Kevin Piccolo
Director General
Seisa Energía
/
View from the Top

Solid Cogeneration Solutions to Benefit Industry, Hospitality

By Cas Biekmann | Tue, 08/17/2021 - 11:12

Q: What would be a good example of a Seisa Energía success story in the Mexican market?

A: Seisa has participated in numerous successful projects. We have designed a modular cogeneration system that works with two gas turbines of 1.5 MW each and a heat recovery boiler that, with the temperature of the exhaust gases, product of the combustion of the turbine, raises the temperature of the water to produce steam. It is a compact solution that does not require much more infrastructure to install because it is already in a container mounted on a trailer. This makes it an interesting solution that we provide through an energy-as-a-service business model.

We have already provided 22 of these systems, and some clients in Mexico use up to five. We also have clients in the US and Canada. Seisa additionally provides the operation and maintenance service, although some clients prefer to operate the system themselves after the training we provide. Customers are delighted with this approach because we not only sell a project but we stay for the life of the project, giving our customers the certainty that the acquired system will be able to continue operating for many years.

We have specialized personnel to carry out preventive and corrective maintenance, keeping stock of spare parts and equipment to replace them if necessary and thus avoid downtime.

Combined heat and power (CHP) is an efficient technology with low costs and a drastic decrease in CO2 emissions, so we hope to introduce it to new regions and industries. Traditionally, heat-intensive industries, such as food and beverages, can benefit from this technology. Hotels stand to gain as well, since they require extensive heating and cooling. Our smaller installations would be ideal for them.

 

Q: How does the company demonstrate its expertise through projects outside of conventional cogeneration setups?

A: The Benlesa Bioenergy power plant in Nuevo Leon is another interesting success case for Seisa. This is a 16MWproject, with 16 1MW engines attached to a landfill. We capture the biogas from the generated solid waste and use it in a cogeneration process. It is a unique project that has been operating very efficiently for some years now. It helps to decrease CO2 emissions on two levels: by generating cleaner energy and by capturing the otherwise harmful methane emissions of the landfill. Since Mexico has many landfills of this type, this technology could definitely become an interesting avenue in other areas of the country. One can imagine how much methane is not only lost but actively harming the environment. The project has been constructed in a public-private partnership involving the Nuevo Leon government. They use the energy for their buildings and for the metro system, for instance.

 

Q: How would you assess the potential for cogeneration growth in Mexico, despite the regulatory uncertainty?

A: This is a difficult scenario. However, since cogeneration is a distributed and local energy source, it will be an essential part of Mexico’s future electrification. Over time, there will be fewer resources to invest in large-scale combined cycle projects that cater to large parts of the country. The social, environmental and financial problems related to constructing transmission lines are hard to overlook. Recent blackouts also originated from problems surrounding these lines. For this reason, Distributed Power, Local Generation such as cogeneration, will become increasingly stronger in the market. So, while it is difficult to assess what the size of the market is, the technology’s prospects provide ample room for growth in the energy sector. Currently, any project under 0.5MW is not regulated. This will change over time, as CFE will not be able to reach or cater to future industrial parks.  On-site distributed power production through microgrids is the ideal solution there. Cogeneration is a stable factor with excellent energy quality, which also allows industrial players to save a great deal on energy costs. Costs associated with blackouts are incredibly high. If we cannot boost the industry this way, it will negatively affect Mexico’s competitiveness.

 

Q: What is the role of technology in Seisa’s O&M approach?

A: This is important for Seisa. New technologies allow us to optimize and supervise performance in real time from a distance. We can even manipulate certain factors to enhance the project’s systems, making corrections on the go. What is more, the data generated facilitates preventative maintenance, detecting minute failures before they become a problem.  Industry 4.0 offers many opportunities to gather this data. Technology is a crucial factor in making cogeneration run as smoothly as possible and greatly boosts its viability.

 

Q: What are the main challenges Seisa faces regarding project financing?

A: Generation projects are always projects to be evaluated in the long term, investment returns can be between five and seven years depending on the technology. And every long-term project has its points of uncertainty. Many times, the industry does not like to take on long-term commercial commitments, but these types of projects deserve them.

For banks, regulatory uncertainty in the sector is a problem, as they consider that repayment source may be affected by regulatory changes. Therefore, we need to have a clear plan that offers guarantees for banks to want to join the process financing.

 

Q: After more than 25 years in the market, how are you innovating in the cogeneration segment and what challenges do you see emerging?

A: Due to the regulatory uncertainty in the market, we are working on reinventing ourselves, we are analyzing projects in a different way, previously projects were designed to satisfy 100 percent of thermal energy required by our client, this normally resulted in there were large surpluses of electrical energy that would be traded through the distribution networks to other customers. Now we design the projects to cover the electrical needs with the contribution of thermal energy that comes out of the process, so as not to have electrical surpluses.

We are also analyzing new thermal energies, since they are not regulated. Thermal energy through renewable sources such as solar and cooling processes also present an interesting opportunity.

Seisa Energía is a Mexican company with over 25 years of experience in the market, providing comprehensive energy and cogeneration services. It specializes in consulting, design, engineering, operations, maintenance and financing.

Cas Biekmann Cas Biekmann Journalist and Industry Analyst