POWER May 2010 - 72

POWER IN MEXICO
Intergen also operates a 1,100-MW gasfired
plant located close to Mexicali in
Baja California. About half of this energy
is supplied under a PPA to the CFE, while
the rest is supplied to the U.S. market. Carlos
Álvarez explains that Intergen's critical
mass along the border makes it possible
for his company to export to the U.S.: " We
own a transmission line which runs across
the border and connects the power which
we produce to the [U.S.] national grid. The
main difficulty is for us is to access this
very complicated but potentially vast market. "
The difficulty that he is referring to
relates to the extremely convoluted energy
tariffs, together with the need to extend
transmission lines. He also believes that
" There is potential to develop renewable
projects here which will be exported to the
Californian market. "
In addition to these three large players,
Mexico has two Japanese companies running
IPPs: Mitsui and Mitsubishi. Though
the Mexican market has seen considerable
consolidation over the past few years,
these Japanese companies have proven to
be resistant. Tetsu Nagame, vice president
of Mitsubishi Mexico, explains that Mexico
is an important market for his company
but that it has seen a reduction in projects
over the past few years.
Japanese influence can be explained by
the power of JBIC, the Japanese development
bank, which encourages operations
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The presence of
eminent global
power companies
is testament to the
successful evolution
of the sector.
overseas. Shigeru Watanabe of Hitachi
Mexico, believes that access to funding
provided by JBIC gives them an important
advantage over their rivals during the bidding
process.
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International Players Optimistic
Daniel Galicia-president and general director
of ABB for Mexico, Central America,
and the Caribbean-is a veteran of the
energy industry. He points to three main
growth areas: nuclear, renewables, and the
transmission network. ABB has a large
presence in Mexico, employing more than
800 people, and is one of the major suppliers
to the CFE. Galicia is firmly optimistic
about operations in Mexico: " We at ABB
have invested heavily in Mexico. The system
might be different to other countries,
but we have made money here and we will
continue to make money here. "
The presence of eminent global power
companies is testament to the successful
evolution of the sector and proof that,
despite heavy state involvement, there are
real possibilities for private ventures. As
Mexico's energy sector evolves, it will offer
more opportunities in a wide variety of
areas, and the government will be looking
to the private sector to help it realize its
ambitions. ■
-Written and researched by Clotilde
Bonetto (clotilde@gbreports.com) and
Mark Storry (mark@gbreports.com) of
Global Business Reports.
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POWER May 2010

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