal/PE/APF/APC/SENER/Resoluciones/2007/2004 2007(1).pdf [Consultado el 5 de agosto de 2010]. Diario Oficial de la Federación (DOF), (09/07/2007b). Modificaciones al modelo de contrato de interconexión y a la metodología para la determinación de los cargos por servicios de transmisión de energía eléctrica para fuente renovable de energía. RES/192/2007. Publicado el 9 de julio de 2007. [pdf] México: Presidencia de la República. Disponible en: http://www.ordenjuridico.gob.mx/Federal/PE/APF/APC/SENER/Resoluciones/2007/0907 2007(1).pdf [Consultado el 5 de agosto de 2010]. Diario Oficial de la Federación (DOF), (27/06/2007c). Resolución por la que se aprueba el modelo de contrato de interconexión para fuente de energía solar en pequeña escala. RES/176/2007. Publicado el 9 de julio de 2007. [pdf] México: Presidencia de la República. Disponible en: 201 Mexico- Products I and II http://www.conae.gob.mx/work/sites/CONAE/resources/LocalContent/7157/1/CIFES.pdf [Consultado el 5 de agosto de 2010]. Diario Oficial de la Federación (DOF), (10/01/2007d). 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Diario Oficial de la Federación (DOF), (28/08/2009f). Programa Especial de Cambio Climático 2009-2012. Publicado el 28 de agosto de 2009. [pdf] México: Presidencia de la República. Disponible en: http://dof.gob.mx/PDF/280809-VES.pdf [Consultado el 29 de noviembre de 2010]. Diario Oficial de la Federación (DOF), (08/04/2010a). Resolución por la que la Comisión Reguladora de Energía expide el Modelo de Contrato de Interconexión para Fuente de Energía Renovable o Sistema de Cogeneración en Mediana Escala, y sustituye el Modelo de Contrato de Interconexión para Fuente de Energía Solar en Pequeña Escala por el Modelo de Contrato de Interconexión para Fuente de Energía Renovable o Sistema de Cogeneración en Pequeña Escala. RES/054/2010. Publicado el 8 de abril de 2010. [pdf] México: Presidencia de la República. Disponible en: http://dof.gob.mx/nota_detalle.php?codigo=5137984&fecha=08/04/2010 [Consultado el 10 de agosto de 2010]. Diario Oficial de la Federación (DOF), (20/04/2010b). Resolución por la que la Comisión Reguladora de Energía sustituye el modelo de contrato de interconexión para fuente de 203 Mexico- Products I and II energía renovable y sus anexos (F-R, IB-R, TC-R, TM-R); los modelos de convenio para el servicio de transmisión de energía eléctrica para fuente de energía renovable (M1-R, M2R, N1-R, N2-R), y la metodología para la determinación de los cargos por servicios de transmisión de energía eléctrica para fuente de energía renovable por el modelo de contrato de interconexión para fuente de energía hidroeléctrica y sus anexos (F-H, IB-H, TC-H, TM-H); los modelos de convenio para el servicio de transmisión de energía eléctrica para fuente de energía hidroeléctrica (M1-H, M2-H, N1-H, N2-H), y la metodología para la determinación de los cargos por servicios de transmisión de energía eléctrica para fuente de energía hidroeléctrica. RES/065/2010. Publicado el 20 de abril de 2010. [pdf] México: Presidencia de la República. 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Melchor Ocampo [En línea] Disponible en: Ubicación > http://ventas.zucarmex.com/english/melc_ubi.htm [Consultado el 14 de septiembre de 2010]. 213 Parameter Country Surface Population ANNEX 1: GENERAL INFORMATION OF THE COUNTRY Unit Value Year Source of Information Mexico Km2 In urban areas In rural areas In the country GDP Electrification rate In urban areas In rural areas In the country Electric Balance Energy consumption for generation Non renewable sources1 Renewable sources1 Foreign electricty commerce Electricity import Electricity export Total generation From non renewable sources1 From renewable sources1 Total final consumption of electricity1 Hydroelectric potential In operation Inventory2 Total CO2 Emissiones Emissions energy sector Emissions due to electricity generation CO2 emissions avoided by renewable generation Investment on generation Public investment on generation Conventional generation4,5 Renewable generation5 Private investment on generation Conventional generationl6,7 Renewable generation6,7 Public investment on I+D+i Conventional generation8,9 Renewable generation8,9 Private investment on I+D+i Conventional generation Renewable generation 1,964,375 2010 INEGI 78,987,743 24,275,645 103,263,388 815,289 2005 2005 2005 2010 INEGI INEGI INEGI INEGI % % % 99.0 91.3 97 2008 2008 2008 Presidencia de la Republica Presidencia de la Republica Presidencia de la Republica PJ PJ 1,987 463 2008 2008 SENER SENER PJ PJ 1.26 5.23 2008 2008 SENER SENER GWh/a GWh/a 206,113 39,120 2008 2008 PJ 1,034 2008 CFE SENER CFE SENER GW GW GW 11.34 39.00 50.34 2008 2009 CFE SENER Mt CO2e/a Mt CO2e/a Mt CO2e/a 715.3 71.58 20.5 2009 2008 2008 SENER CFE Analysis of information from SENER Analysis of information from CFE Analysis of information from UNFCCC millions of USD2007 millions of USD2007 536 362 2008 2008 CFE CFE millions of USD2007 millions of USD2007 100.44 57.7 2008 2008 Analysis of information with CRE Analysis of information from CRE millions of USD2007 523.68 2009 millions of USD2007 32.18 2009 Analysis of information with CONACYT Analysis of information from the Office of the President Analysis of information from CIE - UNAM Idem Number of people Number of people Number of people millions of USD2007 Non available Non available Notes: 1. Includes self-supply and cogeneraton by licence holders. 2. It refers to the theoretical potential untapped small and large hydroelectric plants. 3. It was used an emission factor of 0.524 kgCO2/kWh, following the methodologies. "Consolidated baseline methodology for grid-connected electricity generation from renewable sources” (ACM0002) and “Grid connected renewable electricity generation (AMS-ID)”, accepted by UNFCC 4. It does not include the investments required to rehabilitate and modernize. 5.It was used a rate of 12.03 MXP to convert to USD 2007. 6. It was used a rate of 12.19 per 1 USD MXP to convert to USD 2008. 7. It was used a factor of 1.0370 to transform from USD 2008 to USD 2007 8. It was used a rate of 12.92 per 1 USD MXP to convert to USD 2009 9. 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