PPt Llamas Itesm

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Dr. Armando Llamas

Center for Energy Studies

ITESM Campus [email protected]

Monterrey, NL april 2, 2004

Energy price competitiveness
mailto:[email protected]:[email protected]


2/13

CFE and LFC deliver public service.

Pemex own generation

Self supply: Societies created with the only purpose to generate and sell electricity

between the society partners.

Independent Power Producer: Private power plant over 30 MW generating

electricity exclusively to CFE or for exportation.

References: www.cfe.gob.mx, www.lfc.gob.mx, Prospectiva sector elctrico 2003-2012

Gross Cap

MW %CFE 36,971 74.4

LFC 834.3 1.7

Pemex 1,822 3.7

IPP 6,756 13.6

Selfsupply and/or

Cogeneration3,316 6.7

Total (%) 49,699 100.0

Installed Capacity Mexico 2003


3/13

Fuel oil

Natural gasCoal

Diessel

h = 39.7%

168,280 GWh

Reference: Tercer informe de labores - CFE

Technology '02 - '03Vapor (fuel oil or gas) 76,756

Dual 14,447

Coal 17,093

Combined cycle 24,679

Turbogas 6,421

Internal combustion 568

IPP 28,315Total Fossil 168,280

Hydro 19,389

Nuclear 9,340

Geothermal 5,728

Wind 6

Total non-fossil 34,463

Total 202,743Fossil generation/ Total 83.0%

Gross generation by technology (GWh)


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TECHNOLOGYGWh Cost

(million of pesos)

Unit cost($/kWh)

Vapor 78,803 48,762$ 0.62$

CC 22,217 13,820$ 0.62$

Turbo Gas 6,013 2,882$ 0.48$Diesel 555 811$ 1.46$

Coal 30,030 7,527$ 0.25$Geothermal 5,396 2,002$ 0.37$

WInd 7 7$ 1.00$Nuclear 9,747 7,934$ 0.81$

Hydro 24,277 12,441$ 0.51$Geothermal Projects division 881$

Civil engineering studies division 663$Generation subdivision 741$

177,045.00 98,471$ 0.56$

Independent Power Producers 22,657.00 7,452$ 0.33$

TOTAL 199,702.00 105,923$ 0.53$

Generation cost by technology 2002

Reference: www.informacionpublica.gob.mx


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Ref: www.cfe.gob.mx

High Voltage (HS) energy price in Northeast Mexico

(Dec 2003 dollars)

$0.00

$0.02

$0.04

$0.06

$0.08

$0.10

$0.12

$0.14

$0.16

$0.18

$0.20

Dic-01

Ene-

02

Feb-

02

Mar-

02

Abr-02

May-0

2

Jun-

02

Jul-02

Ago-

02

Sep-

02

Oct-

02

Nov-

02

Dic-02

Ene-

03

Feb-

03

Mar-

03

Abr-03

May-0

3

Jun-

03

Jul-03

Ago-

03

Sep-

03

Oct-

03

Nov-

03

Dic-03

Ene-

04

Feb-

04

USD/kWh

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

USD/kW

$/kW $/kWh peak $/kWh inter $/kWh base

4.07 $/kW

5.17 $/kW


7/13

Ref: www.cfe.gob.mx

High voltage (HS) NE Nominal Pesos / kWh

0.40

0.45

0.50

0.55

0.60

0.65

0.70

0.75

0.80

Ene-00

Abr-00

Jul-00

Oct-00

Ene-01

Abr-01

Jul-01

Oct-01

Ene-02

Abr-02

Jul-02

Oct-02

Ene-03

Abr-03

Jul-03

Oct-03

Ene-04

pesos/kW

h

Load factor = 0.6


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Self supply

Partner 1 has purchased capacity propperly selected and reasonable wheeling cost

0.60

0.80

1.00

1.20

May-03

Jun-03

Jul-03

Ago-03

Sep-03

Oct-03

Nov-03

Dic-03

Ene-04

Feb-04

$/kWh

Partner 1 CFEPartner 1 Self supplyPartner 2 CFEPartner 2 Self supply


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Disadvantages of self supply

No flexiblilty. Contracts are signed for 15 years and they are not easy tomodify.

Wheeling in medium voltage is extremely expensive. In some cases the

wheeling fix charge is several times more expensive than the one of

high voltage.

Non-written obligation to sign with CFEs union in case wheeling isrequired.

Natural gas

0

2

4

6

8

10

1997 1998 1999 2000 2001 2002 2003 2004

dollars/MBtu


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Natural gas consumption (Mft3/day)

Total = 4854 Mft3/day

M = 106

Ref: Prospectiva

del mercado de

gas natural 2003 -

2012.

Cuadro 9. p.42

Transport 2 Mft3/day

Oil indus try 1994 Mft3/day

Pemex Petrochemistry 295

Mft3/dayPrivate sector 965 Mft3/day

Public electric sector 959

Mft3/day

Private electric sector 546Mft3/day

Residential 71 Mft3/dayServices 22 Mft3/day


11/13

Ref: North America The Energy Picture

T = 1012

Production/Demand of Natural gas (Tft3)

1980 19902000 2010

0

5

10

15

20

25

30

Canada Mxico USA Canada Mxico USA Canada Mxico USA Canada Mxico USA


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El Norte, Negocios, 23 marzo 2004

El Norte, Negocios, 26 marzo 2004


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Problems - Solutions

Energy prices are not competitive. Mexican

companies have no choice in the selection of the

energy supplier. Answer: A well regualtedcompetitive market (Lester Lave) with quick

response capability to changes and mistakes.

The growth of the electric sector (public and

private) is mainly based in combined cycle plants.Answer:Diversification (Oliver Probst).

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