ESCO and Biogas in Mexico

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  • ESCO and Biogas in Mexico

    1. 1. Project
ProposalDevelopment
of
the
ESCO
and
Biogas
Market
 in
Mexico
    2. 2. Today’s
Facts •30%
GHG
emissions
reduc/on
 commitment
by
Mexico1 •Great
poten/al
to
implement
Energy
 Efficiency
and
Cogenera/on
Projects •Investments
in
Clean
Energy
have
not
 been
deployed
at
the
necessary
pace 1:
unfccc.int/files/
mee1ngs/applica1on/pdf/mexicocphaccord_app2.pdf.

    3. 3. Today’s
Facts •Industrial
and
Municipal
wastes
 remain
untreated: •Vinasse
in
the
Sugar
and
Tequila
 Industry1 •Landfill
energy
poten/al
poorly
 exploited •CFE
capacity
is
being
overwhelmed
 in
some
industrial
areas 1: http://www.jalisco.gob.mx/wps/portal/!ut/p/ c0/04_SB8K8xLLM9MSSzPy8xBz9CP0os3ifEB8PY68gIwN3Z0tXAyM3M2MDdwNnAwN_I_2CbEdFAOM2uBw!/? PC_7_LTLH3JR208OG602FL0IEL500G3_WCM_CONTEXT=/wps/wcm/connect/PortalJalisco2009/contenidos/gobierno+del+estado+jalisco/ pj_pccomunicacionsocial/pj_asnoticias/pj_cont+el+gobernador+del+estado+inauguro+la+planta+de+tratamiento+de+casa+herradura
    4. 4. The
Economic
Risk
of
Climate
Change1%
World
GDP
=
USD
702
Billion
per
annum USD
70.2
Trillion 20%
World
GDP
=
USD
14
Trillion
per
annum USD
70,210,000,000,000 Cost
of
 Climate
 Cost
of
“Doing
 AdaptaGon Nothing” World
GDP
2009 Source: Stern Report 2006
    5. 5. The
Economic
Risk
of
Climate
Change2%
World
GDP
=
USD
1.4
Trillion
per
annum USD
70.2
Trillion 20%
World
GDP
=
USD
14
Trillion
per
annum USD
70,210,000,000,000 Cost
of
 Climate
 Cost
of
“Doing
 AdaptaGon Nothing” World
GDP
2009 Source: Stern Report 2008
    6. 6. The
Opportunity •Energy
Efficiency •Cofiring
Biomassh"ps://www.mckinseyquarterly.com/A_cost_curve_for_greenhouse_gas_reduc=on_1911
    7. 7. Some
definiGonsEnergy
Efficiency Use
of
less
energy
to
provide
the
same
level
of
 energy
service1ESCO
(Energy
Services
Company) •A
company
that
provides
energy
efficiency‐related
 and
other
value‐added
services
 •Performance
contracGng
is
a
core
part
of
its
 energy
efficiency
services
business2Performance
ContracGng A
means
of
raising
money
for
investments
in
Energy
 Efficiency
that
is
based
on
projected
savings3 1:”Energy
Efficiency”.
Wikipedia
en.wikipedia.org/wiki/Energy_efficiency 2:
“Powering
Up:
The
Investment
Poten=al
of
Energy
Service
Companies
in
India”.

h"p://www.wri.org/publica=on/powering‐up 3:
Interna=onal
Ins=tute
for
Sustainable
Development.
h"p://www.iisd.org/business/tools/bt_pc.asp
    8. 8. The
Opportunity USD per
annum ‐50% 
170
billion
 =Energy
Demand
 Growth1 Mexico’s
 USD 
900
billion > in
Savings 1 GDP 17%
IRR1h"ps://www.mckinseyquarterly.com/A_cost_curve_for_greenhouse_gas_reduc=on_1911 1:
Source:
“How
the
World
should
invest
in
Energy
Efficiency”.
McKinsey
&
Company IRR:
Internal
Rate
of
Return
    9. 9. The
Opportunity in
Mexico Cost
of
aba1ng
a
unit
of
 ‐35% energy
in
developing
 countries1 USD 
3
billion per
annum Business
 Opportunity2 280
TWh Savings
by
20243h"ps://www.mckinseyquarterly.com/A_cost_curve_for_greenhouse_gas_reduc=on_1911 1:
Source:
“How
the
World
should
invest
in
Energy
Efficiency”.
McKinsey
&
Company 2:
Source:
Enersave

