Renewable Energy - Observatory for Renewable Energy in Latin ...

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
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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
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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
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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 14 th , 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
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Mexico- Products I and II
Table 3. AAGR of energy intensity 1/ 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
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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
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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
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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
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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)
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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
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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 Km 2 .
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%.
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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 CO 2 , thus Mexico ranking as the thirteenth largest emitter of CO 2 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 CO 2 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.
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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.
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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 CO 2e 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
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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.
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Mexico- Products I and II
• 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.
2. 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.
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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) Energy information sources.
b) Social, economic and productive information sources by sector.
c) Energy legal and regulatory information.
d) 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 information 1
Mexico is the third largest country by surface area in Latin America, with 1,964,375 Km 2
(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.
1990-2000 2000-2009 1990-2009
Mexico 3.7% 1.2% 2.5%
Source: Own elaboration with data from INEGI (2010c) and SENER (several years).
2.3.2. Energy intensity
Figure 1. Gross Domestic Product in Mexico, 1990-2009.
Source: Own elaboration with data from INEGI (2010c).
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.
1990-2000 2000-2008 1990-2008
Mexico -1.41% 1.57% -0.1%
Source: Own elaboration with data from INEGI (2010c) and SENER (several years).
A disaggregation of energy intensity 2 (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 intensity 1/ 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 capita 3 , 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 installed 4 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 steam 5 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: 1990-
2000, 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 1999 6
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
 SO 2 
 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, 1990-
2008.
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, 1990-
2008.
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
CO 2 equivalent, placing Mexico as the thirteenth largest emitter of CO 2 worldwide
(Comisión Intersecretarial de Cambio Climático, 2009). Out of this total, emissions from
power generation account for 26% (112.46 million tonnes of CO 2 equivalent). Given this
emissions level, it is very likely that the country will be subject to significant international
pressure to limit its CO 2 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 30 th ) or Cuba (ranked 9 th ) (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.
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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.
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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/m 2 — 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.
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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;
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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)
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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;
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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.
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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;
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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 28 th , 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
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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 31 st , 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 7 th , 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 LyFC 7 ). 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.
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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 30 th , 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 4 th , 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.
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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
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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
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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;
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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 supplier 8 , 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.
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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.
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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
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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
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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 non-
Annex 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 25 th , 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,
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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 CO 2e (MtCO 2e ) —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 MtCO 2e (10.7%) and 15.1 MtCO 2e (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 MtCO 2e per year, while
transport sector projects totaled 3 (1.3%), with avoided emissions of 0.22 MtCO 2e 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 MtCO 2e (0.9%).
Categories
Table 8. Mexican CDM projects by category and stage.
CERs* by
registered projects
Registered
projects before
the Executive
Board
Registered
projects with
approval letters
but not registered
yet
Annual Average
CERs
Preliminary
projects with no
objection letter
but without
approval letters
Annual Average
CERs
CERs
Annual Average
awarded
CERs
Nr. tCO 2 e Nr. tCO 2 e/year Nr. tCO 2 e/year Nr. tCO 2 e/year
Electricity distribution 0 0 0 0 0 1 266,535
Energy efficiency 1 69,615 3 552,781 8 420,055 36 13,447,473
Industrial emission gases 1 4,789,363 2 3,323,462 1 102,592 4 800,773
Fugitive methane emissions 0 0 1 82,645 1 89,841 3 768,305
Wind 3 174,928 8 2,434,730 9 1,913,717 8 1,214,206
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
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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 1,726,627 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 15,153 4 109,930 3 916,906
Cogeneration 0 0 0 0 0 11 2,874,846
Subtotal 34 6,822,283 123 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 6,822,283 124 10,792,870 82 6,139,245 126 52,030,718
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 MtCO 2e , while 13 correspond to
hydropower plants (5%), with annual emission reductions of 0.58 MtCO 2e .
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
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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 CO 2
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
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Mexico- Products I and II
maintenance costs. Regarding the environmental front, they avoid CO 2 e 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
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Mexico- Products I and II
