CFE Looks to Green Hydrogen on Path Toward Fuel Switching

Mexico’s state-owned electric utility CFE has attempted to implement new strategies to foster decarbonization and energy efficiency while ensuring a stable energy supply. More recently, CFE has revealed what its approach to fuel switching could look like in the future, with a major focus on green hydrogen.

The company announced that it is looking to implement state-of-the-art low-carbon and green hydrogen technology to generate electricity to boost Mexico’s energy transition. Guillermo Arizmendi, Director of Strategic Planning, commented on the importance of searching for innovative energy alternatives to lower emissions and diversify the power supply. “CFE is aware of the challenges that developing green hydrogen can pose… green hydrogen is an alternative to diversify power production, storage, distribution and the use of electricity,” Arizmendi added.

Carlos Andrés Morales Mar, Director of Operations, CFE, said that the development of this technology should be carried out gradually in order to properly research the ways to fully tap into its potential, especially if it is to be used as a large-scale substitute for fossil fuels.

Other experts have expressed their faith in Mexico’s potential to become a strong exporter of green hydrogen. Given the potentially low hydrogen production costs in the country, as well as the benefits of access to the Atlantic Ocean, Mexico is positioned as a fairly competitive long-distance exporter. Mexico’s renewable energy capacity could translate to 22GW of electrolysis capacity, which would then produce around 1.4 billion tons of green hydrogen a year.

CFE also reported that it has received up to 304,440 clean energy certificates (CELs), which granted the state utility an influx of US$3.73 million. The CELs it holds have increased since 2021, as only within the first six months of 2022, the number of these certificates has totaled 139,672, creating an income of US$1.71 million.

Adrián Olvera Alvarado, Director, CFE Generación V, highlighted that the goals set for 2021 in the development of combined cycle power plants are to reduce CO2 emissions and increase availability through a program consisting of 24 maintaining processes. Lastly, he revealed that CFE is planning to sign natural gas purchasing contracts to save US$14.61 million per month. Mexico’s modern combined cycle power plants could potentially run on a blend of natural gas and green hydrogen in the future.