​Mexico cogeneration plants sold to London-based power company

Image: Alpek

One of Mexico’s largest petrochemical companies has finalized the sale of two cogeneration plants to a London-based company that specializes in the power sector worldwide.

CountourGlobal Power Holdings S.A. announced the finalization of the purchase from Alpek, S.A.B. de C.V. on Thursday.

No purchase price was announced for the plants, which are located in the Gulf of Mexico coastal state of Veracruz and in the nearby state of Tamaulipas. They generate 95 MW and 350 MW, respectively.

The recent end of the monopoly of the state-owned Federal Electricity Commission (CFE) has opened up the power market to private sector operators.

Although there’s less than 4,000 MW of cogeneration now in Mexico out of total generation of more than 60,000 MW, application of the technology is expected to double by 2030.

The cogeneration process simultaneously produces electricity and thermal power from a single fuel source, such as natural gas, using the heat that would otherwise be lost. That improves the thermal efficiency, as well as reducing greenhouse gas emissions.

According to a study by Mexico’s Natural Commission for Energy Conservation, there is a potential for as much as 15,500 MW of cogeneration in the country, especially in highly industrialized areas such as petrochemical centre Veracruz and near the city of Monterrey, long an industrial powerhouse.

Because cogen is considered a renewable form of power, CFE views it as a priority source of generation when it signs power purchase agreements.

Studies have concluded that cogeneration could be applied across a wide array of industries, including petrochemicals, petroleum refining, pulp and paper and sugar mills. Former oil and gas monopoly Petroleos Mexicanos (Pemex) has indicated it could develop as much as 10,000 MW of cogen from its own facilities. Its existing installed cogen capacity is about 2000 MW.

Pemex has already embarked on some joint cogen projects with CFE.

Another major opportunity for cogen is in the sugar industry, where the potential is to produce almost 1,000 MW from waste pulp, replacing fuel oil.

Spanish-based conglomerate Abengoa S.A. owns Mexico’s largest cogen plant, a 924 MW facility in the Pacific coast industrial city of Ciudad Juarez. It was developed in 2015-2016 as a result of a US$1.55 billion contract with CFE. Abengoa and Italy’s Enel also recently completed the development of a 517 MW cogen plant for Pemex, at its Salina Cruz refinery, located in the southern state of Oaxaca. The partners invested US$950 million in that facility.

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