mechanism projects due to the large amount of avoided CO 2 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)
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Mexico- Products I and II
Description Units Information and data
Country
Mexico
Facility name
Cerro Prieto I
Location (Municipality - State)
Mexicali, Baja California
Technology
Geothermal power plant
Commissioning date October 12 th , 1973
Service type (Public/ nonpublic
service)
Legal business structure
(Public/ Private)
Modality in accordance with
the LSPEE
Developer
Permit number before the CRE
Public
Public
Reference year 2008
Parastatal entity
Rated power MW 180
Net power
MW
Gross electricity generation GWh 1293.52
Electricity used for public
service vs. Total sales
% 95.1
Comisión Federal de
Electricidad
Not applicable
Capacity factor % 82 9
Efficiency % 36.2 10
Energy source
Geothermal
Energy consumption in the PJ 12.86
reference year
Investment Million USD 2007 262.21 11
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.
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Mexico- Products I and II
Fixed operating and
maintenance costs
Variable operating and
maintenance costs
Operating and maintenance
costs
Million USD 2007 9.00
Million USD 2007 0.05
Million USD 2007 9.05
Energy selling price USD 2007 /MWh Not available
Avoided CO 2 emissions Million
0.6778 12
tonnes/year
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
kgCO 2 /kWh.
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Mexico- Products I and II
Cerro Prieto II geothermal field
Image 2. Facilities at Cerro Prieto II geothermal field.
Source: CFE (2010c).
Description Units Information and data
Country
Mexico
Facility name
Cerro Prieto II
Location (Municipality - State)
Mexicali, Baja California
Technology
Geothermal power plant
Commissioning date February 1 st , 1984
Service type (Public/ nonpublic
service)
Legal business structure
(Public/ Private)
Modality in accordance with
the LSPEE
Developer
Permit number before the CRE
Public
Public
Parastatal entity
Comisión Federal de
Electricidad
Not applicable
Reference year 2008
Rated power MW 220
Net power
MW
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Mexico- Products I and II
Gross electricity generation GWh 1581.82
Electricity used for public % 95.1
service vs. Total sales
Capacity factor % 82.1
Efficiency % 36.2
Energy source
Geothermal
Energy consumption in the
reference year
PJ 15.73
Investment Million USD 2007 256.38
Fixed operating and
Million USD 2007 11.00
maintenance costs
Variable operating and
maintenance costs
Million USD 2007 0.06
Operating and maintenance Million USD 2007 11.06
costs
Energy selling price USD 2007 /MWh Not available
Million tonnes/year Million tonnes/year 0.8289
Brief description
The power plant consists of
two units with the following
capacities: U-1 (110MW) and
U-2 (110MW).
Geothermal energy.
Information sources CFE (2008)
CFE (2009a)
SENER (2009a)
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Mexico- Products I and II
Cerro Prieto III geothermal field
Image 3. Facilities at Cerro Prieto III geothermal field.
Source: CFE (2010c).
Country
Description Units Information and data
Mexico
Facility name
Location (Municipality - State)
Technology
Cerro Prieto III
Mexicali, Baja California
Geothermal power plant
Commissioning date July 24 th , 1985
Service type (Public/ nonpublic
service)
Public
Legal business structure
Public
(Public/ Private)
Modality in accordance with
Parastatal entity
the LSPEE
Developer
Permit number before the CRE
Comisión Federal de
Electricidad
Not applicable
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Mexico- Products I and II
Reference year 2008
Rated power MW 220
Net power
MW
Gross electricity generation GWh 1581.82
Electricity used for public % 95.1
service vs. Total sales
Capacity factor % 82.1
Efficiency % 36.2
Energy source
Geothermal
Energy consumption in the
reference year
PJ 15.73
Investment Million USD 2007 320.47
Fixed operating and
Million USD 2007 11.00
maintenance costs
Variable operating and Million USD 2007 0.06
maintenance costs
Operating and maintenance
costs
Million USD 2007 11.06
Energy selling price USD 2007 /MWh Not available
Avoided CO 2 emissions Million tonnes/year 0.8289
Brief description
The power plant consists of
two units with the following
capacities: U-1 (110MW), U-2
(110MW).
Geothermal energy.
Information sources CFE (2008)
CFE (2009a)
SENER (2009a)
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Mexico- Products I and II
Cerro Prieto IV geothermal field
Image 4. Facilities at Cerro Prieto IV geothermal field.
Source: CFE (2010c).
Description Units Information and data
Country
Facility name
Location (Municipality - State)
Mexico
Cerro Prieto IV
Mexicali, Baja California
Technology
Geothermal power plant
Commissioning date July, 26 th , 2000
Service type (Public/ nonpublic
Public
service)
Legal business structure
(Public/ Private)
Modality in accordance with
the LSPEE
Developer
Permit number before the CRE
Public
Reference year 2008
Rated power MW 100
Net power
MW
Gross electricity generation GWh 718.96
Parastatal entity
Comisión Federal de
Electricidad
Not applicable
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Mexico- Products I and II
Electricity used for public % 95.1
service vs. Total sales
Capacity factor % 82.1
Efficiency % 36.2
Energy source
Geothermal
Energy consumption in the PJ 7.15
reference year
Investment Million USD 2007 145.67
Fixed operating and
maintenance costs
Variable operating and
maintenance costs
Operating and maintenance
costs
Million USD 2007 5.00
Million USD 2007 0.03
Million USD 2007
Not available
Energy selling price USD 2007 /MWh Not available
Avoided CO 2 emissions Million tonnes/year 0.3767
Brief description
The power plant consists of
four 25 MW units.
Geothermal energy.
Information sources CFE (2008)
CFE (2009a)
SENER (2009a)
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Mexico- Products I and II
Los Azufres geothermal field
Image 5. Facilities at Los Azufres geothermal field.
Source: CFE (2010c).
Description Units Information and data
Country
Mexico
Facility name
Los Azufres
Location (Municipality - State)
Ciudad Hidalgo, Michoacán
Technology
Geothermal power plant
Commissioning date August 4 th , 1982
Service type (Public/ nonpublic
service)
Legal business structure
(Public/ Private)
Modality in accordance with
the LSPEE
Developer
Permit number before the CRE
Public
Public
Reference year 2008
Rated power MW 194.5
Net power
MW
Parastatal entity
Comisión Federal de
Electricidad
Not applicable
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Mexico- Products I and II
Gross electricity generation GWh 1516.62
Electricity used for public % 96.2
service vs. Total sales
Capacity factor % 89
Efficiency % 36.2
Energy source
Geothermal
Energy consumption in the
reference year
PJ 15.08
Investment Million USD 2007 298.55
Fixed operating and
Million USD 2007 10.18
maintenance costs
Variable operating and
maintenance costs
Million USD 2007 0.06
Operating and maintenance Million USD 2007 10.24
costs
Energy selling price USD 2007 /MWh Not available
Avoided CO 2 emissions Million tonnes/year 0.7947
Brief description 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.
Information sources CFE (2008)
CFE (2009a)
SENER (2009a)
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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).
Country
Description Units Information and data
Mexico
Facility name
Location (Municipality - State)
Technology
La Venta II
Juchitán de Zaragoza, Oaxaca
Wind generators
Commissioning date November 10 th , 1994
Service type (Public/ nonpublic
service)
Public
Legal business structure
Public
(Public/ Private)
Modality in accordance with
the LSPEE
Developer
Parastatal entity
Comisión Federal de
Electricidad
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Permit number before the CRE
Not applicable
Reference year
Rated power MW 84.65
Net power
MW
Gross electricity generation GWh 876
Electricity used for public
service vs. Total sales
%
Capacity factor % 33.3
Efficiency % 36.1
Energy source
Wind energy
Energy consumption in the PJ 8.74
reference year
Investment Million USD 2007 617.9
Fixed operating and
maintenance costs
Million USD 2007
Variable operating and
maintenance costs
Million USD 2007
Operating and maintenance Million USD 2007 8.9
costs
Energy selling price USD 2007 /MWh Not available
Avoided CO 2 emissions Million tonnes/year 0.7947
Brief description The wind farm consists of 84
wind generators for a total
capacity of 84.6MW.
Information sources 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 Information and data
Country
Facility name
Location (Municipality - State)
Mexico
Eurus
Juchitán de Zaragoza, Oaxaca
Technology
Wind generators
Commissioning date October 29 th , 2009
Service type (Public/ nonpublic
Non-public
service)
Legal business structure
(Public/ Private)
Modality in accordance with
the LSPEE
Permit holder
Permit number before the CRE
Reference year
Rated power MW 300
Private (Investment Promoter
Company with Variable
Capital – S.A.P.I. de C.V.)
Self-supply
Eurus, S. A. P. I. de C.V.
E/832/AUT/2009
80

