Renewable energy in Latin America: Mexico | United Kingdom | Global law firm

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Sun Belt

Mexico has rich solar resources and is located in the socalled Solar Belt. In the Baja California region, average solar irradiation is greater than 2,200 kWh/m² per year which, to put in perspective, is more than double the radiation in Germany. Across Mexico, daily radiation varies between 1,600–2,250 kWh/m² per year, which is comparable to some of the best locations in the world such as the MENA region and Chile. The first large (30MW) solar PV plant, Aura Solar I, started operations in 2013 in Baja California. In August 2015, the country’s solar energy association, ANES, announced its target of 3GW total installed capacity by 2025.

Geothermal revival

Mexico has traditionally been one of the largest geothermal markets in the world, yet little development has occurred over the past decade. Recently, interest in the sector has revived with the development of two new 50MW projects. Geothermal research centre CEMIE-Geo opened in 2014 with an operating budget of US$75 million over the next four years to promote exploration and projects within the private sector. Geothermal has the advantage of providing baseload power, unlike the intermittent nature of solar and wind, which makes it attractive for developers and investors. In July 2015, the Ministry of Energy awarded five geothermal concessions and 13 permits for exploration to CFE, who will study geothermal resources for 448MW capacity across three states.

Currently, there are no private owners of geothermal power plants and the only plants in operation are owned by the CFE. However, Deputy Planning Minister Leonardo Beltran stated in July 2015 that private investors will have the opportunity to develop some 5000MW of probable geothermal resource in the country. The Energy Ministry expects an additional 217MW of geothermal power by 2018. This number is modest compared to the estimates for wind and solar, but reflects the greater time and resources needed for geothermal projects — a typical project takes about seven years to complete. The secondary law, which is solely focused on geothermal energy, will prove key to giving this energy source the necessary boost by addressing the high risks and costs associated with geothermal exploration.

Advancing wind energy

At the end of 2015, the national installed capacity of wind energy was 3,037MW. The Mexican Wind Energy Association, AMDEE, has targets to generate 12GW of power by 2020. Construction has mainly been focused in Oaxaca, considered to be one of the best wind resources in the world, but investment has slowed down due to a mixture of social conflict with communities and a saturation of projects. Nevertheless, Enel Green Power is currently constructing an additional wind farm in Oaxaca having completed its Sureste I – Phase II farm in March 2015, and Iberdrola continues to construct its 102MW La Ventosa plant. Gamesa finalised an agreement with Banco Santander in 2014 for the joint development of wind farms in Baja California, with a total installed capacity of up to 500MW. In 2016, there is expected to be 805MW of new wind capacity added to the grid, rising to a total installed capacity of 9,500MW by 2018.

According to AMDEE figures, investments in Mexican wind to date exceed US$6,000 million. This reflects the 37 wind farms of varying sizes now in operation in the country. Between 2016 and 2018, a further US$13,000 million of wind investment is expected.

Self-supply scheme

Mexico expects the largest chunk of new solar and wind capacity to be generated by businesses, which under the self-supply law allows companies to buy electricity directly from power plants. Walmart, for example, supplies its stores in Mexico from a 67MW wind farm in Oaxaca. In May 2014, a 252MW wind project was announced in the state of Nuevo Leon that will provide energy for a group of companies including FEMSA and cement giant Cemex.

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Source link : https://www.nortonrosefulbright.com/en-gb/knowledge/publications/2186f590/renewable-energy-in-latin-america-mexico Author : Publish date : 2024-01-19 07:11:59 Copyright for syndicated content belongs to the linked Source .

Renewable energy in Latin America: Mexico | United Kingdom | Global law firm

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