Consul=ng.
www.enersave‐is.com 3:
Source:
Programa
Nacional
para
el
Aprovechamiento
de
Energía
Sustentable,
2009
    10. 10. What
has
been
done
so
far? •Sustainable
LighGng
 Programme •“Change
your
refrigerator”
 Programme
    11. 11. What
has
been
done
so
far?
(Examples)Replacement
of
LighGng
Systems
in
Pabellón
Bosques
 MXP
 433,217 investment 57% Savings
on
ligh1ng
costs 22
months Payback
1me
    12. 12. Why?“Low‐Hanging
Fruit”
    13. 13. “Low‐Hanging
Fruit” Why? •Most
cost‐effecGve
soluGon
to
 reduce
emissions •Quick
Payback •“Easier”
to
implement •RelaGvely
simple
soluGons
    14. 14. AutomoGve
Fleet
Efficiency?
    15. 15. AutomoGve
Fleet
Efficiency? :
NOT
FEASIBLETechnological
CostRegulatory
FrameworkFinancing Source:
“Programa
Nacional
de
Aprovechamiento
Sustentable
de
Energía”
    16. 16. CogeneraGon
in
Mexico?
    17. 17. What
is
CogeneraGon
and
Biogas?CogeneraGon The
producGon
of
heat
and/or
power
from
 the
waste
energy
of
an
industrial
processBiogas Gas
produced
by
the
biological
breakdown
 of
organic
maler
in
the
absence
of
oxygen Source:
en.wikipedia.org/wiki/Cogenera=on Source:
en.wikipedia.org/wiki/Biogas

    18. 18. CogeneraGon
in
Mexico?:
POSITIVE
RETURN11,000
MWCogenera1on
Poten1al70% Yet
to
be
exploited3,000
MWBiogas
Cogenera1on
 Poten1alCost‐effecGve Source:
“Programa
Nacional
de
Aprovechamiento
Sustentable
de
Energía”
    19. 19. What
has
been
done
so
far?
(Example)Biogas
CogeneraGon
Facility Early
Adopter USD
 873,900 investment Savings
on
electricity
 30% costs Facility’s
installed
 1
MW capacity
    20. 20. How
do
we
replicate?
    21. 21. How
do
we
replicate?Make
the
Performance
ContracGng
Model
mainstreamCreate
a
financial
instrument
to
enable
SMEs
to
implement
Energy
 Efficiency
and
CogeneraGon
ProjectsCurrent
SituaGon •Very
limited
funding
capability ESCO •Each
ESCO
is
an
“island” P1 P2 P3 •Difficulty
to
access
financing
 from
a
banking
insGtuGon
    22. 22. How
do
we
replicate?Make
the
Performance
ContracGng
Model
mainstream Development
Banks Impact
Investors Banking
InsGtuGons $ $ $ Financial
Instrument ESCO
1 ESCO
2 ESCO
3 ESCO
4 P1 P2 P3 P1 P2 P3 P1 P2 P3 P1 P2 P3
    23. 23. Challenges
    24. 24. Challenges •InformaGon •Technical
ExperGse •Capital
Flow
    25. 25. Next
Steps Proof
of
•Market
Approach > Concept•Bolom‐Up
CommunicaGon•Develop
Funding
Schemes•Develop
Technical
ExperGse
    26. 26. Steps
accomplished
so
far: Alliance
with: •5
months
internship
by
an
InWEnt/GIZ
ILT
parGcipant•To
develop
technical
experGse
and
support
quickly
in
Mexico•To
establish
a
company
that
serves
as
Proof‐of‐Concept
    27. 27. “If
you
build
it ,
they
will
come”
    28. 28. Thank
You Rodrigo
Arévalo Deutsche
GesellschaU
für
 Interna/onale
Zusammenarbeit Proméxico
Germany arevalo.ro@gmail.com +49(0)176
3244
3279

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