Mexico- Products I and II
Net power
MW
Gross electricity generation GWh 876
Electricity used for public
service vs. Total sales
%
Capacity factor % 33.3
Efficiency % 36.1
Energy source
Energy consumption in the PJ 8.74
reference year
Investment Million USD 2007 617.9
Fixed operating and
maintenance costs
Million USD 2007
Wind energy
Variable operating and Million USD 2007
maintenance costs
Operating and maintenance Million USD 2007 8.9
costs
Energy selling price
USD 2007 /MWh
Avoided CO 2 emissions Million tonnes/year 0.4590
Brief description The wind farm consists of 300
wind generators with different
capacities up to 3 MW each.
Information sources
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 Units Information and data
Country
Mexico
Facility name
Parques Ecológicos
Location (Municipality - State)
Juchitán de Zaragoza, Oaxaca
Technology
Wind generators
Commissioning date January 31 st , 2009
Service type (Public/ nonpublic
service)
Legal business structure
(Public/ Private)
Modality in accordance with
the LSPEE
Permit holder
Permit number before the CRE
Reference year
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
82

Mexico- Products I and II
Rated power MW 80
Net power
MW
Gross electricity generation GWh 280
Electricity used for public %
service vs. Total sales
Capacity factor % 40.0
Efficiency % 36.1
Energy source
Wind energy
Energy consumption in the PJ 2.79
reference year
Investment Million USD 2007 184.5
Fixed operating and
maintenance costs
Variable operating and
maintenance costs
Operating and maintenance
costs
Energy selling price
Million USD 2007
Million USD 2007
Million USD 2007 2.8
USD 2007 /MWh
Avoided CO 2 emissions Million tonnes/year 0.1467
Brief description
The wind farm has 64 wind
generators of 1.25 MW each
for a total capacity of 80 MW.
Information sources
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 14 th , 2010.
Description Units Information and data
Country
Mexico
Facility name
La Rumorosa
Location (Municipality - State)
Tecate, Baja California.
Technology
Wind generators
Commissioning date October 29 th , 2009
Service type (Public/ nonpublic
Non-public
service)
Legal business structure
(Public/ Private)
Modality in accordance with
the LSPEE
Permit holder
Permit number before the CRE
Public
Self-supply
Municipality of Mexicali
E/832/AUT/2009
84

Mexico- Products I and II
Reference year
Rated power MW 10
Net power
MW
Gross electricity generation GWh 27
Electricity used for public %
service vs. Total sales
Capacity factor % 30.8
Efficiency % 36.1
Energy source
Energy consumption in the
reference year
Wind energy
PJ 0.27
Investment Million USD 2007 26.19 13
Fixed operating and
Million USD 2007
maintenance costs
Variable operating and Million USD 2007
maintenance costs
Operating and maintenance
costs
Million USD 2007 0.27
Energy selling price USD 2007 /MWh Not available
Avoided CO 2 emissions Million tonnes/year 0.0141
Brief description
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).
Country
Facility name
Description Units Information and data
Location (Municipality - State)
Technology
Mexico
Eléctrica del Valle de México
(Lamatalaventosa)
Asunción Ixtaltepec and
Juchitán de Zaragoza,
Oaxaca.
Wind generators
Commissioning date April 1 st , 2010
Service type (Public/ nonpublic
Non-public
service)
Legal business structure
(Public/ Private)
Modality in accordance with
the LSPEE
Permit holder
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
E/201/AUT/2001
Reference year
Rated power MW 67.5
Net power
MW
Gross electricity generation GWh 365.16
Electricity used for public
service vs. Total sales
%
Capacity factor % 61.8
Efficiency % 36.1
Energy source
Energy consumption in the PJ 3.64
reference year
Investment Million USD 2007 158.3
Fixed operating and
maintenance costs
Million USD 2007
Variable operating and
maintenance costs
Operating and maintenance
costs
Energy selling price
Million USD 2007
Million USD 2007 3.7
USD 2007 /MWh
Wind energy
Avoided CO 2 emissions Million tonnes/year 0.0141
Brief description
The wind farm has 45 wind
generators of 1.5 MW each
for a total capacity of 67.5
MW.
Information sources
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 30 14 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 Units Information and data
Country
Mexico
Facility name
Cajón de Peñas
Location (Municipality -
Tomatlán, Jalisco.
State)
Technology
Hydro turbines
Commissioning date September 1 st , 2008
Service type (Public/
Non-public
non-public service)
Legal business structure
(Public/ Private)
Modality in accordance
with the LSPEE
Permit holder
Private (Public Limited
Company with Variable
Capital – S.A. de C.V.)
Self-supply
Hidroeléctrica Cajón de Peña
S.A de C.V.
Permit number before the
E/509/AUT/2006
CRE
Reference year
Rated power MW 1.2
Net power
MW
Gross electricity GWh 7.71
generation
Electricity used for public %
service vs. Total sales
Capacity factor % 73.3
Efficiency % 36.2
Energy source
Hydro
Energy consumption in
the reference year
PJ 0.077
Investment Million USD 2007 1.24
89

Mexico- Products I and II
Fixed operating and
maintenance costs
Variable operating and
maintenance costs
Operating and
maintenance costs
Million USD 2007
Million USD 2007
Million USD 2007
Not available
Not available
Not available
Energy selling price USD 2007 /MWh Not available
Avoided CO 2 emissions Million tonnes/year 0.0053
Brief description
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 Information and data
Country
Facility name
Location (Municipality - State)
Mexico
El Gallo
Cutzamala de Pinzón,
Guerrero.
Technology
Hydro turbines
Commissioning date December 1 st , 2006
Service type (Public/ nonpublic
Non-public
service)
Legal business structure
(Public/ Private)
Modality in accordance with
the LSPEE
Permit holder
Permit number before the CRE
Private (Limited Liability
Company with Variable
Capital – S. de R.L. de C.V.)
Self-supply
Mexicana de Hidroelectricidad
Mexhidro, S. de R.L. de C.V.
E/130/AUT/99
Reference year
Rated power MW 30
Net power
MW
Gross electricity generation GWh 101.3
Electricity used for public %
service vs. Total sales
Capacity factor % 46.4
Efficiency % 36.2
Energy source
Hydro
Energy consumption in the
reference year
PJ 1.01
Investment Million USD 2007 56.09
Fixed operating and Million USD 2007 Not available
91

Mexico- Products I and II
maintenance costs
Variable operating and
maintenance costs
Operating and maintenance
costs
Million USD 2007
Million USD 2007
Not available
Not available
Energy selling price USD 2007 /MWh Not available
Avoided CO 2 emissions Million tonnes/year 0.0531
Brief description
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 Information and data
Country
Mexico
Facility name
Constitución de Apatzingán
(Chilatlán)
Location (Municipality - State)
Jilotlán de Dolores, Jalisco.
Technology
Hydro turbines
Commissioning date November 1 st , 2005
Service type (Public/ nonpublic
Non-public
service)
Legal business structure
(Public/ Private)
Modality in accordance with
the LSPEE
Permit holder
Permit number before the CRE
Private (Public Limited
Company with Variable
Capital – S.A. de C.V.)
Self-supply
Proveedora de electricidad de
Occidente, S.A. de C.V.
E/241/AUT/2003
Reference year
Rated power MW 19
Net power
MW
Gross electricity generation GWh 76.29
Electricity used for public
service vs. Total sales
%
Capacity factor % 45.8
Efficiency % 36.2
Energy source
Hydro
Energy consumption in the
reference year
PJ 0.759
Investment Million USD 2007 21.44
Fixed operating and
Million USD 2007 Not available
maintenance costs
Variable operating and Million USD 2007 Not available
93

