Betting High on Eolic Energy

FEMSA Energy

7. Affordable and Clean Energy 9. Industry, Innovation and Infrastructure 11. Sustainable Cities and Communities 12. Responsible Consumption and Production 13. Climate Action

Overview

FEMSA conducted different analysis and evaluations in order to come up with the best solution to replace traditional energy with an alternative clean energy. Finally, FEMSA opted for wind energy since it was environmentally, socially, and economically more convenient than other alternatives such as solar energy or biomass. In this way, FEMSA contributes mainly to SDG 7 "Affordable and clean energy" and SDG 13 "Climate action".

Authors

Maria Gabriela Torres

Maria Gabriela Torres

Gabriela Gaytan

Gabriela Gaytan

Gerardo Villarreal

Gerardo Villarreal

Manuel Abascal

Manuel Abascal

Miguel Torres

Miguel Torres

School

EGADE Business School Tecnologico de Monterrey

EGADE Business School Tecnologico de Monterrey

Professor

MARTIN H BREMER

MARTIN H BREMER

Innovation

During 2000 decade, FEMSA started pursuing an alternative energy idea to create value to FEMSA Group in a sustainable way. At that time, the division of FEMSA Energy conducted different analysis and evaluations of technologies of alternative sources of energy, on both technical and economic sides. Finally, FEMSA agreed to choose Eolic energy because it is very friendly with the environment, especially with the community and land, as it allows the landowners to continue their agricultural or livestock activities.

FEMSA decided to build the Eolic Park at the “Istmo de Tehuantepec”, a region located in the southeast of Mexico, due to the favorable location for the wind conditions, where it’s continuous and strong.

As social innovation aspect the project provides an amount as leasing payment to the owners of the ground used in the Eolic Park, ascending the annual amount of $45 million pesos. The project at the same time provided to Juchitan town the amount of $3.8 million pesos, the people located within the park get a benefit from CFE (electricity institution for its acronym in spanish) directly applied in their electricity services receipt, such benefit represents $4.8 million pesos of the trust fund created for the native people of Juchitan at the beginning of the project.

A public lighting system, water pumping, social assistance support for $1.5 million pesos, solar panels are other examples of benefits for the people of Juchitan.

Betting High on Eolic Energy

Inspiration

FEMSA Group is always looking for new alternatives for technology utilized in their operations and services and, at the same time, attending to the business and community needs, giving as a result more value for the Group.

Since 2006, FEMSA has been highly interested in contributing to the reduction of CO2 emissions to the environment, and therefore being able to mitigate environmental risks such as global warming. There is a very high commitment from the corporate leaders to operate in a sustainable way, that is why they created the FEMSA Energy division back in 2012.

Overall impact

Currently, FEMSA Energy is operating with 6 Eolic parks, located all throughout Mexico. These projects have allowed them to get closer to their 2020 goal of operating with 85% with clean energy.

As the division implements renewable energy projects, they continue moving forward to achieving their objectives of sustainability. Through their innovative strategy focused on achieving social and environmental benefits in the community, they are as well getting recovery on the investment, spending equal or less on renewable energy than traditional.

FEMSA Energy is also proud of their sustainability leading role in the industry and the region, and they are starting to feel as an example to follow for medium and small companies for its action in favor of the environment, acting as consultants and coaches. Some current company suppliers are starting to follow their steps.

Business benefit

To FEMSA, this technology would represent a lot of benefits for them. One of these benefits is that they would save the consumption of kilowatts of FEMSA Group. Another benefit is that, by the end of 2016, FEMSA had achieved 46% of total energy consumption in its Mexican operations with clean renewable energy. Currently, the energy generated by the wind source supplies annually:

9800 OXXO stores

17 OXXO Cedis (Distribution Center)

10 Coca-Cola FEMSA factories

84 Coca-Cola FEMSA Cedis

2 Imbera factories

1 PTM factory

3 Heineken factories

1 malt plant

120 Heineken Cedis

3,825 Tecate stores

3 Crown factories

Social and environmental benefit

The Social benefit of this business and innovation would be for the local community of Juchitán that gave their land for the infrastructure of the wind project. During the 18 months of construction of the Wind Project, 1,200 workers were hired, most of them from local communities. In the operations phase of the park, almost 50 people are hired to contribute with the operation.

It also contributes to improve the income and the economy of the families that live in or near the park area. The project makes annual lease payments of almost $45 million pesos to these tenants. At the same time, by an energy trust, the project generates almost $4.98 million pesos. The use of the soil is maintained since it allows its use for agriculture and livestock.

Meanwhile, talking about the Environmental Benefit, it is expected that the park generates almost 1,309,763 MWH/year of energy. Also, it is predicted that with this, it will prevent the emission of CO2 in approximately 690,245 tons. It would require about 12.5 million trees to purify this amount of CO2 emissions. All this will be equivalent to the annual energy consumption of 527,700 Mexican households.

Interview

Victor Manuel Treviño Vargas, Director of Sustainability and Energy

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FEMSA Energy

FEMSA Energy

Monterrey, Nuevo Leon, MX

Business Website: energia.femsa.mx

Year Founded: 2012

Number of Employees: 2 to 10

FEMSA Energy, a division of FEMSA Group, was officially established and started operations in 2012. It was created to respond to the increasing and imminent demands of sustainability, and to search for alternative energy sources for the different business units of the group. Since its beginning, FEMSA Energy has been targeting to neutralize the environmental risks of the Group, contributing to the sustainability of a vast region. Its main objectives for energy management are: 1) energy efficiency in the operations, 2) diversification of the energy portfolio, and 3) efficiency in the transportation systems.