M E X I C O REPORT UNDER VOLUNTARY PLEDGE AND REVIEW PROGRAM 20 th Energy Working Group Meeting Cuzco, Peru October 19-20, 2000 Introduction

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1 M E X I C O REPORT UNDER VOLUNTARY PLEDGE AND REVIEW PROGRAM 20 th Energy Working Group Meeting Cuzco, Peru October 19-20, 2000 Introduction The effort Mexico has made to improve energy efficiency for the last ten years, has allowed the country to achieve significant results. This document summarizes the activities and programs developed in Mexico to improve energy efficiency both in the supply and demand of energy. The strategies undertaken are closely linked with related policies to achieve national priorities on non-renewable energy resources conservation; modernization of productive sector; and environmental protection. Activities and programs to improve energy efficiency in the use of energy Daylight Savings Time Daylight Savings Time (DST) was first introduced in This measure allows reducing the demand of electricity at the hours that cost most to generate electricity (peak hours). Moreover, this measure permits the reduction in the use of fossil fuels for electricity generation, thus reducing emissions. DST throughout five years of application has generated electricity savings of approximately 5300 GWh, equivalent to the use of 10 million oil barrels. Furthermore, projected avoided power capacity for 2000 is around 642 MW (Table 1 exhibits annual electricity savings since 1996). Table 1. Energy savings from DST Avoided Energy Savings for residential Differed investme Year demand savings users nt MW GWh (Million (Million pesos) pesos) a/ , , , , , , , b/ 642 1, ,420 Total ,297 2,630 6,420 Source: CONAE based on data provided by FIDE. a/ Refers exclusively to infrastructure investment differed by DST. b/ Estimated by considering demand growth projected by CFE. Energy Efficiency Standards During 2000, and in conformity with the 2000 Standardization Program, three NOMs 1 were updated and three new NOMs started their process of approval. These three new NOMs refer to 1 Mexican Official Standards for Energy Efficiency

2 energy efficiency for non-residential buildings, commercial refrigeration as well as room air conditioners and will enter into force on Currently 18 NOMs are in force, of which 14 are related to electricity consumption and 4 related to thermal energy consumption. Expected annual savings derived from the application of these NOMs will result by the end of the year in 7,500 GWh annual energy-consumption savings and 1000 MW in avoided power capacity (Table 2). Table 2. Annual energy savings of NOMs (GWh) Energy efficiency NOMs in Force GWh MW GWh MW NOM-073-SCFI-1994 Room air conditioners NOM-001-ENER-1995 Vertical pumps NOM-002-ENER-1995 Boilers NOM-003-ENER-1995 Water heaters NOM-004-ENER-1995 Centrifuge pumps NOM-005-ENER-1996 Clothe washers NOM-006-ENER-1995 Pumping 2, systems NOM-007-ENER-1995 Building lighting NOM-009-ENER-1995 Thermal insulation NOM-010-ENER-1996 Submergible pumps NOM-011-ENER-1996 Central air conditioners NOM-012-ENER-1996 Low capacity boilers NOM-013-ENER-1996 Street lighting NOM-014-ENER-1997 One-phase motors NOM-015-ENER-1997 Refrigerators 1, , NOM-016-ENER-1997 Three-phase , motors NOM-017-ENER-1997 CFLs NOM-018-ENER-1997 Thermal Building insulation TOTAL 6, ,504 1,001 Source: CONAE, Direction of Standards. Internal documents Based upon benefit-cost analyses elaborated by law before introducing the NOM Also, activities are being developed to establish system verification units and laboratory accreditation. By mid 2000, 379 verification units were established and 43 accreditation certificates were granted to 33 laboratories for equipment NOMs. 2

