Power Supply Opportunities

An Expert's View about Environmental Technologies in Mexico

Last updated: 22 Mar 2011

The Mexican electricity market grew by 25% in 2008 to reach a value of US$43.5 billion. By 2013, it is forecasted to have a volume of 881.7 TWh, which represents an increase of 135.6% since 2008.

Sector briefing Power Supply Opportunities in Mexico Why Mexico? Mexico?s power plays a key role both in the domestic and foreign markets. By 2014, the country?s power generation will account for 21% of Latin America?s, with a developing power surplus available for export to the US. Also, an annual 4.9% growth is expected in power consumption in Mexico for the period 2006-2016. The Mexican electricity market grew by 25% in 2008 to reach a value of US$43.5 billion. By 2013, it is forecasted to have a volume of 881.7 TWh, which represents an increase of 135.6% since 2008. The annual growth rate in terms of volume, between 2008 and 2013 is inputs are therefore the primary energy predicted to be 18.7%. sources used for power generation. These are supplied by a small number of large There are more than 30 million users, reaching companies. 97% of the population. Mexico had a total power generation of 230,640 GWh during Find general information on Mexican market 2009. Power consumption in Mexico is conditions on UKTI?s website. The Doing expected to grow 4.9% annually between 2006 Business Guide for Mexico gives an overview of and 2016. By 2012, the Mexican electricity Mexico?s economy, business culture, potential market is forecast to have a value of $80.5 opportunities and an introduction to other billion USD, representing an increase of 117% relevant issues. since 2007. Players in this market are vertically integrated, responsible for every part of the value chain from generation to retail to end-users. Key UK Trade & Investment Sector briefing: Power supply opportunities in Mexico involvement. This model of investment, known Opportunities as PIDIREGAS, has been very popular for the last eight years and many international Mexico's power is generated by CFE (Federal companies have participated. The following are Electricity Commission), the state-owned some of the latest contracted companies: monopoly for generation, transmission and distribution of electricity across the whole Combined Cycle Projects: Alstom Power, country. Siemens and MME Industries Geothermal Power Plants: Alstom, Technik and Conventional thermal generation using Mitsubishi petroleum-based fuels was the dominating Transmission lines and substations: Iberdrola source of electricity generation until 2008. and Siemens. Natural gas is now leading, representing Coal handling plants: Techint Compagni 48.8%. This explains the higher levels of gas Tecnica Internazionale consumption in the country. Although the state monopoly CFE controls the Total installed capacity power generation, transmission and Total installed capacity in Mexico is now distribution, there is a growing, more flexible, 51,035MW, including the following sources: market for private, self-consumption producers. At present there are 447 private ? Power Independent Producers: power generation projects that have been (11,457MW) approved by the Mexican government, mainly ? Hydropower plants: (11,333MW) on the auto-consumption and IPP schemes. ? Thermal Power Plants (consuming hydrocarbons): (23,235MW) Apart from secondary laws related to ? Coal fired plants: (2,600.0 MW) renewable energy sources, no major legislative ? Geothermal power plants: (960 MW) changes are expected in Mexico's power sector ? Nuclear power plants: (1,365 MW) in the short to medium term. ? Wind-driven power plants: (85 MW) 1) Energy Reform Investment The new laws (Law for the Development of One of the strongest tendencies in the world is Renewable Energy and Energy Transition the increase of electric demand. In Mexico, Financing, Law for the Sustainable Energy over the last few decades, this demand has Development) enacted in relation to the power grown at a faster pace than its GDP. For this sector, promote and regulate renewable reason, there will be greater investment in the sources, clean technologies and energy next ten years. The CFE will require efficiency. The most important features are: approximately 636 billion MXN of which 367 billion will come from the private sector. One of ? The Mexican state-owned public utilities the areas that needs a prompt response to (including CFE) shall enter into long-term these trends is investment in plants and contracts with private power generators electric facilities, as well as the selection of using renewable sources (i.e. back-up, determined technologies and fuels. power excess sales and others). Private sector involvement is limited and began ? The Mexican state-owned public utilities in the late 1990s, when CFE developed an (including CFE) will now be able to award Independent Power Producer (IPP) scheme contracts to private companies wanting to whereby private companies build and operate produce their own electricity, while excess the plants and sell 100% of the generated energy will go into the National Grid using power back to CFE. Another scheme is the Self- renewable sources and render wheeling, Consumption scheme in which private back-up, and other services in accordance companies are allowed to generate energy for with the terms and conditions established their own consumption, with the possibility of by the Regulatory Energy Commission selling any exceeding capacity to CFE or to (CRE), as well as receive excess power clients outside Mexico. input from such facilities. Every year CFE tenders large electric ? A governmental Renewable Energy Fund infrastructure projects (mainly power will be created to promote the use of generation) with private capital investment UK Trade & Investment Sector briefing: Power supply opportunities in Mexico renewable energy and energy efficiency, points are being constructed with the US and including providing financial guarantees and one with Guatemala. support. The head of CFE, Alfredo Elias recently A National Commission for Energy Efficiency will announced that Mexico is now exporting be created to promote and regulate (from a electricity to Guatemala. This is now possible technical stand point) energy efficiency. The thanks to the power interconnection grid commission shall prepare an energy efficiency between the two countries which will enable programme including the modernisation of the Mexico to export electricity to other Central electric public transport systems in Mexico. American countries in future. The grid is part of the project Siepac, a power transmission grid 2) New Plants which should connect the countries between During 2011 projects for a new generation of Mexico and Colombia, bringing them more up to 1,996MW will be tendered. Most of the energy security. Mexico could thus supply projects will be combined cycle plants, two electricity to more Central American countries wind generation projects for 100MW each, and in the future, depending on the progress of the two geothermal plants for 125MW in total. CFE grid's construction. started developing another large hydropower plant. Last September, a contract was awarded In November 2008, CFE signed an agreement to Mexico's Grupo ICA-750MW project known with Los Angeles' Water and Energy as La Yesca. Department for the wholesale of electricity generated by the geothermal power plant in 3) Transmission lines and Substations the municipality of Cerro Prieto, in Mexico's During 2009-2010 CFE will tender 46 projects Baja California state. for electricity transmission, compensation, conversion, distribution, energy provision and 5) Co-generation 1 substation works . At present, Mexico has a During December 2005, the Mexican transmission network of 20,000km (400kV), government approved a reform to allow Pemex 28,000km (230kV) and 547km (547kV). (the state-owned oil and gas monopoly in Mexico) to start selling electricity from co- 4) Interconnection Projects generation projects to CFE. At present, Pemex Mexico has a large national electric grid has an installed capacity of 2,132MW for self- (Sistema Eléctrico Nacional -SEN-) and two consumption and co-generation. With the independent, small systems, both located in reform it is expected that in eight years Pemex the Baja California Peninsula. CFE has two will increase this capacity to 4,000MW (with projects at the feasibility study phase to expected investments of approximately USD 5 interconnect these two independent systems to billion). 65% of this capacity will be sold to CFE the SEN using HVDC connections (possibly one and the remaining amount will be for auto- will be a Classic HVDC and the submarine Baja consumption. connection will use HVDC light technology). The outcome of these feasibility studies will 6) Self-Supply determine the technical characteristics of an Since 2007, 540 grants were given to Pemex international tender to put these projects in and to other private sector companies such as place. There will be opportunities for Iberdrola to generate electricity to supply their companies selling power electronics. Plans to company facilities, with extras being fed into the increase international interconnections