Atexcaco: Run-of-the-River Hydroelectric Plant

COMPAÑÍA MINERA AUTLÁN, S.A.B. DE C.V.

6. Clean Water and Sanitation 7. Affordable and Clean Energy 9. Industry, Innovation and Infrastructure 12. Responsible Consumption and Production 13. Climate Action

Overview

Atexcaco Hydroelectric plant is the only private hydroelectric which operates on “run-of-the-river” system in Mexico. This hydroelectric plant is in Puebla and it is part of Autlan, a company mainly dedicated to exploit manganese ferro-alloys.

Different from other mining companies and also traditional hydroelectric plants, Autlan created Atexcaco Hydroelectric in order to supply their 155 MW need of energy, through a “run-of-the-river” or “no reservoir” plant.

The Atexcaco Hydroelectrectric initiative supports four of the Sustainable Development Goals:

(7) “Affordable and Clean Energy” - Through hydroelectric power, and no combustible fuels, Autlan creates its own energy.
(6) “Clean Water and Sanitation” - Without a reservoir, flooding of the upper part of the river does not take place, river flow continues. As a result, people and animals, remain living at or near the river and existing habitats are not flooded.
(12) “Responsible Consumption and Production” - Atexcaco's Plant is designed in order to only extract the correct flow amount, without damaging environmental balance.
(13) “Climate Action” - since the plant provides 100% sustainable energy, avoiding the river contamination and preventing emissions of CO2.

We believe there is an innovation and potential versus other manufacturing companies by integrating a self-service clean energy and also versus traditional hydroelectric plants. Mexico is sub-indexed in terms of hydroelectric production (1.6% versus 16% rest of the world out of total energy production) and is a country which could scale this technology through its 37 hydrological regions, and not only public but private initiatives such as Autlan. In this way Autlan group can create value with a sustainable method.

Authors

Vanesa Gonzalez

Vanesa Gonzalez

Xareni Gomez

Xareni Gomez

Salma Patricia Avila Coronado

Salma Patricia Avila Coronado

Ricardo Delgadillo

Ricardo Delgadillo

School

EGADE Business School Tecnologico de Monterrey

EGADE Business School Tecnologico de Monterrey

Professor

Ezequiel Reficco

Ezequiel Reficco

Innovation

Since Grupo Autlan plants demand a lot of energy; they designed, built and operated a “run-of-the-river" hydroelectric plant to generate its own renewable energy. In this hydroelectric plant the power created by the water is taken to produce clean, safe and 100% renewable energy. With this technology, without a reservoir, people may remain living near the river without the concern of flooding. There is not an impact in the river, animals, communities or the environment; they don’t use any kind of chemicals during the process, the electricity generated is in harmony with nature, respecting the local flora and fauna and allows the population to be safe because the water runs continually.

Regarding Atexcaco, the construction has 4 structures that canalize the water unto 2 tunnels, 2 power units and 2 turbines transform the water force in megawatts. The small water portion goes to the turbines where the electricity is produced due to a fast and strong process. After passing through the turbines that generate electricity, the water comes out clean, is not contaminated because they don’t use chemicals in the process. The hydroelectric uses only its force and then the water reconnects with the river, following its natural channel. It is important to mention, Engineers calculate the amount of water to extract, without affecting the river flow. A transmission line transforms this energy in kilovolts that are delivered to Federal Electricity Commission known as CFE in México. The CFE company sell it to the communities and Autlan group with better prices conditions, getting affordable quotas and sustainable energy for their operation.

Clean energy technologies have been present about 100 years ago, but their implementation is expensive and unavailable in many parts of the world.

In Mexico, hydroelectric energy is produced mainly by 29 plants, however they use more harmful technology - they collect the water, use a dam to store it and create floods in the communities where are operating, they have environmental consequences, affecting the natural water flows and fishes. There is a record of Mexican Hydroelectric plants that have affected the environment by its floods, and none of these plants are designed to work in a circular economy. Atexcaco is the only private company in the country and Central America that is investing on “run-of-the-river" technique.

Link about Hydroelectric Atexcaco Plant

https://www.youtube.com/watch?v=7U-JKsjf35A

Atexcaco: Run-of-the-River Hydroelectric Plant

Inspiration

Elsa Saucedo, Sustainability Manager of Autlan company mentioned on an interview that sustainability and production took the same force and corporate importance in every corner of Autlan’s company.

Autlan’s vision of shared value goes beyond compliance with the law because, through innovation, they continuously seek new alternatives to contribute to the mitigation of climate change.

