The Prospects for Small Hydropower in Mexico

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1 The Prospects for Small Hydropower in Mexico Jorge M Huacuz Non-Conventional Energy Unit Electrical Research Institute Cuernavaca, Mexico

2 Who can produce electricity in Mexico? Export 2.2 CFE, the National Electric Utility for Public Service Independent Power Producers Small Power Producers Self-suppliers Co-generators Exporters The National Electric Utility Co-generation 4.7 Self supply 7.1% Independent Power Producers

3 Projections of RE capacity in the National Electrical System, MW Distributed Generation Self Supply Public Service Source: SENER, Prospectiva de Energías Renovables

4 Evolution of hydroelectric capacity in Mexico GW Construction of large hydroelectric power plants in the 100 MW range begins Hydro begins to lose ground MW Hydroelectric production in Mexico dates back to 1889, by means of micro-hydro installations Fuente Gráficos: Jacinto Viqueira, La Generación y Transmisión de Energía Eléctrica en México HYDROELECTRIC TOTAL CAPACITY

5 Hydropower in the Mexican Electrical System Fossil Fuels 73.9% Hydroelectric 21.9% Geothermal 1.8% Wind 0.8% Fossil Fuels 62.2% Hydroelectric 18.0%% Geothermal Wind Nuclear 2.5% Source: CFE POISE 2013

6 Additional capacity for Public Service, MW Wind Geothermal Large Hydro >30 MW Small Hydro <30MW Source: SENER, Prospectiva de Energías Renovables

7 Generating Capacity for Public Service (2010) ~12,125 MW Source: CFE, POISE

8 New Large Hydro Capacity to ,056 MW to be added Source: CFE, POISE

9 New Large Hydro Capacity to ,585 MW to be added Source: CFE, POISE

10 The legal framework for hydroelectricity in Mexico Production of hydroelectricity in Mexico is subject to both, electrical sector and water sector regulations The current legal framework includes: The Political Constitution of Mexico (Article 27) The Electrical Energy Law for Public Service (Reformed in 1992) The National Waters Law (Reformed in 2011) The Law for the Utilization of Renewable Energy and Financing of the Energy Transition (LAERFTE, Reformed in 2012) The Law for the Sustainable Utilization of Energy (2008) The General Climate Change Law (2012)

11 What the LAERFTE says Hydraulic Energy is considered to be renewable only when the installed power capacity is less than or equal to 30 MW Installations larger than 30 MW can be exempted from this limit when: The reservoir capacity is less than 50,000 cubic meters of water, or the reservoir surface area is less than one hectare and the water storage capacity is no greater than 50,000 cubic meters. Such reservoirs must be inside the premises legally possessed by the generator Already existing reservoirs, even of larger capacity, that are suitable for electricity generation When the power density of the reservoir, defined as the relationship between generation capacity and reservoir surface area, is larger than 10 Watts per square meter

12 Additional capacity for Self Supply, MW Wind Bioenergy Small Hydro <30 MW Source: SENER, Prospectiva de Energías Renovables

13 Additional renewable energy capacity for Distributed Generation, MW Solar CSP Geothermal Solar PV Wind Small Hydro <30 MW Bioenergy Source: SENER, Prospectiva de Energías Renovables

14 Small hydro projects re-classified Large diversity globally of class-type Small Hydro projects Classification used in Mexico as of 1994: Micro-hydro < 1 MW Mini-hydro 1 < MW < 5 Small-hydro 5 < MW < 30 New classification in Mexico, based on current project types Micro-hydro < 100 kw, regularly used for mechanical power in rural areas Mini-hydro 100 < kw < 1,000 usually developed for the production o mechanical or electrical power, in the standalone mode Small-hydro 1 < MW < 30 built for electricity self-supply in the grid-connected mode Source: Estimación del recurso para pequeña, mini y micro hidroenergía. Valdés Ingenieros, S.A. de C.V.

15 Small hydroelectric project identified by the national utility Projects of less than 20 MW Total number of projects: 68 Total estimated power: 733 MW

16 The return of Small Hydro Own construction with data from CRE:

17 Geographic distribution of the new small hydro capacity Own construction with data from CRE:

18 Distribution of new small hydro capacity by project type 12,89% 87,11% Self supply Small generator Own construction with data from CRE

19 Current status of new small hydro capacity projects 5,00% 6,52% 32,17% 56,31% Under construction Operational Idle Early works Own construction with data from CRE

20 Legal requirements for the implementation of small hydro projects Concession Title for the exploitation of national superficial waters Permit for construction on federal lands Permit for Electricity Self Supply or Small Power Producer Interconnection contract with the electric utility Transmission agreement with the electric utility Environmental Impact Assessment Federal, State and Municipal construction permits Permits for land-use change

21 Main local concerns around Small Hydro projects Absence of consultation process with local population Lack of clear plans for mitigation of environmental and social impacts Unfair compensation schemes for land owners Lack of communal participation in project implementation Absence of mechanisms for benefit-sharing with local communities

22 Current practices for successful project implementation Socializing the project among local communities: Frequent meetings and consultations with local stakeholders Broad diffusion of the project objectives and scope Clear communication of project impacts and potential benefits to the community Implementation of a communal benefit plan on a win-win basis: Contracting local people to carry out specific tasks according to their capacities Training local people ahead of time for operation and maintenance Collaborating with local authorities in the construction of socialoriented infrastructure (schools, medical dispensaries, water works, etc.) Building local elements of the supply chain Complying with all legal requirements for project development

23 Critical challenges ahead Developing a medium and long term National Plan for the deployment of small hydropower capacity Building Human Capital along the value chain of small hydropower technology Implementing an Industrial Roadmap for the development of a local small hydropower technology Upgrading the Institutional and Regulatory Framework for the expedient deployment of small hydropower Developing Financial Mechanisms to facilitate project development and construction Formally and fully assessing the National Potential of the small hydro resource

24 Thank you for your attention Electrical Research Institute (IIE) Cuernavaca, Mexico

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