Renewable Momentum Sparks Interest

Greater prospects in the energy segment are not only attracting new companies but also awakening leading firms already here. Top tier Spanish company Duro Felguera is among those that, after a period of slow growth, is hungry to grab its piece of the burgeoning potential. “After taking a low-profile approach we are working on growing our business in the country by bringing more resources and taking a more aggressive stance,” says the company’s Regional Sales Manager, Vicente Tamés. “We expect to be involved in more projects in the power sector, as well as in the oil and gas industry.”

Duro Felguera began operating in Mexico in the 1970s. It got involved in infrastructure projects in the 1990s and enjoyed its most successful period in Mexico’s energy industry during the following decade. “We developed 13 combined and simple cycle power generation projects for CFE, our main client, and private companies between 1998-2004,” says Tamés.

The company slowed its Mexican activities around 2005 to capitalize on the popularity that combined-cycle power plants were experiencing in Spain. “Although we have experienced periods of sluggish activity in Mexico, we have never stopped working in this country and we strive to maintain our relationship with the companies operating in this market by developing smaller projects,” Tamés says.

Now that renewable energies are gaining momentum in Mexico, Duro Felguera is assessing different strategies to capitalize on new opportunities. “At some point we were considering participating in the wind power industry by summiting proposals under the old Open Season scheme and we even analyzed the possibility of investing in our own wind farm,” Tamés says. Although he sees great potential in the mini-hydro segment, the required paperwork has discouraged the company from participating in the sector. Likewise, it stays away from large-scale hydroelectrics due to the civil works those entail. But it is eager to participate in geothermal and solar energy projects and Tamés says Duro Felguera plans to focus purely on the construction stages, which is the company’s core business. Natural gas-powered projects will remain an important element in its strategy, especially combined-cycle plants and cogeneration projects developed under different schemes.

One area Duro Felguera has not been deeply involved in is the electricity transmission and distribution sector. In Tamés’ view, the construction of substations is not as specialized as that of combined-cycle plants, which tends to discourage the EPC company from participating in tenders. “The low level of technical sophistication required makes costs the defining factor when choosing a proposal, further complicating the situation for companies participating in open tenders. For these reasons, the idea of developing electricity transmission and distribution infrastructure is attractive to us when it is included in a power generation project. For instance, when a client asks us to complement a combined cycle power plant with a substation and transmission lines.”

The company also has experience in developing alternating current substations. “In Mexico there is talk about the potential construction of a direct current transmission line, also known as an electric bipole, an area in which few companies have sufficient expertise. If this materializes, we would be interested in participating in partnership with the technology provider,” Tamés says. Previously, the company has won several contracts with private clients for the development of cogeneration projects including a 39MW power plant for Biopappel powered with General Electric turbines and a 36MW cogeneration plant for Kaltex Fibers in Altamira, which uses cutting-edge SGT-750 turbines from Siemens. In 2015, CFE tendered seven combined cycle plants. Duro Felguera participated in several including the Empalme I, Escobedo and Topolobambo projects, finally winning the contract for Empalme II, a 792MW combined cycle power plant in Sonora that will be developed in partnership with Elecnor. The company also is developing an 18MW cogeneration plant for Scribe, a Bio-PAPPEL Group company.