Iberdrola inks deal to build US$ 400 million power plant in Sinaloa
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Mexican state utility Federal Electricity Commission (CFE) awarded a contract to Spain-based energy giant Iberdrola to build a 766 MW combined cycle power station (CCGT) in Sinaloa state.
“Iberdrola's new facility will be equipped with the latest technology requiring an investment of some US$ 400 million,” said the company in a press release.
The Topolobampo III CCGT will be built in the municipality of Ahome and will supply electricity to over 2.5 million Mexican citizens when it becomes operational in January 2020.
The company will handle construction, operation and maintenance of the plant and will sell its production in full to the CFE under a 25-year contract, with fixed capacity fees.
Launched last September, the tender was the second for the plant after CFE rejected all eight bids received in November 2015 because the maximum annual charges offered exceeded the amount budgeted.
Investment in the plant will total US$ 407 million, below CFE's ceiling of US$ 631 million, with an electricity generation price of 0.74 pesos per MWh, the company said in the statement.
The contract comprises the design, construction, testing and putting into operation of the plant, which is expected to take 30 months to build.
The new project is part of CFE's strategy to shift to natural gas use in power generation. The power plant is the seventh CFE has awarded since 2014.
The Topolobampo III station will be equipped with model H01 gas turbines fabricated by GE, one of Iberdrola's major technology suppliers in the power generation business.
In addition to the plant's construction, Iberdrola will commission all ancillary facilities required for its connection to Mexico's national power grid, including power lines and the transformer substation.
Iberdrola currently has power generation projects under way in Mexico with a combined investment worth around US$ 3 billion, which highlights the extent of the company's commitment to this country, one of the most important ever.
The company currently builds three new combined-cycle plants; the North-east (Escobedo), North-west (Topolobampo II) and El Carmen, and two cogeneration plants, San Juan del Río and Altamira.
It is also developing 325 MW of wind power, with two projects, PIER (220 MW) and Santiago Wind Power (105 MW), in the states of Puebla and Guanajuato, respectively.
Furthermore, Iberdrola has taken another step forward in its commitment to renewables in Mexico by beginning construction of its first two large-scale photovoltaic power plants. With a combined capacity of 270 MW, the Hermosillo (100 MW) and Santiago Photovoltaic (170 MW) plants are in the states of Sonora and San Luis Potosi, respectively.