Mexico- Products I and II
maintenance costs
Operating and maintenance Million USD 2007 Not available
costs
Energy selling price USD 2007 /MWh Not available
Avoided CO 2 emissions Million tonnes/year 0.0400
Brief description
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 Information and data
Country
Mexico
Facility name
Manuel M. Torres
Location (Municipality - State)
Chicoasén, Chiapas
Technology
Hydro turbines
Commissioning date May 29 th , 1981
Service type (Public/ nonpublic
service)
Legal business structure
(Public/ Private)
Modality in accordance with
the LSPEE
Public
Public
Parastatal entity
Permit holder
Permit number before the CRE
Comisión Federal de
Electricidad
Not applicable
Reference year 2008
Rated power MW 2400
Net power
MW
Gross electricity generation GWh 7652.93
Electricity used for public % 99.2
service vs. Total sales
Capacity factor % 36.4
Efficiency % 36.2
Energy source
Hydro
Energy consumption in the
reference year
PJ 76.11
Investment Million USD 2007 4,055.85
Fixed operating and
Million USD 2007 16.79
maintenance costs
Variable operating and
maintenance costs
Million USD 2007 0.16
Operating and maintenance Million USD 2007 16.95
95

Mexico- Products I and II
costs
Energy selling price USD 2007 /MWh Not available
Avoided CO 2 emissions Million tonnes/year 4.0101
Brief description
The power plant consists of
eight 300 MW generating
units. It is located in the
Grijalva river basin.
Information sources CFE (2008)
CFE (2009a)
SENER (2009a)
Malpaso hydro project
Image 15. Malpaso hydropower plant.
Source: Mitsubishi, 2010.
Description Units Information and data
Country
Mexico
Facility name
Malpaso
Location (Municipality - State)
Tecpatán, Chiapas
Technology
Hydro turbines
Commissioning date January 26 th , 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
Permit number before the CRE
Public
Public
Parastatal entity
Comisión Federal de
Electricidad
Not applicable
Reference year 2008
Rated power MW 1080
Net power
MW
Gross electricity generation GWh 4928.81
Electricity used for public % 99.1
service vs. Total sales
Capacity factor % 52.1
Efficiency % 36.2
Energy source
Hydro
Energy consumption in the PJ 49.02
reference year
Investment Million USD 2007 4,961.87
Fixed operating and
maintenance costs
Million USD 2007 9.89
Variable operating and Million USD 2007 0.11
maintenance costs
Operating and maintenance Million USD 2007 10.00
costs
Energy selling price USD 2007 /MWh Not available
Avoided CO 2 emissions Million tonnes/year 2.5827
Brief description
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).
Country
Description Units Information and data
Mexico
Facility name
Location (Municipality - State)
Technology
Aguamilpa (Solidaridad)
El Nayar, Nayarit
Hydro turbines
Commissioning date September 15 th , 1994
Service type (Public/ nonpublic
service)
Public
Legal business structure
Public
(Public/ Private)
Modality in accordance with
Parastatal entity
98

Mexico- Products I and II
the LSPEE
Permit holder
Permit number before the CRE
Comisión Federal de Electricidad
Not applicable
Reference year 2008
Rated power MW 960
Net power
MW
Gross electricity generation GWh 2529.66
Electricity used for public % 99
service vs. Total sales
Capacity factor % 30.1
Efficiency % 36.2
Energy source
Hydro
Energy consumption in the
reference year
PJ 25.16
Investment
Fixed operating and
maintenance costs
Variable operating and
maintenance costs
Operating and maintenance
costs
Energy selling price
Avoided CO 2 emissions
Million 1,675.13
USD 2007
Million 6.50
USD 2007
Million 0.05
USD 2007
Million 6.55
USD 2007
USD 2007 /MWh Not available
Million 1.3255
tonnes/year
Brief description The power plant consists of four 180
MW generating units.
Information sources 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 Units Information and data
Country
Mexico
Facility name
Bioenergía de Nuevo León
Location (Municipality - State)
Salinas Victoria, Nuevo León.
Technology
Internal combustion engine
Commissioning date April 7 th , 2003
Service type (Public/ nonpublic
service)
Legal business structure
Non-public
Public (Public Limited Company
100

Mexico- Products I and II
(Public/ Private)
Modality in accordance with
the LSPEE
Permit holder
Permit number before the CRE
with Variable Capital – S.A. de
C.V.)
Cogeneration
Bioenergía de Nuevo León, S.A. de
C.V.
E/217/COG/2002
Reference year
Rated power MW 7.42
Net power
MW
Gross electricity generation GWh 58.25
Electricity used for public
service vs. Total sales
%
Capacity factor % 89.6
Efficiency % 27.6
Energy source
Biogas
Energy consumption in the
reference year
PJ 0.76
Investment
Fixed operating and
maintenance costs
Variable operating and
maintenance costs
Operating and maintenance
costs
Energy selling price
Avoided CO 2 emissions
Brief description
Million 17.62
USD 2007
Million Not available
USD 2007
Million Not available
USD 2007
Million Not available
USD 2007
USD 2007 /MWh Not available
Million 0.0305
tonnes/year
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 Units Information and data
Country
México
Facility name
Dulces Nombres
Location (Municipality - State)
Pesquería, Nuevo León.
Technology
Internal combustion engine
Commissioning date August 24 th , 1997
Service type (Public/ nonpublic
service)
Legal business structure
(Public/ Private)
Modality in accordance with
the LSPEE
Permit holder
Non-public
Public
Self-supply
Water and Drainage Services of
102

Mexico- Products I and II
Permit number before the CRE
Monterrey, a decentralized public
entity of the State Government of
Nuevo Leon.
E/56/AUT/97
Reference year
Rated power MW 9.2
Net power
MW
Gross electricity generation GWh 40.20
Electricity used for public %
service vs. Total sales
Capacity factor % 49.9
Efficiency % 24.1
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 CO 2 emissions
Brief description
Biogas
PJ 0.54
Natural gas
PJ 0.06
Million 10.71
USD 2007
Million Not available
USD 2007
Million Not available
USD 2007
Million Not available
USD 2007
USD 2007 /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
Information sources
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)
Planta Norte project
Image 19. Planta Norte project.
Source: Servicios de Agua y Drenaje de Monterrey (2006).
Description Units Information and data
Country
Facility name
Location (Municipality - State)
Technology
Commissioning date
Service type (Public/ nonpublic
service)
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
Permit number before the CRE
Public
Self-supply
Water and Drainage Services of
Monterrey, a decentralized public
entity of the State Government of
Nuevo Leon.
E/59/AUT/97
Reference year
Rated power MW 1.6
Net power
MW
Gross electricity generation GWh 14.02
Electricity used for public
service vs. Total sales
%
Capacity factor % 100
Efficiency % 32.7
Energy source 1
Biogas
Energy consumption in the
reference year 1
PJ 0.07
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
Natural Gas
PJ 0.09
MILLONES
DE USD 2007
Million
USD 2007
Million
USD 2007
Million
USD 2007
Million
USD 2007
1.86
Not available
Not available
Not available
Not available
105