are also national grid. underway. Mexico currently has eleven interconnection points with the US (two of Number Authorised Authorised Investment which are HDVC) and one with Guatemala. of Grants Capacity Energy (USD Million) Most are for emergency use but there is a (MW) (GWh) successful power trade primarily between Baja Total 540 5,732 27,931 5,149 California and California (with an export-import Industry 215 4,068 19,946 3,574 capacity of 800MW through a 230kV permanent synchronic connection) Pemex 33 567 2,479 351 . Two more Other 292 1,097 5,506 1,225 If you have any questions on the opportunities 1 The information on these projects is located in the above, contact the UKTI contacts named in this electronic procurement system report. www.compranet.gob.mx UK Trade & Investment Sector briefing: Power supply opportunities in Mexico Business opportunities aimed specifically at UK companies are added daily to UKTI?s website. These leads are sourced by our staff overseas in British Embassies, High Commissions and Consulates, across all sectors and in over 100 markets. You can be alerted to business opportunities on a regular basis by registering on the UKTI website. Find out more on UKTI?s business opportunities service on the UKTI website. UK Trade & Investment Sector briefing: Power supply opportunities in Mexico Major events and activities UKTI contacts Every year a number of energy and electricity Irasema Mendoza events are held in Mexico. Some relevant Head of Energy and Environment events taking place during 2010 and 2011 are: British Embassy Mexico Tel. +52 (55) 1670 3234 Expoelectrica Norte 2011 Email: irasema.mendoza@fco.gov.uk http://www.expoelectrica.com.mx/enter.html http://www.ukinmexico.fco.gov.uk Email: jsalazar@vanexpo.com.mx Place: CINTERMEX, Monterrey Date: 22-24 Feb 2011 Luis Dario Ochoa Trade and Investment Office Expoelectrica Internacional 2011 British Consulate, Monterrey http://www.expoelectrica.com.mx/enter.html Tel. +52 (81) 8356 5359 Email: jsalazar@vanexpo.com.mx Fax +52 (55) 8356 5379 Place: Centro Banamex, Mexico City Email: dochoa@ukconsulate.org Date: 1-3 June 2011 http://www.ukinmexico.fco.gov.uk The Green Expo 2011 www.thegreenexpo.com.mx Email: juditho@ejkrause.com Place: World Trade Center México, Mexico City Date: 27-28 September 2011 Telephone: + 52 55 5250 4844 / 5250 4857 Find full details of all events in this country and sector on the UKTI website. New export events are added daily to the site and you can register to be alerted to them on a daily, weekly or monthly basis UKTI?s Tradeshow Access Programme (TAP) provides grant support for eligible Small & Medium Sized Enterprises (SME's) to attend trade shows overseas. Find out more about UKTI support for attendance at overseas events UK Trade & Investment Sector briefing: Power supply opportunities in Mexico Next steps - How UKTI can help ? Arranging appointments British companies wishing to develop their ? Organise seminars or other events for business in the Mexican market are advised to you to meet contacts and promote your undertake as much market research and company in the Mexican market planning as possible in the UK. UKTI?s team in Mexico, with its wide local knowledge and This work is available via our Overseas Market experience, can provide a range of services to Introduction Service (OMIS) a chargeable British-based companies wishing to grow their service which assists British-based companies business in global markets. wishing to enter or expand their business in This can include: overseas markets. ? Provision of market information ? Validated lists of agents/distributors To find out more about commissioning this ? Key market players or potential work, or accessing other UKTI services and customers in the Mexican market specialist advice, please visit the UKTI website ? Establishment of interest of such to find contact details for your local UKTI contacts in working with you office. Whereas every effort has been made to ensure that the information given in this document is accurate, neither UK Trade & Investment nor its parent Departments (the Department for Business, Innovation & Skills, and the Foreign & Commonwealth Office), accept liability for any errors, omissions or misleading statements, and no warranty is given or responsibility accepted as to the standing of any individual, firm, company or other organisation mentioned. Published 2011 by UK Trade & Investment. Crown Copyright © UK Trade & Investment Sector briefing: Power supply opportunities in Mexico
Posted: 22 March 2011, last updated 22 March 2011

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