12/24/2014

Renewable Project


This report is for my friends Lars and Francis.

The problem: 
We consume ~ 21 GWh per year and want to switch over to 100% renewable energy.

The first steps:

We already had preliminary meetings with two renewable electricity companies.

Interestingly, one is a "pure play" solar and the other is an almost "pure play" wind.

This is the solar one:

http://mepmx.com/

This is the wind one:

http://kalosenergy.com/

In essence, both offer the same thing:

1. No upfront investment.
2. We are required to sign a multi-year supply contract.
3. Our electricity cost will be 10 to 15% lower versus the regular utility.
4. We will not physically be connected to either their solar panels or wind turbines but the respective energy we consume will be virtually assigned from the renewable production. In other words, there will be no change in our connections to the current electricity company.
5. Even if a catastrophe wiped out the wind or solar farm, physically nothing would happen to our supply (although the price would increase to the original level).
6. Some of our buildings might require smart meters but they also cover this investment.
7. We will be able to claim some (although not all) the CO2 credits. These credits will be split between the producer and the consumer. The exact split should be published by the government early next year.

These are the generation costs that the second company shared with us:

a. Natural gas combined cycle plant: 2 to 4 cents (US).
b. Wind: 4 to 7 cents.
c. Solar PV: 9 to 10 cents.

That is why they in particular won't do a large solar project unless there is no other option.

The delivery time for their respective project is 12 to 24 months (the solar company is somewhat faster).

If you ask me (this is not the way they explained it), any of these renewable propositions is a win-win-lose situation.

The generating companies above make money (even though they cannot compete with natural gas, see above, they have other "green" incentives); we (the large consumer) make money (since we will be paying less for the electricity); the loser is the state electricity company that will have to manage all this intermittent power and whose operating cost will probably increase.

Then, why is the state electricity company game in these type of projects? The answer seems to be that the Mexican government has pledged to a 30% renewable capacity goal by 2024 (the country is currently at 20%). So, in a way, it is also a win for the country and the state utility: meet the internationally committed renewable objectives.

Status:
As of today we have met with executives from both supplier companies. With the first one we have already signed the respective NDAs and the next step is for our lawyers to review the contract. Simultaneously we'll share with them our electricity bills from all our buildings so they can prepare a specific proposal. The same steps will be followed with the second company.

Surprise:
The only real surprise for me was the stated annual capacity factor of their wind turbines (second company): 38%. These are NOT offshore turbines; actually they are less than 100 kilometers from my office. Also, this is not a sales pitch because, again, we are not buying the turbines, only energy at a guaranteed discount. 

Another plus of this project for us, if it is finally approved and implemented, is that we'll request part of the electricity savings channeled for employee motivation. ;)

Friends, I'll keep you posted. Once we have all the information my lobbying with the CEO of our company will continue. 


1 comment:

Francis said...

Just a quick thought to add: Even a big utility might offer a comparable deal, because they use high voltage lines to connect you to the grid... losses ± 15 / 25% depending on distance... Loss in the powerplant itself is at least 40%. If they can produce your power requirements "next door" with RE they are ahead also :-) Sure you knew all this of course.

Will be fun for you to see it through to completion. And then onwards to other locations :-)
Francis