Mexico- Products I and II
Avoided CO 2 emissions USD 2007 /MWh 0.0073
Brief description
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.
Information sources
CRE (1997b)
CRE (2010a)
Energía Láctea project
Image 20. Energía Láctea project.
Source: Comisión de Cooperación Ecológica Fronteriza (2008).
Description Units Information and data
Country
Mexico
Facility name
Energía Láctea
Location (Municipality - State)
Delicias, Chihuahua.
106

Mexico- Products I and II
Technology
Internal combustion engine
Commissioning date June 18 th , 2009
Service type (Public/ nonpublic
Non-public
service)
Legal business structure
(Public/ Private)
Modality in accordance with
the LSPEE
Private (Public Limited
Company with Variable
Capital – S.A. de C.V.)
Self-supply
Permit holder Energía Lactea, S. A. de C. V.
Permit number before the CRE
Reference year
Rated power MW 0.8
Net power
MW
Gross electricity generation GWh 5.06
Electricity used for public %
service vs. Total sales
Capacity factor % 72.2
Efficiency % 22.0
Energy source
Biogas
Energy consumption in the
reference year
PJ 0.08
E/824/AUT/2009
Investment Million USD 2007 0.70
Fixed operating and
Million USD 2007 Not available
maintenance costs
Variable operating and
maintenance costs
Million USD 2007 Not available
Operating and maintenance Million USD 2007 Not available
costs
Energy selling price USD 2007 /MWh Not available
Avoided CO 2 emissions Million tonnes/year 0.0027
107

Mexico- Products I and II
Brief description
Information sources
The power plant consists of a
0.80 MW motor-generator set.
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)
Country
Facility name
Description Units Information and data
Location (Municipality - State)
Mexico
El Higo
El Higo, Veracruz.
Technology
Steam turbo generators
Commissioning date June 2 nd , 1999
Service type (Public/ nonpublic
Non-public
service)
Legal business structure
(Public/ Private)
Modality in accordance with
the LSPEE
Permit holder
Permit number before the CRE
Reference year
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
109

Mexico- Products I and II
Rated power MW 12
Net power
MW
Gross electricity generation GWh 26
Electricity used for public %
service vs. Total sales
Capacity factor % 24.7
Efficiency % 11.2
Energy source
Sugar cane bagasse
Energy consumption in the PJ 0.83
reference year
Investment Million USD 2007 17.95
Fixed operating and
Million USD 2007 Not available
maintenance costs
Variable operating and Million USD 2007 Not available
maintenance costs
Operating and maintenance Million USD 2007 Not available
costs
Energy selling price USD 2007 /MWh Not available
Avoided CO 2 emissions Million tonnes/year 0.0136
Brief description
The power plant has 4 steam
turbo generators of 1.5, 2.5, 3
and 5 MW for a total capacity
of 12 MW.
Information sources
CRE (1999b)
CRE (1999c)
CRE (2010a)
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 Units Information and data
Country
Mexico
Facility name
San Miguel del Naranjo
Location (Municipality - State)
Ciudad del Maíz, San Luis
Potosí.
Technology
Steam turbo generators
Commissioning date Before 1992
Service type (Public/ nonpublic
service)
Legal business structure
(Public/ Private)
Modality in accordance with
the LSPEE
Permit holder
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 1314
Reference year
Rated power MW 9.3
Net power
MW
Gross electricity generation GWh 9.3
Electricity used for public
service vs. Total sales
%
Capacity factor % 11.4
Efficiency % 1.2
Energy source
Sugar cane bagasse
Energy consumption in the PJ 2.75
reference year
Investment Million USD 2007 5.17
Fixed operating and
maintenance costs
Million USD 2007 Not available
Variable operating and
maintenance costs
Million USD 2007
Not available
Operating and maintenance Million USD 2007 Not available
costs
Energy selling price USD 2007 /MWh Not available
Avoided CO 2 emissions Million tonnes/year 0.0049
Brief description
The power plant consists of
four 1.50 MW and a 3.30 MW
steam turbo generators.
Information sources
CRE (2010a)
112

Mexico- Products I and II
Melchor Ocampo project
Image 23. Facilities at Melchor Ocampo sugar mill.
Source: Zucarmex (2010).
Description Units Information and data
Country
Mexico
Facility name
Melchor Ocampo
Location (Municipality - State)
Autlán de Navarro, Jalisco.
Technology
Steam turbo generators
Commissioning date February 17 th , 2000
Service type (Public/ nonpublic
Non-public
service)
Legal business structure
(Public/ Private)
Modality in accordance with
the LSPEE
Permit holder
Permit number before the CRE
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 MW 6
Net power
MW
Gross electricity generation GWh 12
Electricity used for public %
service vs. Total sales
Capacity factor % 22.8
Efficiency % 6.1
Energy source
Sugar cane bagasse
Energy consumption in the
reference year
PJ 0.71
Investment Million USD 2007 8.75
Fixed operating and
Million USD 2007 Not available
maintenance costs
Variable operating and Million USD 2007 Not available
maintenance costs
Operating and maintenance
costs
Million USD 2007 Not available
Energy selling price USD 2007 /MWh Not available
Avoided CO 2 emissions Million tonnes/year 0.0063
Brief description
The power plant consists of
two 1.5 MW and a 3 MW turbo
generators.
Information sources
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 Units Information and data
Country
Facility name
Location (Municipality - State)
Mexico
Plutarco E. Calles
La Unión, Guerrero
Technology
Dual fuel
Commissioning date November 18 th , 1993
Service type (Public/ nonpublic
Public
service)
Legal business structure
Public
(Public/ Private)
Modality in accordance with
the LSPEE
Developer
Permit number before the CRE
Parastatal entity
Comisión Federal de
Electricidad
Not applicable
115

