Ricardo Páez
Director General
SIMEPRODE
/
Insight

Bioenergy Champion Upgrades Facilities

Wed, 02/24/2016 - 11:24

The Mexican laws indicate that state and municipal authorities have to handle waste from the residential sector. The Constitution of the State of Nuevo Leon adjudicates the responsibility of waste recollection to municipal authorities. However, municipalities have faced problems in fulfilling this commitment, for which they have contracted private parties dedicated to collection, while the public sector takes care of storage.

The reason behind this is that privately-owned landfills have a rather limited capacity and their costs are higher. Additionally, it is difficult for a private entity to obtain permits for waste storage because environmental regulations are stringent. Private waste collection companies can work for municipalities through concessions, but leaving collection and storage activities in the hands of the private sector is dangerous due to municipalities’ liquidity problem. “If the municipality cannot pay a government-owned operator, it still has to collect residential waste as mandated by the law, but if a private company does not receive its payment, it could stop providing the service. Failing to provide garbage collection services could result in significant social problems across the state, which is why waste management lies within the remit of the public sector,” explains Ricardo Páez, Director General of SIMEPRODE. The company was created in response to the unsanitary conditions generated by poor waste management practices and, originally, the organism was in charge of confinement. Subsequently, the sorting plant was built, and then the opportunity arose for investment with private entities to use the gas generated from waste. “Private companies had the knowledge and the support of international financing institutions with experience in environmental affairs, such as the World Bank,” tells Páez.

Regional conditions and regulations are responsible for SIMEPRODE’s success. In almost every state, says Páez, each municipality is responsible for waste management. “I believe that a model similar to ours will only work if other states create their own organizations similar to SIMEPRODE, so that a part of the waste control activities falls under municipal governments and another is managed at the state level.” In many states, the metropolitan area is the epicenter of waste generation, while suburban areas generate less, and therefore the conditions are not conducive to generating energy from waste. 

The maintenance operations that are currently being carried out intend to promote methane gas generation so that the plant can also increase the amount of energy produced. “We are currently producing 17MW, and we want to take our capacity to 24MW. By expanding the plant and making the necessary infrastructure adjustments, we can anticipate potential limitations in energy generations,” says Páez. Under current conditions, SIMEPRODE is producing enough energy to provide public lighting in the Monterrey metropolitan area and to power the city’s subway, the Government Palace, the Secretariat of Finances’ building, and the DIF building.

Unfortunately, increasing capacity is not high in SIMEPRODE’s list due to several constraints. The organization requires broad maintenance operations of recycling equipment, machinery, final confinement in landfills, and transmission substations. “In its current condition, the sorting plant does not have enough capacity to classify the amount of waste we are receiving,” shares Páez. One of the reasons SIMEPRODE is not considering investing in new technology is because its main clients are municipalities with a limited budget. “From a financial point of view, we are obtaining promising results, but the organization is experiencing problems with liquidity. Given our lack of resources, we cannot afford to think about mid- and long-term plans to expand the plant or buy new equipment.” In addition, changes in the structure of the market will also have an impact on SIMEPRODE’s operations, although the outcome could be a positive one. Páez acknowledges that CFE will face competition soon, which means that SIEMEPRODE will closely follow. “Our current strategy with CFE consists of anticipating competition in order to grow. In addition, we want to assess the possibility of adding new clients to our portfolio, since most of the energy we sell has been focused on federal dependencies at the state and municipal levels.”

New opportunities are appearing for SIMEPRODE. Páez comments that at the moment there is no exploitation, use, or commercialization of the waste in landfills in the outskirts of the metropolitan area. He believes the first step will not entail using gas to produce energy, but rather recycling and optimizing the raw materials. However, the Linares municipality is receiving an investment for recycling and generating gas for waste-to-energy generation. The main difference with SIMEPRODE is the technology being used. “They have an identical classification process that optimizes the recovery of raw and recyclable materials. The innovative aspect is that their technology enables them to capture the gas in tanks that can later be sold to energy generating entities,” Páez explains. This municipality could serve as a potential client or even a future partner of SIMEPRODE.