Enzo Losito
CEO
Ab Energy México
César Sánchez
César Sánchez
Regional Sales Manager
Ab Energy México
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Insight

Reinvigorating Cogeneration’s Reputation in Mexico

Mon, 02/25/2019 - 16:04

Mexico is committed to achieving 35 percent clean energy generation in its mix by 2024 and renewable energy provides a variety of sources to meet these requirements. Nevertheless, efficient cogeneration still plays a significant role in this transition. “Cogeneration is a good choice for Mexico’s relevant industrial sectors as this technology can be integrated into different production processes,” says Enzo Losito, CEO of AB Energy Mexico, the Mexican subsidiary of AB Group, a global leader in cogeneration turnkey solutions.
Cogeneration systems can be introduced in almost any industry, Losito says, especially those where thermal power is relevant, such as the chemical, pharmaceutical and food industries. “Based on this principle, we customize each plant for every customer and every application as we work with natural gas, biogas, special gas and greenhouse systems at commercial and industrial scales,” he adds.
According to CRE, in 2017 there were 30 certified cogeneration plants in Mexico, representing 1.7 percent of total installed capacity and generating 2.1 percent of overall electricity. “When we arrived in the country in 2016, we were faced with an immature market. Some cogeneration plants were operated by nonspecialized companies and this resulted in a bad reputation for our technology. To some extent, we had to intervene in some projects because clients asked for our cooperation and we wanted to create confidence in our products.” says César Sánchez, Regional Sales Manager of AB Energy México. According to Sánchez, the market’s opening had some loose ends in terms of legislation at the beginning of its implementation, although these have since been closed. “As of the third quarter of 2018, Mexico has the perfect conditions for developing cogeneration. We are identifying an ROI of less than two years, which is what we observed in Italy when the cogeneration boom took place there.” Globally, efficient cogeneration produces 9 percent of the total installed capacity.
Sánchez adds that within the new regulatory framework, entrant technologies must be adapted to the market and its players. “Over the last three years, we have come to understand the grid code’s technical requirements. Our product has been adapted and its production is tailored to comply with CENACE’s conditions.” Sánchez also says that dynamic grid codes are quite developed in countries like Germany and Italy, where AB Energy has significant operations. “In Mexico, the grid code is relatively new, and while other companies struggle to operate accordingly, we already know how our machines should behave with the new regulation.” He adds that financial institutions are also maturing as they have seen good returns in this sector and are becoming more open to invest as a result.
One area where cogeneration technology is making a breakthrough in Mexico is in greenhouse systems. The electrical energy can be used for lighting or fed into the grid, the heat can be employed for hot water production and the CO2 contained in the engine’s gases can be absorbed and used to stimulate crop growth. “We installed our first cogeneration greenhouse system in the country and it is the first one of its kind in Mexico. The plant has been running for three months and it generates 3MW of electricity and almost the same amount of heat. At the same time, CO2 gases are being recovered and cleaned to be reinjected into the greenhouse,” says Sánchez. He adds that this client is innovating in the market, as it participates in the MEM by complementing this power source with solar energy generation. Losito adds that the proper federal policies can go a long way to developing cogeneration capabilities. “Distributed power with gas engines provides the market with stability and flexibility and offers the opportunity to produce energy very close to the point of consumption. Given the current development of the Mexican electricity mix, the implementation of cogeneration technology is unavoidable.”
Going forward, AB Energy is targeting a wider presence in Mexico that helps boost jobs and competition. “Even though our industry is not labor intensive, our goal is to grow our footprint in the country and create professional competencies by training our people abroad,” says Losito. In June 2018, AB Energy also inaugurated DOABLE, a digitalization research center located in Italy that aims to achieve a conjuncture between industrial and digital capabilities through the introduction of 4.0 industry practices.