Mexico- Products I and II
Reference year 2008
Rated power MW 2100
Net power
MW
Gross electricity generation GWh 6883.31
Electricity used for public % 91.3
service vs. Total sales
Capacity factor % 37.4
Efficiency % 34.5
Energy source 1
Fuel oil
Energy consumption 1 in the
reference year
PJ 36.49
Energy source 2
Energy consumption 2 in the
reference year
Energy source 3
Diesel fuel
PJ 0.47
Coal
Energy consumption 3 in the PJ 34.79
reference year
Investment Million USD 2007 2,078.20
Fixed operating and
Million USD 2007 49.68
maintenance costs
Variable operating and
maintenance costs
Million USD 2007 1.57
Operating and maintenance Million USD 2007 51.25
costs
Energy selling price USD 2007 /MWh Not available
Avoided CO 2 emissions Million
tonnes/year
Not applicable
Brief description
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 Units Information and data
Country
Mexico
Facility name
Francisco Pérez Ríos
Location (Municipality - State)
Tula, Hidalgo
Technology
Steam turbine
Commissioning date June 30 th , 1991
Service type (Public/ nonpublic
service)
Legal business structure
(Public/ Private)
Modality in accordance with
Public
Public
Parastatal entity
117

Mexico- Products I and II
the LSPEE
Developer
Permit number before the CRE
Comisión Federal de
Electricidad
Not applicable
Reference year 2008
Rated power MW 1545.6
Net power
MW
Gross electricity generation GWh 6774.43
Electricity used for public % 93.0
service vs. Total sales
Capacity factor % 50.0
Efficiency % 37.0
Energy source 1
Fuel oil
Energy consumption 1 in the
reference year
PJ 65.71
Energy source 2
Natural gas
Energy consumption 2 in the PJ 0.25
reference year
Investment Million USD 2007 1,579.55
Fixed operating and
maintenance costs
Million USD 2007 38.55
Variable operating and Million USD 2007 1.60
maintenance costs
Operating and maintenance Million USD 2007 40.15
costs
Energy selling price USD 2007 /MWh Not available
Avoided CO 2 emissions
Brief description
Million
tonnes/year
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.
Information sources CFE (2008)
CFE (2009a)
SENER (2009a)
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 Information and data
Country
Mexico
Facility name
Tamazunchale
Location (Municipality - State)
Tamazunchale, San Luis Potosí.
Technology
Combined cycle
Commissioning date June 21 st , 2007
Service type (Public/ nonpublic
service)
Legal business structure
(Public/ Private)
Modality in accordance with
the LSPEE
Developer
Permit number before the CRE
Non-public
Private
Reference year
Rated power MW 1078.84
Net power
MW
Gross electricity generation GWh 8518.56
Electricity used for public
service vs. Total sales
%
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
Capacity factor % 90.1
Efficiency % 51.5
Energy source 1
Natural gas
Energy consumption 1 in the PJ 59.56
reference year
Investment Million USD 2007 1,148.58
Fixed operating and
maintenance costs
Million USD 2007 Not available
120

Mexico- Products I and II
Variable operating and Million USD 2007 Not available
maintenance costs
Operating and maintenance Million USD 2007 Not available
costs
Energy selling price USD 2007 /MWh Not available
Avoided CO 2 emissions
Brief description
Information sources
Million
tonnes/year
Not applicable
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)
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 Information and data
Country
Mexico
Facility name
Altamira
Location (Municipality - State)
Altamira, Tamaulipas.
Technology
Combined cycle
Commissioning date November 1 st , 2006
Service type (Public/ nonpublic
service)
Legal business structure
(Public/ Private)
Modality in accordance with
the LSPEE
Developer
Permit number before the CRE
Non-public
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
Reference year
Rated power MW 1088.84
Net power
MW
Gross electricity generation GWh 8259.26
Electricity used for public
service vs. Total sales
%
Capacity factor % 87
Efficiency % 52.8
Energy source 1
Natural gas
Energy consumption 1 in the
reference year
PJ 56.333
Investment Million USD 2007 1,160.93
Fixed operating and Million USD 2007 Not available
122

Mexico- Products I and II
maintenance costs
Variable operating and
maintenance costs
Operating and maintenance
costs
Million USD 2007
Million USD 2007
Not available
Not available
Energy selling price USD 2007 /MWh Not available
Avoided CO 2 emissions Million
Not applicable
tonnes/year
Brief description
The power plant consists of four
176.395 MW gas
turbogenerators and two
191.63MW steam
turbogenerators. 100% natural
gas.
Information sources
CRE (2003b)
SENER (2009a)
2.5.8. 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 Information and data
Country
Mexico
Facility name
San Lorenzo Potencia
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
Cuautlalcingo, Puebla
Gas turbine
Not available
Public
Public
Reference year 2008
Rated power MW 266
Net power
MW
Gross electricity generation GWh 495.16
Electricity used for public
service vs. Total sales
% 99.4
Parastatal entity
Comisión Federal de
Electricidad
Not applicable
Capacity factor % 21.3
Efficiency % 31.5
Energy source 1
Natural gas
Energy consumption 1 in the PJ 5.66
reference year
Investment Million USD 2007 142.94
Fixed operating and
Million USD 2007 2.62
maintenance costs
Variable operating and Million USD 2007 0.06
124

Mexico- Products I and II
maintenance costs
Operating and maintenance Million USD 2007 2.68
costs
Energy selling price USD 2007 /MWh Not available
Avoided CO 2 emissions Million
Not applicable
tonnes/year
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.
Information sources CFE (2008)
CFE (2009a)
SENER (2009a)
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 Information and data
Country
Mexico
Facility name
Enertek
Location (Municipality - State)
Altamira, Tamaulipas.
Technology
Gas turbine
Commissioning date February 1 st , 1998
Service type (Public/ nonpublic
service)
Legal business structure
(Public/ Private)
Modality in accordance with
the LSPEE
Developer
Permit number before the CRE
Non-public
Private
Reference year
Rated power MW 128
Net power
MW
Gross electricity generation GWh 1007
Electricity used for public
service vs. Total sales
%
Cogeneration
Enertek, S.A. DE C.V.
E/36/COG/96
Capacity factor % 89.8
Efficiency %
Energy source 1
Natural gas
Energy consumption 1 in the PJ
Not available
reference year
Investment Million USD 2007 152.47
Fixed operating and
Million USD 2007 Not available
maintenance costs
Variable operating and
maintenance costs
Million USD 2007 Not available
Operating and maintenance Million USD 2007 Not available
126

Mexico- Products I and II
costs
Energy selling price USD 2007 /MWh Not available
Avoided CO 2 emissions Million
tonnes/year
Not applicable
Brief description
Not available
Information sources CRE (1996)
CRE (2010a)
Pemex gas turbine power plant
Description Units Information and data
Country
Facility name
Location (Municipality - State)
Mexico
Not available
Macuspana, Tabasco
Technology
Gas turbine
Commissioning date March 8 th , 2007
Service type (Public/ nonpublic
Non-public
service)
Legal business structure
(Public/ Private)
Modality in accordance with
the LSPEE
Developer
Permit number before the CRE
Public
Cogeneration
Pemex-Gas y Petroquímica
Básica, Complejo Procesador de
Gas Cd. Pemex
E/587/COG/2007
Reference year
Rated power MW 59
Net power
MW
Gross electricity generation GWh 495.6
127

