By Adina Moloman
The CEO of InterGen in Mexico, David Fatzinger, and the Baja California Governor, Francisco ‘Kiko’ Vega de Lamadrid, signed an agreement on February 20, 2014 to lower the energy cost especially for the industrial sector manufacturing in Mexico.
InterGen is one of the top three private electricity producers in Mexico, with a production capacity of 2,360 MW. Through its five plants in Baja California, Chihuahua, Campeche, Guanajuato, generates electricity for the CFE; exports to U.S. and for the Mexican industrial sector.
Lowering Baja California energy production costs will eventually help creating new jobs, diminish Baja California, Mexico manufacturing costs and eroding China’s cost advantage in many industries that are still keeping the production base in China.
Baja California depends on natural gas for more than a half of its electricity consumption, and this reliance is even greater for the industrial sector.
InterGen, the Massachusetts-based power producer, with its Central La Rosita electricity generator based near Mexicali, Mexico, has a capacity of 1,100 megawatts. For a better appreciation, one megawatt is enough for approximately 800 residential homes. From May to October, 80 megawatts will be used during the “peak” hour by 60 manufacturing plants located in the region.
Lowering the energy price mean that energy-intensive industries located in Mexicali or Tijuana such as chemicals and plastics are able to boost their profit margins or pass those savings on to customers through lower product prices.
Close to 80% of energy consumed in Mexico is produced from fossil fuels. Close to 15% of electricity is generated from renewable sources. Given the limited nature of fossil fuels, Mexico’s best interest is to support the energy transition in order to contribute to its development in coming years.
Baja California Government has also review its approach to green and growth policies in order to effectively reduce their energy costs whilst, at the same time, is meeting the climate change obligations.