3 Incentives and market-transformation programs The incentives and market transformation program was put into operation by FIDE in 1996.The Program s main objective is to reduce electricity demand by providing money incentives to industrial, commercial and residential energy users in the purchase and installation of high-efficiency equipment. Also, FIDE implemented a program addressed to the productive sector, which started operating since FIDE expects to provide incentives to purchasers of 155,451 high-efficiency electric motors, 5,758 compressors and 3.25 million of CFLs in a five-year period. In 1999, FIDE s incentive programs fostered savings of 554 GWh of electricity consumption and 152 MW of avoided power capacity. Similarly, for year 2000 it is expected to obtain energy savings of 700 GWh and 163 MW of avoided capacity. Installation-oriented programs CONAE provides technical assistance through its Webpage to help energy users identify energy efficiency opportunities, as well as to evaluate and analyze technical and economic feasibility of energy efficiency projects for industrial, commercial and service installations. For energy users who do not have the wherewithal to access Internet-based analysis methodologies, CONAE established a National network of ports of attention (PACs). These ports of attention are mainly located in industry chambers, universities and research institutions. In the course of 2000, CONAE established 32 new PACs, which complement a network of 56 PACs in 12 Mexican states. Currently 69 more new PACs are in process of installation. Residential sector Programs to improve energy efficiency in the residential sector comprise three main action guidelines: energy efficiency standards for appliances 2, energy conservation programs and information dissemination to promote energy efficiency. Actions undertaken by FIDE and FIPATERM 3 resulted in annual savings of more than 140 GWh. In particular, FIDE has helped replace 3.2 million light bulbs for CFLs in 134 cities of 22 states. By 2000 FIPATERM has enhanced its activities providing also financial opportunities for door and window isolation, air conditioner substitution as well as CFLs purchasing. Therefore, this program comprises four sub-programs. Each of them has achieved important savings in the residential sector: 2 The activities developed by CONAE in terms of energy efficiency standards and their benefit for the general public are described in the chapter of NOMs 3 FIPATERM, a program managed by the Federal Electricity Commission, has as its main objective, to foster a massive installation of thermal insulating material in households with high electricity consumption in the northwest. 3

4 Thermal isolation program: has allowed isolating a total of 59,426 households with savings of 31.6 GWh annually and 22 MW of avoided capacity. Substitution of air conditioner equipment for high-efficiency equipment: resulted in annual savings of 65.2 GWh and 65MW of avoided capacity. Substitution of standard light bulbs for CFLs: has allowed a substitution of 500,000 light bulbs resulting in annual savings of 2.6 GWh and 31MW of avoided capacity. Door sealing: Generated savings of 43.8 GWh and 3 MW of avoided capacity. Energy Efficiency in Federal Government Buildings The first stage of the Energy Efficiency Program for Buildings of the Federal Government (PAEIAPF) concluded in Savings on energy consumption in that year accrued 27.5 GWh, equivalent to 2 million dollars. During 2000, 73 additional buildings have been included into the PAEIAPF, accounting for 270,000 square meters of inner surface. Also, the program permitted reductions of 10.5% on energy consumption for the period Presently, the PAEIAPF incorporates 403 buildings corresponding to 2.33 millions of square meters of inner surface. Industry The strategy developed by CONAE to improve energy efficiency in the industrial sector has been mainly oriented to identify energy-efficiency and conservation opportunities in the major energy-intensive industrial processes. These activities have been strengthened by six analysis methodologies 5 designed by CONAE and available in its Website: Steam generation and distribution Cooling towers Demand control Cogeneration Process heaters Industrial refrigeration By mid 2000, CONAE help identified energy efficiency opportunities in six large industrial corporations of more than 133 million m³ of natural gas and 30 GWh (Table 3). 4 Compared in a month-by-month basis. 5 These methodologies are part of the overall technical assistance strategy developed by CONAE through Internet. 4

5 Table 3. CONAE s technical assistance on large-energy users Corporation Energy saving potential Systems and Natural Gas Electricity equipment m analyzed / year MWh / (000) year Grupo Vitro Melting furnace Cooling tower Corporativo Celanese Cooling tower ,000 Corporativo Resistol Cooling tower Steam generation 133, Consorcio Industrias Resistol Cooling tower Steam generation 156 2,040 Corporativo Matex Steam generation Quest International Cooling tower Other Steam generation 50 Source: Internal report of the Direction for Energy Sector, CONAE These activities also include on-line technical assistance, consultation groups, promotion and training events. Municipal services The strategy aimed at supporting energy efficiency projects in municipalities has been an important part of the Integral Program on Municipal Energy Efficiency developed by CONAE since This program attempts to address all issues related to energy consumption and conservation in municipalities, having two principal areas of opportunity: streets lighting and water pumping. In this sense, during 2000 CONAE developed studies concerning the lighting systems of 20 municipalities pertaining to 4 states. These studies allowed identify an annual energy conservation potential of more than 12.3 million kwh for these systems. State-Owned Energy Industry CONAE has collaborated for more than 10 years with the State-owned Oil Company (PEMEX), and the two main public utilities, the Federal Electricity Commission (CFE) and Central Light and Power Company (CLyFC). On July 1999, the Director General of PEMEX announced the Institutional Campaign of Energy Conservation and Environmental Protection with the goal of reducing energy consumption by 5% in all its installations and working stations. Since then CONAE has helped in the analysis of 32 major installations, resulting in energy saving potentials of 2,838 MWh/month of electricity consumption, 26 million m³ of natural gas per year and 250,000 m³ of water. Throughout 2000, CONAE provided technical assistance to PEMEX, particularly, developing methodologies to identify savings in water-cooling systems, direct-fired heaters as well as steam generation and distribution systems (Table 4). 5