Mexico- Products I and II
Electricity used for public %
service vs. Total sales
Capacity factor % 95.9
Efficiency %
Energy source 1
Natural gas
Energy consumption 1 in the PJ 0.616
reference year
Investment Million USD 2007 53.10
Fixed operating and
maintenance costs
Variable operating and
maintenance costs
Operating and maintenance
costs
Million USD 2007
Million USD 2007
Million USD 2007
Not available
Not available
Not available
Energy selling price USD 2007 /MWh Not available
Avoided CO 2 emissions Million
Not applicable
tonnes/year
Brief description
The power plant consists of two
gas turbogenerators with 24 and
35 MW, respectively. The
installed power capacity is 59
MW.
Information sources
CRE (2007b)
CRE (2010a)
2.5.9. 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)
Country
Facility name
Description Units Information and data
Location (Municipality - State)
Technology
Mexico
Gral. Agustín Olachea (San
Carlos)
Comondú, Baja California Sur
Internal combustion engine
Commissioning date August 16 th , 1991
Service type (Public/ nonpublic
service)
Public
Legal business structure
Public
(Public/ Private)
Modality in accordance with
the LSPEE
Developer
Permit number before the CRE
Reference year 2008
Parastatal entity
Comisión Federal de
Electricidad
Not applicable
129

Mexico- Products I and II
Rated power MW 104.12
Net power
MW
Gross electricity generation GWh 621.06
Electricity used for public
service vs. Total sales
% 96.4
Capacity factor % 68.1
Efficiency % 47.1
Energy source 1
Energy consumption 1 in the
reference year
Energy source 2
Fuel oil
PJ 4.75
Diesel fuel
Energy consumption 2 in the PJ 0.37
reference year
Investment Million USD 2007 174.16
Fixed operating and
maintenance costs
Million USD 2007 10.77
Variable operating and
maintenance costs
Million USD 2007 2.08
Operating and maintenance Million USD 2007 12.85
costs
Energy selling price USD 2007 /MWh Not available
Avoided CO 2 emissions Million
tonnes/year
Not applicable
Brief description
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.
Information sources CFE (2008)
CFE (2009a)
SENER (2009a)
130

Mexico- Products I and II
Baja California Sur I internal combustion power plant
Description Units Information and data
Country
Mexico
Facility name
Baja California Sur I
Location (Municipality - State)
La Paz, Baja California Sur
Technology
Internal combustion engine
Commissioning date July 28 th , 2005
Service type (Public/ nonpublic
Public
service)
Legal business structure
(Public/ Private)
Modality in accordance with
the LSPEE
Developer
Permit number before the CRE
Public
Reference year 2008
Rated power MW 78.9
Net power
MW
Gross electricity generation GWh 524.66
Electricity used for public
service vs. Total sales
% 96.4
Parastatal entity
Comisión Federal de
Electricidad
Not applicable
Capacity factor % 75.9
Efficiency % 42.6
Energy source 1
Fuel oil
Energy consumption 1 in the PJ 4.43
reference year
Investment Million USD 2007 129.48
Fixed operating and
maintenance costs
Million USD 2007 8.13
131

Mexico- Products I and II
Variable operating and Million USD 2007 2.25
maintenance costs
Operating and maintenance Million USD 2007 10.38
costs
Energy selling price USD 2007 /MWh Not available
Avoided CO 2 emissions Million
Not applicable
tonnes/year
Brief description
The power plant consists of two
units with the following
capacities: U-1 (37MW), U-2
(41.90MW). 100% fuel oil.
Information sources CFE (2008)
CFE (2009a)
SENER (2009a)
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 Information and data
Country
Mexico
Facility name
José López Portillo (Río
Escondido)
Location (Municipality - State)
Río Escondido, Coahuila
Technology
Coal-fired
Commissioning date September 21 st , 1982
Service type (Public/ nonpublic
service)
Legal business structure
(Public/ Private)
Modality in accordance with
the LSPEE
Developer
Permit number before the CRE
Public
Public
Reference year 2008
Rated power MW 1200
Parastatal entity
Net power
MW
Gross electricity generation GWh 9754.91
Electricity used for public
service vs. Total sales
% 93.0
Capacity factor % 92.8
Efficiency % 35.6
Energy source 1
Energy consumption 1 in the
reference year
Energy source 2
Energy consumption 2 in the
reference year
Coal
PJ 98.53
Diesel
PJ 0.22
Investment Million USD 2007 1,816.65
Fixed operating and Million USD 2007 44.90
Comisión Federal de
Electricidad
Not applicable
133

Mexico- Products I and II
maintenance costs
Variable operating and
maintenance costs
Operating and maintenance
costs
Million USD 2007 2.28
Million USD 2007 47.18
Energy selling price USD 2007 /MWh Not available
Avoided CO 2 emissions Million
Not applicable
tonnes/year
Brief description
The power plant consists of four
300 MW units. The fuel mixture
is 99.8% coal (domestic) and
0.2% diesel.
Information sources CFE (2008)
CFE (2009a)
SENER (2009a)
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 Information and data
Country
Mexico
Facility name
Carbón II
Location (Municipality - State)
Nava, Coahuila
Technology
Coal-fired
Commissioning date November 2 nd , 1993
Service type (Public/ nonpublic
service)
Legal business structure
(Public/ Private)
Modality in accordance with
the LSPEE
Developer
Permit number before the CRE
Public
Public
Reference year 2008
Rated power MW 1400
Parastatal entity
Comisión Federal de
Electricidad
Not applicable
Net power
MW
Gross electricity generation GWh 8034.23
Electricity used for public
service vs. Total sales
% 91.9
Capacity factor % 65.5
Efficiency % 38.5
Energy source 1
Coal
Energy consumption 1 in the PJ 75.03
reference year
Energy source 2
Diesel
Energy consumption 2 in the PJ 0.91
reference year
Investment Million USD 2007 2,119.42
135

Mexico- Products I and II
Fixed operating and
maintenance costs
Variable operating and
maintenance costs
Operating and maintenance
costs
Million USD 2007 52.38
Million USD 2007 1.88
Million USD 2007 54.26
Energy selling price USD 2007 /MWh Not available
Avoided CO 2 emissions Million
Not applicable
tonnes/year
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.
Information sources CFE (2008)
CFE (2009a)
SENER (2009a)
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 Information and data
Country
Mexico
Facility name
Laguna Verde
Location (Municipality - State)
Alto Lucero, Veracruz
Technology
Nuclear
Commissioning date June 29 th , 1990
Service type (Public/ nonpublic
service)
Legal business structure
(Public/ Private)
Modality in accordance with
the LSPEE
Developer
Permit number before the CRE
Public
Public
Parastatal entity
Comisión Federal de
Electricidad
Not applicable
Reference year 2008
Rated power MW 1364.88
Net power
MW
Gross electricity generation GWh 9803.98
Electricity used for public
service vs. Total sales
% 95.3
Capacity factor % 82.0
Efficiency % 33.3
Energy source 1
Uranium dioxide
Energy consumption 1 in the PJ 106.13
reference year
Investment Million USD 2007 3,135.70
Fixed operating and
Million USD 2007 65.82
maintenance costs
Variable operating and Million USD 2007 3.32
137

