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News Article

CFE Increases Use of Fuel Oil for Power Generation

By María José Goytia | Fri, 05/27/2022 - 13:05

CFE strengthens its use of fossil fuels as a source for power production: in 2021, the state utility increased its fuel oil consumption, according to its most recent financial report. Despite high costs and adverse effects on health and the environment, CFE continues to bet on the PEMEX-produced fossil fuel.

In 2021, CFE increased its fuel oil consumption at its thermoelectric plants by 34.7 percent. Data from the utility’s report sent to the Senate show that last year, CFE generated 45.22TWh with fuel oil, equivalent to 13.8 percent of its total electricity generation, in comparison with the 33.56TWh generated in 2020, which equaled 5.6 percent of that year’s total.

The 8 percent increase can be partly explained by the Feb. 2021 natural gas shortage following a winter storm in Texas, which forced CFE power plants to compensate for the lack of gas-fired power production.

Fuel oil is the main fuel product commercialized by PEMEX's six national refineries, but it is also the NOC’s most pollutant refined fuel due to its high sulfur content. CFE’s power producing arm is PEMEX's main customer for this fuel oil segment. Its purchases represent about 88 percent of the fuel's sales, according to the financial statements.

From 2017 to 2020, CFE's consumption of fuel oil decreased, especially during 2020 due to the pandemic-driven drop in electricity demand and the increased use of natural gas, wind and solar-powered plants.

However, the trend reversed in 2021, when López Obrador’s government promoted strategies to increase CFE's contribution to the energy matrix, regardless of cost or emissions caused by this power production. CFE’s aging thermoelectric plants are among the country’s most inefficient and polluting but continue to be utilized.

Experts emphasize that the increased use of fuel oil has serious effects on the environment and public health. For example, a refinery and thermoelectric power plant located in Tula, Hidalgo, send high levels of polluting gases into the Valley of Mexico, even though the area has already suffered four environmental emergencies in 2022.

The data used in this article was sourced from:  
Bloomberg, Expansión, Reforma
Photo by:   Pixabay
María José Goytia María José Goytia Journalist and Industry Analyst