Comments on El Gallo Large Hydro Project (Mexico)

Wednesday, September 1, 2004

Current Status: Registered on 14 July 2006

Comments on Project Design Document for the World Bank Prototype Carbon Fund El Gallo Large Hydro Project (Mexico)

Submitted to the PCF

My comments on the El Gallo hydroelectric project are very similar to the comments I previously submitted on the Mexican Trojes, Benito Juarez, and Chilatan hydroelectric projects.

While it is argued that the project developers have had difficulty assuring full financing for the project and that the involvement of the PCF in the project helps lend credibility to the project, for a number of reasons it seems very likely that the El Gallo project would have been built in the near future, if not now, even without the contract with the PCF.

Hydropower is a common, cost-effective technology currently being planned to be added to the Mexican grid. This is especially true for hydro projects added to existing reservoirs.

Hydroelectric power is common on the Mexican grid, making up at least 15% of capacity in Mexico, including 34 small hydro plants currently in operation in Mexico (2001 Hydropower & Dams World Atlas). According to the PDDs of the Trojes, Benito Juarez and Chilitan projects, plenty of new hydropower development is being planned, composing 10% of expected new capacity additions. Also, hydropower is described by the hydropower industry to be cost effective in Mexico. According to the 2003 Hydropower & Dams World Atlas, the amount of economically feasible hydropower in Mexico totals over 75% of total current installed capacity on the grid of all technologies, and the cost for hydropower is lower than most other type of power plants.

El Gallo is being built onto an existing dam constructed with the intent to construct future hydroelectric plants on-site. Expanding existing hydro projects is frequently one of the most cost-effective methods of adding new generation capacity to a grid – especially where the relevant dam has been designed to allow for such expansion such as with El Gallo. A recent Web article, announcing that Voith Siemens won the construction contract for El Gallo, mentions that “Comex is studying 'dozens' of hydro project possibilities in existing reservoirs across Mexico.”

The fact that the El Gallo dam was constructed to allow for the future building of a hydroelectric plant, and that this type of project is relatively low cost, indicates such a plant would likely be built in the near future without carbon credits.

With such a common and low cost technology it is unlikely that this project, now or in the near future, is additional.

Barbara Haya
PhD Student
Energy and Resources Group
University of California, Berkeley
August 2004