Q: What distinguishes INCO from other cogeneration companies in the Mexican market?
A: The main characteristic distinguishing INCO from the competition is that we are a service provider. We do not sell projects or equipment so we do not have any ties to a particular equipment manufacturer or provider. What we do is analyze our customers’ energy requirements to offer an adequate solution in terms of technical and economic feasibility. The selected solution can consist of any given technology including renewable energy and cogeneration projects. The chosen technology completely depends on a client’s particular characteristics. We also provide all the investment needed for the project and we keep ownership once it is completed, so the client does not have to worry about its operation and maintenance. What we sell to the client is not the project itself but the energy it produces, at lower rates than utility-produced power.
Q: Why are cogeneration projects included with renewable sources under clean energy technologies?
A: Global warming is caused by excess CO2 levels in the atmosphere and the objective of clean energy technologies is to mitigate the amount of greenhouse gas emissions. Technologies that mitigate emissions are not necessarily zero-emission technologies, a common misunderstanding. A conventional industrial process that uses electricity from the grid and uses an additional boiler to produce thermal energy has two sources of emissions. The electricity taken from the grid amounts to 0.5 tons/ MWh and the boiler generates 0.4 tons/MWh. In such cases producing the electricity needed for the process from renewable sources will only diminish a percentage of the emissions associated with the grid’s electricity. For instance, a solar project with a capacity factor of 21 percent would only diminish a fraction of the original emissions. The rest of the time electricity would continue to be consumed from the grid. A similar situation would be experienced with wind farms, which offer a 50 percent capacity factor.
Cogeneration technologies powered by diesel or natural gas emit an average of 0.35 tons of CO2 per megawatthour generated, a 30 percent reduction from the original emission levels associated with the plant’s electricity requirements. Cogeneration also will reduce the emissions from the boiler by 100 percent, amounting to a total reduction of 0.55 tons of CO2, a significantly higher percentage than reductions achieved with renewable energy. When considering these numbers, the market logic states that the most efficient technology to reduce greenhouse gas emissions in an intensive thermal process is cogeneration. For cases where the amount of thermal energy used is negligible or not required at all, renewables would probably be the smartest choice.
Q: What are the main challenges for cogeneration developers?
A: The biggest challenge is the lack of knowledge on energy alternatives. Having a monopolistic market for so long fostered this situation because companies did not have options and this discouraged them from learning about the topic. If companies become interested in energy alternatives they will make better decisions to improve their processes, costs and their environmental impact.
Q: How does INCO plan to participate in the wholesale electricity market?
A: Energy is treated as a commodity in a wholesale market, so INCO’s objective is to offer electricity at the lowest price using the most suitable technology for a specific company. INCO covers 100 percent of the investment required in a project even if it is located inside a company’s facilities, which is usually the case with cogeneration projects.