Tamaulipas Plan and the electrification of transportation: Enel X's bet on Mexico

Energy supply and management company Enel X, a unit of Italy’s Grupo Enel, found a “virtuous circle” in renewable generation projects and the electrification of public transport, a link that has become its principal business line in Mexico.

In addition to working on the electrification of two of the most important bus systems in the country, the company could soon start plans to build a large wind farm and a battery storage plant in Tamaulipas state that would add up to 2GW of installed capacity to the network, double what the Sonora Plan currently offers.

Rafael Burgos Aguilar, CEO of Enel X México, talked about these and other matters with BNamericas during Latam Mobility, the most important electromobility event in the region being held October 10-11 in Mexico City.

BNamericas: On October 8, the Tamaulipas state government reported that the CEO of Enel, José Luis Navarro, and you presented a US$2.5bn project to the governor of Tamaulipas, Américo Villarreal.

Dubbed the Tamaulipas Plan, the state government said this ambitious project seeks to double the capacity of the 1GW Puerto Peñasco solar plant, part of the Sonora Plan, by “generating 2,000MW of renewable energy, 1,250MW in wind projects, 175MW in batteries, as well as extending the infrastructure in the transmission network, working hand in hand with federal power company CFE.” What can you tell us about it?

Burgos: The Tamaulipas Plan, as we presented it and it was presented directly by the CEO of Enel in Mexico, is very focused on wind projects given the level of resources that exist in the state. We built and are operating a 100MW plant called Salitrillos in the municipality of Reynosa and we know very well the type of resource that exists in the state. For this reason, we have continued developing different projects in the same state and we think that everything that has been wind generation systems can be developed even further in the long term, incentivizing systems – both the generation system and the transmission systems that are necessary to be able to use this type of technology.

BNamericas: What about the battery plant that was mentioned?

Burgos: We are including and studying the possibility of also supplying a battery or storage system as part of the generation systems. We still have to evaluate what the best option may be, but we are evaluating it and we can consider it because we as a company have installed storage systems for large-scale generation systems.

BNamericas: What is your construction and operation schedule?

Burgos: It is a medium to long-term plan, because these wind systems have a maturation time, from the development scheme to construction, operation and being able to directly transmit energy. We are seeing it in a medium to long-term period that can vary from three, four or five years, more or less.

BNamericas: Being announced by the state government itself, they must be happy that the governor, a close collaborator of President Andrés Manuel López Obrador, gave them the go-ahead.

Burgos: Exactly, I think he saw it quite favorably. Clearly he has identified the benefits that the state has, being one of the main energy states in all of Mexico. Because we are not just talking about wind resources, they have oil resources, for example, they generate most of the electric power with combined cycle systems, with natural gas.

But clearly he [governor Villarreal] has identified the benefits of the production of electric power with renewable sources, basically with wind projects, because he himself recognized that after Oaxaca, Tamaulipas can be the main state for renewable energy generation in Mexico, namely wind.

BNamericas: During your presentation at the event, you said that Enel X is one of the leaders in renewable energy in the country. Can you elaborate on that?

Burgos: We are one of the main energy generators with renewable sources in the country. We have an important installed base of both wind and solar projects in different states of the republic. We are currently operating in states such as Tamaulipas, Nuevo León, Coahuila, Tlaxcala, Guanajuato, etc. So, we are currently one of the main private generators of renewable energy in Mexico and one of the largest in the entire world.

BNamericas: At the same time, Enel X entered the market for the electrification of public transportation, a large part of electromobility. It’s not very common to see renewable companies that also compete in this segment. What makes you different?

Burgos: The Enel X division, which is part of the Enel group, is very focused on electrification systems. That is, how we can use electricity correctly and more efficiently, in this case, replacing different types of services that are normally satisfied with fossil fuels. Clearly, we have identified mobility as a main axis to be able to electrify the systems and to be able to use electrical energy that we ourselves could generate and supply, thinking that it would be 100% renewable, to create a system that we call “the virtuous circle of electrification.” That is, [an ecosystem] of electric vehicles and electric chargers that can supply electrical energy and that the sources used for these types of chargers and vehicle batteries are renewable sources.

