Puebla Ready to Capitalize on its Energy Potential

Q: How did the formation of the Energy Agency come about?

A: The agency was created based on Puebla’s energy potential, natural resources, and logistic advantages to attract investment; a capable state agency is crucial. Now, we pride ourselves on having one of the best state agencies in the country. The agency operates with federal funds. MX$72 million has been invested in the project from whichMX$10 million goes to the trust fund to support strategic projects. The agency will invest in projects that generate wealth for Puebla. That is how it should be; the government should invest in projects that generate benefits for the country. Social goals are key to the agency as well, but it will focus on communities’ economic development. The agency wants to supply sustainable energy so people can boost their own economic development. Economic development strengthens social well-being and security.

Q: Why is Puebla an attractive state for renewable energy project development?

A: There are several factors that make the state attractive. Consider gas, for example. The state is in a logistically privileged location in the center of the country and bordering many major states. Puebla’s consumption is quite high and rates are average. Puebla has potential to develop wind and solar energy as well. The state’s Sierra Norte and the Presa Nexaca have a great capacity for hydroelectric energy.

Waste to Energy (WTE) is an interesting energy to develop. If we do this right, we may become pioneers of this energy in Mexico. Currently, we have a sanitary landfill next to a separation plant, which will serve as our starting point for WTE. 

Q: What role will the agency have as a mediator between the public and private sectors?

A: We have a division that connects up both sectors. This is a key component for us. We want to connect clients with municipal and state bodies that direct energy projects. We want to be a one-stop shop for them. Many companies get demotivated when they perceive the government to be a hurdle rather than a partner. The agency does this differently. We want to boost companies and help them in every way we can. This notion is deeply embedded within our framework. We have a division that focuses on promoting Puebla, for which we will keep our doors wide open to potential investors. We want Puebla to become the seat for the energy sector in the country. 

Q: How is the agency planning to attract its targeted MX$40 billion in investment?

A:  In its initial stage, the agency is promoting the state of Puebla to attract investment. This means that if a project wants to invest in Puebla, our one-stop agency will follow up all processes and ensure that all the necessary information is ready, ranging from radiation to ejidos. We have a trust fund for energy development as well. This model that can become bankable if we get it right. It will allow us to add interesting projects to the state’s portfolio, partnering with groups that are starting projects and that need permits.  Many trusts do not want to take on that risk, but here, there will be an opportunity to start these projects and then offer them to large financial groups. These projects add new benefits to Puebla, such as WTE-projects or natural gas pipelines. The trust will have a subaccount focused on the process of public consultation and regional management while keeping the model completely transparent. Public consultation is a big stumbling block for companies. We can be a natural ally for the state and its residents and foster a good relationship. Private companies need to comply with many regulations, so these companies will have a vital ally in us.

Q: What is the current state of the agency’s 16 pre-projects?

A: In 2020, we will see significant developments regarding the use of natural gas vehicles. This will have a great impact on the environment and in the fight against huachicol as well. It will provide jobs for the entire cycle related to natural gas and conversion of vehicles. Natural gas in general is becoming a global trend. We are close to Texas, and as long as they keep fracking, we will have incredibly competitive prices ourselves too.  Valero, for instance, is already on board.

We have four PV parks: one is completing the licensing projects, one is waiting for construction, one is under construction and the last is pending on a land sale that is being finalized. All these projects are economically viable and contribute to healthy nodes and energy systems in general. I would like to be able to provide the state with 300km of gas pipelines leading to industrial zones. Competitivity is key to regional development, and having pipelines that provide cheap gas to zones, such as Tehuacan, Teziutlán, Huachinango or Izúcar de Matamoros, will allow us to be very competitive. Even big operations will be able to generate their own energy entirely, with combined cycles and innovative motors.

Due to COVID-19, the projects are somewhat delayed. The pandemic provides us with the possibility to become more resilient. The world is asking for a change in energy, and the pandemic can help accelerate the development of alternative sources, leaving behind unsustainable processes. The old ways of generating energy might be cheap at the moment, but you cannot put a price on people lives or nature.  

Q: What will Puebla’s energy mix look like?

A: We plan to have a healthy balance in Puebla’s energy mix. We would like to have a solar park with flow batteries to mitigate energy peaks. Natural gas and combined cycle generation will be important as well. We are not excluding any option regarding clean energy. Approximately, there is a 70-30 percent balance, where 70 percent is intermittent energies and 30 percent is natural gas and others. Puebla is already on its way toward developing renewable energies. In the past five years, 50 percent of Puebla’s 7GW energy use came from renewable sources installed in the state. Increasing these numbers is a big challenge, but you have to dream big. The team has all the necessary talent and is ready to take on new opportunities.

Q: How does the agency assess the notion of Energy Sovereignty in Mexico and how does it interpret that concept for Puebla?

A: Energy sovereignty does not sound great to me if it only concerns the national electric power company. Sovereignty means that Mexicans themselves are in charge of their own energy. The main goal should be to have a giant capacity for generation installed, so much so that there is plenty left for exports. I believe that once you enter Mexico, you are a part of the country. Our country’s welcoming nature is one of our greatest values. Therefore, any investor looking to enter the country is part of Mexico’s energy sovereignty as well.

Q: Considering the COVID-19 health crises, what are your goals moving forward?

A: We are working on the Ley de Mejora Energética project with the state. We have worked hard on this law project and would like all our city’s government staff members to be familiar with it because it is an integral part in further improving Puebla’s energy efficiency. We would like to set the cornerstones for the Waste to Energy (WTE) project. We also aim to have two solar parks with 200MW capacity installed this year. The Necaxa project should be increased to 36MW by applying improved technologies. We also aim to start a project regarding natural gas vehicles. The goal is to have 20 to 25 stations servicing a car park of 3,000 units, although 1,000 units would be satisfactory.  Once the infrastructure is ready, it will develop quite rapidly. Puebla has abundant experience in mechanical matters because it is a hub for the automotive sector.

The Energy Agency of Puebla was established in 2020, with the goal to attract investment to the State towards the energy transition that allows social well-being, as well as aid in the development of renewable and natural gas-based energy projects in the state of Puebla.