Combined Heat and Power in Mexico: Market Opportunity Analysis

Abstract

Energy reforms in Mexico have emphasized the need for a more diversified energy portfolio to enhance energy security, decrease environmental degradation, and increase Mexico’s economic competitiveness. Starting in 2013, these reforms provide new opportunities for the cogeneration of heat and power (also called combined heat and power, or CHP) in the following ways: (1) they include efficient CHP under clean electricity generation provisions, allowing them to generate Clean Energy Certificates (CEL); and (2) they facilitate investment and competition in natural gas, the primary fuel source of CHP, expanding access to and reducing the price of gas, and increasing the competitive advantage of CHP. Considering the changing regulatory environment in Mexico, and the potential opportunities offered to suppliers of CHP technologies, the U.S. Department of Energy commissioned a report to identify opportunities and challenges facing U.S. suppliers of CHP technology and services within the context of the current regulatory environment in Mexico. This report, prepared by the U.S. Department of Energy Oak Ridge National Laboratory, also provides an overview of the current energy policy environment and the electricity market dynamics related to the CHP sector in Mexico.