Mexico
Q&A

The clean energy plans of Mexico's Industrias Peñoles

Bnamericas
The clean energy plans of Mexico's Industrias Peñoles

Mexican mining-metallurgical group Industrias Peñoles, which has integrated operations for the extraction, smelting and refining of non-ferrous metals, as well as production of chemical products, is pushing into the clean energy generation sphere.

Peñoles' mining activities are carried out through its 75%-owned subsidiary Fresnillo plc and its wholly owned subsidiary Minas Peñoles, with several mines in Mexico and exploration projects at home and in Peru and Chile.

The López Obrador administration, which started in 2018, has focused on fossil fuels to help national oil company Pemex and public utility CFE, freezing the granting of permits for private clean energy projects.

In this interview, Industrias Peñoles' energy head Leopoldo Rodríguez tells BNamericas about the company's plans, what the industry expects from the new government of Claudia Sheinbaum that takes over October 1 and which aspects remain uncertain.

BNamericas: Which renewable energy projects does Industrias Peñoles have underway in Mexico?

Rodríguez: We have three wind farms in operation that supply us: Fuerza Eólica del Istmo in Oaxaca with 80MW, Eólico Coahuila near Saltillo with 200MW and Mesa La Paz in Tamaulipas with 306MW.

BNamericas: When was the most recent one implemented?

Rodríguez: In 2017, the one in Tamaulipas, Mesa La Paz.

BNamericas: Have new renewable energy projects been delayed in the last six years due to difficulties in obtaining permits?

Rodríguez: Yes. It's not possible to undertake new projects at this time. We believe that the government is in favor of developing isolated supply projects and we are indeed developing new projects under that concept.

Isolated supply means that you can generate for your own consumption, limited to what you consume in your load center, your operation, but surpluses cannot be injected into the grid.

BNamericas: Without selling to third parties?

Rodríguez: Exactly.

BNamericas: Do you think that with the upcoming change in government, there could be greater flexibility in the granting of permits and the development of renewable energy projects?

Rodríguez: Well, that's a big unknown. I mean, for that type of isolated supply schemes, we think so. But for something bigger, it's yet to be defined.

BNamericas: And what is your perception regarding the future of renewable energy projects? Is there optimism about more favorable changes for these investments in order to meet sustainable development goals?

Rodríguez: The government is interested in doing it. The speed with which it is done, the prices at which it is achieved and how one can collaborate with the government or allow private companies to do it, that is yet to be defined. 

In other words, I think there is optimism, but there's no definition of anything concrete.

BNamericas: How many new isolated generation projects are you developing and where?

Rodríguez: Well, that's confidential information. I can say that we're exploring at least three or four projects along those lines.

BNamericas: Why is it confidential information if the projects are for self-sufficiency?

Rodríguez: Because, for the same reason, as there are issues of authorizations and so on. We don't want to generate expectations about things that are not even there yet.

BNamericas: How much could these projects add in terms of cleaner energy capacity and what type of generation would it be, solar or wind?

Rodríguez: A combination. We have a lot of wind power, we're interested in diversifying with solar, with storage and we will surely require some thermal complement.

Initially, it will be with natural gas. We think that eventually it could evolve toward biomethane or green hydrogen ideally. I can tell you that.

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