6 Table 4. Technical assistance developed in installations of PEMEX (2000) Methodology Savings Potential Steam generation and distribution 2.7 MM m3/year of natural gas 60,000 m3/month of gas 650 m3/month of water reposition Direct Fired Heaters 2.6 MM m3/ year of natural gas, 4.9 MMBtu/h (equivalent to 46 MMPC of gas per year). Water-cooling Systems 23,600 MW/h per year Due to recommendations made by CONAE, PEMEX, has achieved significant energy savings in 2000 (Table 5). Table 5. Achieved Benefits in PEMEX in 2000 Technology Energy Savings Water Cooling Systems 43,000 MWh/year 12 million cubic meters of water per year Direct Fired Heaters 12 MM m3 /year of natural gas equivalent to 422 MM ft3 / year of natural gas. Starting the year, CONAE intensified the technical assistance that provides to CFE. Computer methodologies were applied to diverse installations with the following potentials detected (Table 6). Table 6. Detected Savings Potentials in CFE for Electricity Systems Installation / System Fuel Savings (Tjoules / Year) Potential Electricity Savings (kwh / year) Lighting 2.8 Thermoelectric plants Electricity systems 600,000 Water cooling systems 15,000,000 Activities and programs to improve energy efficiency in the supply of energy Cogeneration Cogeneration allows the generation of both electricity and thermal energy from the same primary energy source. The National cogeneration potential, identified by CONAE in 1995, is of 7,500 up to 14,000 MW, depending on the process employed. This potential is distributed among the industrial sector (70%), the PEMEX s petrochemical branch (20%) and the Commercial Sector (10%). 6

7 Cogeneration is permitted in Mexico since However, generating industries must comply with the regulation established for public utilities and sold their electricity surplus at fixed prices set by applicable laws. For the last three years, CONAE jointly with the Ministry of Energy, has performed seminars in different parts of the country in order to instruct interested parties on the design and operational rules for this kind of projects. CONAE provided technical assistance either in-situ or on-line to important public and private organizations, such as the national power utility (CFE), universities, sugar mills and shipping companies in order to promote the installation of cogeneration systems. By mid 2000, the Energy Regulatory Commission (CRE) had granted 36 permits to private industrial enterprises from diverse industrial sectors with an installed capacity near 1,820 MW, and potential annual generation of 10,116 GWh. Table 7 shows the prospective for cogeneration systems. It is expected that by the end of 2001, the country have 1100 MW installed, with a generation capacity of around 5,780 GWh. It is important to observe that these estimations do not consider the Proposal of Reforms to the Electric Sector, which will encourage a greater development and growth of cogeneration systems in the country. Table 7 Prospective of participation to CFE by Cogeneration Systems SECTOR MW GWh MW GWh Industrial and commercial , ,499 PEMEX s Petrochemical branch , ,979 Oil Sector Total , ,778 Source: CONAE, Direction of Cogeneration. Estimations based on information concerning cogeneration permits granted by CRE as well as figures of the evolution of natural gas consumption in the country Renewable Energy In 1999, 35,000 sq. meters of flat plate solar collectors were installed in the country. Beginning 2000, the national total surface installed of this type of systems was of 345,000 sq. meters. Currently, CONAE is developing a standard for flat-plate solar collectors, intended not only to secure their optimal performance but also to secure their quality. On the other hand, since ,000 photovoltaic systems have been installed in the country to provide electricity to isolated communities, which do not have the capability of connection to the electric network. By the end of 1999, installed capacity for those systems accrued MW with 0.9 MW installed in Also, CFE operates two eolic plants with capacity of 1.5 MW and 600 kw respectively. The CRE has granted permits to 5 private firms to install 148 MW of those energy systems. 7

8 Table 8 Prospective of participation to CFE by Renewable Energy Energetic Source MW GWh MW GWh Biomass Water Sun/ photovoltaic Biogas Wind Total Source: CONAE and National Society of Solar Energy (ANES). Information on all the programs described above can be found through CONAE s website at: 8