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CFE’s energy production costs are 14% higher vs. Peñoles

CFE’s production costs were 14% more expensive compared to Industrias Peñoles in 2020, this mining company reported.

Regarding energy, Peñoles’ priority is to ensure supply for operations at competitive costs, in addition to making efficient and sustainable use of energy.

In 2020, the electricity demand of this company decreased 2.7% due to the fact that the increase in consumption due to the zinc expansion was offset by the suspension of activities in three mines.

Its portfolio of power plants generated energy equivalent to 104.7% of its self-sufficiency, with the incorporation of the Mesa La Paz wind power plant, which began to deliver energy in April.

However, the company reported that it was forced to buy more energy from the CFE, whose cost is 14.0% higher, due to delays in the entry into force of the new transmission agreements and the migration of qualified users to the Wholesale Electricity Market given the changes that the Mexican authority has made to the country’s energy policy.

Thus, the unit cost was 6.7% higher than last year (6.86 US cents / kWh), additionally affected by the increase in transmission rates for legacy contracts, the constitutionality of which is being discussed.

Energy production

Through its strategy of electricity self-sufficiency, Peñoles has increased the share of clean technologies in electricity consumption.

From 2014 to 2019, it grew from 7.8 to 27.3 percent.

Then the participation decreased in 2020, to 25.0%, because it was expected to consume the generation of the Mesa La Paz wind power plant, to reach 40.6% of consumption of clean technologies.

However, due to a delay in the authorization of the Energy Regulatory Commission for delivery to the load centers, it was necessary to sell the generation of this plant in the Wholesale Electricity Market and acquire the equivalent from the Federal Electricity Commission.

Likewise, Peñoles operates a wind power plant in the state of Oaxaca (Fuerza Eólica de Istmo), produces energy through steam turbines at Metalúrgica Met-Mex and substitutes energy consumption through solar thermal collectors at Milpillas and Metalúrgica Met-Mex.

In 2017, it began the commercial operation of an electricity coverage contract with EDC and in 2020, another with Eólica Mesa La Paz.

 

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