Mexico- Products I and II
maintenance costs
Operating and maintenance Million USD 2007 69.14
costs
Energy selling price USD 2007 /MWh Not available
Avoided CO 2 emissions
Brief description
Million
tonnes/year
Not available
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.
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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
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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).
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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
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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:
Source: Medina (2006)
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).
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
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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.
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3.3.2. Objectives
Figure 20. Bioenergía de Nuevo León Project scheme.
Source: Saldaña (2006).
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 Management and Processing
(SIMEPRODE).
Street lighting:
3. Municipality of Monterrey, State of Nuevo León
4. Municipality of San Pedro Garza García, State of Nuevo León
5. Municipality of San Nicolás de los Garza, State of Nuevo León
6. Municipality of General Escobedo, State of Nuevo León
7. Municipality of Santa Catarina, State of Nuevo León
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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)
Bank
Amount
6.29 million dollars (OPS, 2004)
SEISA 53% of capital needed (Saldaña, 2009)
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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 26 th , 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 1 st , 1987; it was further reformed by the Decree Nr. 388,
published in the Official State Gazette as of October 16 th , 2000, and finally by the Decree
Nr. 256, published in the Official State Gazette as of August 17 th , 2005 (Gobierno del
Estado de Nuevo León, 2010c).
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• 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 21 st , 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).
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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 m 3 .
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Figure 21. Operational scheme of Bioenergía de Nuevo León project.
Source: Saldaña (2006).
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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
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a radial power system that will determine the voltage level—. Thus, transmission service
fees (in pesos) for all different voltage levels, published on January 1 st , 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 1 st , 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 16 th , 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 15 th , 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
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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.
Positive social impacts
Source: Saldaña (2006).
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.
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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 5 th , 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 tCO 2 eq (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 6 th , 2002 (File Nr 847).
As stated in the document Nr. 510.003.03.074/2 as of July 1 st , 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
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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 26 th , 1996 as part of its
Fideicomiso Programa de Ordenamiento Urbano (Urban Enhancement Trust Fund).
• Document Nr. 051/H-0.1/97 as of December 8 th , 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
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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
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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.
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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).
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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).
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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.
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• 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 20 th , 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
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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
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
Table 10. Main technical features of La Rumorosa wind farm project.
Description
Wind generator
Model G-87
Individual rated capacity
Nr. Of turbines 5
Tower height
Rotor diameter
Start up wind speed
Cut off wind speed
3.4.6. Economical aspects
Financing
Gamesa – Spain
2 MW
78 meters
87 meters
3 m/s
21 m/s
Source: Machado, et al. (2010).
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

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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”
• ES t mge= is the excess power available in the time interval “t” during the month
“mgen”.
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• 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.
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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
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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.
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• 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
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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
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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 10 th , 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
Control dust and suspended matter by
moisturizing the construction area
Noise during construction
Waste generated during construction
Impacts on birds
Collect and send waste to a confined
area
Collect and send waste to a confined
area.
Use portable toilets during
construction
The control room will have septic tanks
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during operation.
Source: UNFCCC, 2010
Environmental impact studies
The environmental authorization for the construction of la Rumorosa wind farm was
conditionally granted on March 6 th , 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
23 th , 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
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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.
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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—.
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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 14 th , 2010.
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Image 35. Complementary facilities at La Rumorosa wind farm project
Source: Own elaboration, project site visit, Sepember 14 th , 2010.
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Image 36. La Rumorosa wind farm project.
Source: Own elaboration, project site visit, Sepember 14th, 2010.
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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.
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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 14 th , 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
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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
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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
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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
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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 m 3 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.
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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 CO 2 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
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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,
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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
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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...
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…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.
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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 26 th ,
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
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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)
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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
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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.
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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.
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203

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energía renovable y sus anexos (F-R, IB-R, TC-R, TM-R); los modelos de convenio para el
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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,
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213

ANNEX 1: GENERAL INFORMATION OF THE COUNTRY
Parameter Unit Value Year Source of Information
Country Mexico
Surface Km2 1,964,375 2010 INEGI
Population
In urban areas Number of people 78,987,743 2005 INEGI
In rural areas Number of people 24,275,645 2005 INEGI
In the country Number of people 103,263,388 2005 INEGI
GDP millions of USD 2007 815,289 2010 INEGI
Electrification rate
In urban areas % 99.0 2008 Presidencia de la Republica
In rural areas % 91.3 2008 Presidencia de la Republica
In the country % 97 2008 Presidencia de la Republica
Electric Balance
Energy consumption for generation
Non renewable sources 1 PJ 1,987 2008 SENER
Renewable sources 1 PJ 463 2008 SENER
Foreign electricty commerce
Electricity import PJ 1.26 2008 SENER
Electricity export PJ 5.23 2008 SENER
Total generation
From non renewable sources 1 GWh/a 206,113 2008 CFE
From renewable sources 1 GWh/a 39,120 2008 SENER
CFE
Total final consumption of electricity 1 PJ 1,034 2008 SENER
Hydroelectric potential
In operation GW 11.34 2008 CFE
Inventory 2 GW 39.00 2009 SENER
Total GW 50.34
CO2 Emissiones
Emissions energy sector Mt CO2e/a 715.3 2009 SENER
Emissions due to electricity generation Mt CO2e/a 71.58 2008 CFE
CO2 emissions avoided by renewable generation Mt CO2e/a 20.5 2008 Analysis of information from SENER
Analysis of information from CFE
Analysis of information from UNFCCC
Investment on generation
Public investment on generation
Conventional generation 4,5 millions of USD 2007 536 2008 CFE
Renewable generation 5 millions of USD 2007 362 2008 CFE
Private investment on generation
Conventional generationl 6,7 millions of USD 2007 100.44 2008 Analysis of information with CRE
Renewable generation 6,7 millions of USD 2007 57.7 2008 Analysis of information from CRE
Public investment on I+D+i
Conventional generation 8,9 millions of USD 2007 523.68 2009 Analysis of information with CONACYT
Analysis of information from the Office of the President
Analysis of information from CIE - UNAM
Renewable generation 8,9 millions of USD 2007 32.18 2009 Idem
Private investment on I+D+i
Conventional generation
Non available
Renewable generation
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. It was used a factor of 1.033 for USD 2009 to convert to USD 2007

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Idem a los 3 anteriores
Idem