The Atexcaco Hydroelectric plant brings an important contribution to reduce the emissions of CO2 into the atmosphere and save energy and gasoline consumption.

An important element of this innovation is the "auto-supply" activity. The plant produces the required energy for all Autlan plants. Their production has been highly benefited in cost terms. The hydroelectric is considered “self-sufficient” and sustainable company.

According to the International Energy Association, today, hydroelectric power represents 16.3% of world production and 70% of renewable energy however The Annual Report of "National Energy Balance 2017" by SENER, in Mexico, pointed out hydroelectric power only accounts for 1.6% of national production and 17% of renewable energy, therefore an opportunity as a country exists.

That 1.6% of national production is produced by 29 main hydroelectric plants, all of them with a reservoir.

Overall impact

The Hydroelectric plant generates 272 GWh of clean energy, promoting the use of energy and providing alternative renewable energy that CFE can sell to the communities. The plant allows Atexcaco produce their own energy without depending of international fuel sources.

In short term this innovation is measured with the savings on energy costs that Autlan is receiving and with the prevention of emissions of CO2 and other gases that pollute the planet. The innovation also provides decent work to Atexcaco employees.

Since 2011 Mexico´s government is re-applying this sustainable model thanks to Autlan’s Hydroelectric plant.

Autlan is creating a robust organization based on diversified business units. It is growing with new opportunities regarding the generation of sustainable energy for different natural sources.

In addition, the project is contributing to the country, reducing the technological delay in renewable energy compared to other regions.

In long term is necessary to consider the following opportunities they could scale the initiative:

- Mexican government expects in 2024 that a 35% of installed capacity will come from renewable energies, according to the “Renewable Energy and Financial Energetic Transition Law” (LAERFTE by its Spanish acronym)
- México has a variety of ecosystems, natural resources diversity and weather conditions to be considered like a high potential option to explore and generate clean energy.
- The expected demand for renewable energy is increasing, in Mexico it is expected for 2031 a clean energy capacity of 113,269 MW and a generation of electricity of 456,683 GWh (46%).
- The Atexcaco hydroelectric has 20% of the entire goal of Mexico’s renewable energy, they are working together with other companies to increase this percentage at all.

Autlan as a private leader in this innovation is taking multiple advantages creating synergies with other companies to growth this industry in Mexico.

Business benefit

The hydroelectric plant generated 236 GWh, 245 GWh and 241 GWh of electricity, satisfying 23%, 27% and 29% of Autlan's total demand in 2018, 2017 and 2016.

With the plant, Autlan’s EBITDA increased $93.4 USD millions and had a profit of 23% over Sales for 2018; the sales have increased since they have lower costs and can offer competitive prices.

There is a reduction in costs, the company has saved approximately $10.0, $4.0 and $2.7 million dollars in 2018, 2017 and 2016 respectively, as a result of its self-supply. The operating divisions saved 9% in gasoline divisions and the manganese division achieved 15% improvement in energy efficiency.

The administrative procedures to begin diversification of selling energy to third parties (clean and sustainable energy) have been finished.

Autlan is planning to install a third turbine to reach 22MW and generate 100% of Atexcaco Hydroelectric plant capacity. With this improvement it would be possible to take advantage of the rainy months. And they can obtain in 3 months the max capacity.

Social and environmental benefit

During the plant construction there were created 2,000 direct and indirect jobs for the communities located in Hueyapan, Yaonahuac and Teziutlan, Puebla; nowadays the hydroelectric plant works with 54 employees.

Also, now 5 communities have energy power thanks to the hydroelectric installation, since they used to live in the darkness without any government support. The energy production is 100% renewable.

Since the plant is fueled by water, it doesn’t pollute the air and contributes to have a healthy environment preventing the emission of 122 thousand tons of CO2, this is equivalent to the CO2 produced by 22,818 cars in one year.

Autlan’s Hydroelectric plant contributed in 2018 to the 3.44% percent of the generation of renewable hydroelectric electricity in México, considering America Continent. IRENA (2019), Renewable Energy Statistics.

Interview

Lic. Elsa Saucedo Salazar, Lic. Elsa Saucedo, Gerente de Sustentabilidad.

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COMPAÑÍA MINERA AUTLÁN, S.A.B. DE C.V.

COMPAÑÍA MINERA AUTLÁN, S.A.B. DE C.V.

Monterrey, Nuevo León, MX

Business Website: https://www.autlan.com.mx/

Year Founded: 1953

Number of Employees: 1001 to 5000

Autlán is a Mexican company with 65 years, the company constantly strives diversification and growth in Renewable Energy, Mining and Ferroalloys.