That is why we see the electrification systems that we promote as successful. The transportation systems, the public transportation systems, in Mexico are very large and extensive. We think that in the future diesel or gasoline buses can be replaced with electric vehicles. We think that the sources that will power these chargers will be renewable sources. And we think that all this can be carried out 100% in parallel with care for the environment and sustainability.

BNamericas: Can you tell us about your electromobility portfolio in the state of Nuevo León? There, governor Samuel García launched a very ambitious agenda for capital Monterrey that involves three new subway lines and the electrification of some bus corridors, or BRTs, among other things.

Burgos: Directly speaking of Monterrey, we are participating with Metrorrey, which is the system that operates some metro lines in the city, but also operates the buses that are called BRTs. We participated in a public tender to be able to, jointly, supply the electric buses, the charging systems, the reinforcement systems that are needed for these charging systems and we are also supplying solar panel systems mainly for use in the same system. So, we’re going to operate 21 electric buses and the entire charging system and the entire monitoring system together with an operator for 15 years. In this case it was for the Exposición route and we plan to participate in other types of tenders directly with the state.

BNamericas: Are you referring to other tenders that also involve electrification, supply and operation?

Burgos: Exactly. In the end, we are responsible for the leasing as the owners of the buses. We also offer, for example, battery replacement, which is major maintenance. We are not bus manufacturers, but we reached an agreement with the Chinese manufacturer BYD, who met all the necessary technical specifications for this type of transport, and we’re going to directly supply the charging systems and remote monitoring systems.

In this way we can monitor the chargers, the batteries, and we can make the energy that will be used directly for the bus charging systems even more efficient.

BNamericas: What about Mexico City? Do you have contracts there?

Burgos: Yes, in Mexico City we are electrifying two Metrobús lines, which are also BRT systems that currently operate in the capital. In this case, we participated in a tender or in a long-term lease exclusively for the charging infrastructure for two lines, line 3 and line 4.

We’re going to exclusively operate the charging system, we’re going to supply the chargers, the monitoring system for 15 years to provide energy or supply energy to the buses that were acquired by the operators. In total, we are including 56 180kW chargers that total around 10MW of capacity that will be incorporated directly into the Metrobús system.

BNamericas: Any other projects you have in mind?

Burgos: We continue to pay attention directly to the Metrobús, and obviously Metrorrey, but we’re following up on the transportation systems in different states. We clearly see Mérida, capital of Yucatán, as an option, Hermosillo, Querétaro, Tamaulipas itself, so we’re following up on those types of projects in which we want to participate in similar systems.

BNamericas: What about the regulatory landscape in Mexico, especially in the renewable sector, where only a few generation permits have been granted by the energy regulatory commission [CRE] during this administration. In fact, there is almost no news of new permits for the wind sector despite the fact that there are many proposals on the table. Do your hopes at Enel X lie in the change of government?

Burgos: We know that there’s going to be a change of administration and the sector is very excited to see what happens. Yes, we remain attentive in all our permitting processes and in the current operation of our parks. In reality, we are looking to continue investing in these types of systems and we will continue to pay attention to what the energy regulatory commission says regarding the processes that can be followed.

We have some processes that are underway and that we think we can continue to manage correctly in the future. So, we do see a fairly encouraging outlook in the following months to be able to continue investing in this type of project. We will be attentive to what is published at a general level.

BNamericas: What is Enel X's vision for the next six years?

Burgos: We would like to continue investing in renewable generation projects in the future. We have installed around 3,000MW. We want to continue investing in this type of technology and we want to continue participating in everything that has to do with public electrification systems, but also luxury vehicles or private vehicles. So, we want to continue participating in this type of scheme in the future because we see that electrification has already reached us and we have to continue participating in all this.