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CFE Reveals More Details About Energy Investments

By Cas Biekmann | Thu, 12/10/2020 - 09:06

CFE announced additional information regarding the expansion of its power producing capacity. The state utility is planning to install 4,347MW through combined cycle and aeroderivative turbines totaling MX$62.754 billion (US$3.15 billion) in investment.

The capacity will consist of the six combined cycle-based natural gas projects, announced at the end of November during the second round of infrastructure projects, along with extra capacity coming via aeroderivative turbines, reported La Jornada. These projects will primarily focus on the Yucatan and Baja California peninsulas, accounting for 1,547MW and 1,714MW, respectively. Both areas are located far away from Mexico’s main grid, making these projects necessary to meet the local energy demand.

During CFE’s Board of Directors online meeting, the utility estimated that these power plants will generate a total of 30,365 direct and indirect jobs, mostly in the construction phase. Toward their operational phase, the projects are expected to create 1,515 jobs.

Furthermore, CFE presented its 2021-2025 business plan, as well as the 2020-2021 financial program. CFE Director Manuel Bartlett reported that the company’s financial situation was in good standing , noting that its good position has allowed the company to invest in further assets. Edmundo Sánchez, Corporate Director of Finance at CFE, highlighted that the business plan serves to increase CFE’s assets and aligns with the needs of the government. He furthermore stated  that the plan features a methodological approach in regards to sustainability, governance and the reduction of power producing costs. At the core of the plan is the increase in generation capacity, which will be enhanced by over 4.5 percent. This will be combined with initiatives to modernize existing power plants. Minister of Energy Rocío Nahle acknowledged CFE’s efforts and urged directors to further consolidate the rescue of the state utility.

The new power plants CFE aims to build will all run on natural gas, which is rapidly gaining more ground in Mexico’s energy mix. In an expert opinion for MBN, Founder of Energy to Market, Hans Joachim Kohlsdorf, explains why this shift is happening. “Due to its low cost and lower polluting emissions, natural gas is replacing other hydrocarbons within the energy source matrix, particularly in the generation of electricity in large combined cycles and in cogeneration, such as in natural gas for vehicles and fuel for boilers. Technological changes in hydrocarbon exploration and extraction have increased supply, while consumption growth has been slowed, leading to a price collapse. It is clear that, in turn, the fall in prices has had a major impact reducing the use of coal in favor of natural gas. It might even be said that there is an over-supply of inexpensive and widely available hydrocarbons worldwide and especially within North America,” he said.

The data used in this article was sourced from:  
CFE, La Jornada, Energía a Debate
Cas Biekmann Cas Biekmann Journalist and Industry Analyst