mexico renews itself - ProMéxico

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Mexico
Renews
Itself
In just a few years, the renewable energy industry has grown and
the outlook for both the public and private sectors is optimistic.
____
by jesús estrada cortés
Renewable energies are finally being taken seriously,
driven by greater environmental awareness and threats
like climate change, together with the commitments
governments have undertaken to reduce greenhouse gas
emissions and dwindling fossil fuel reserves. As the world attempts
to clean up its act, Mexico’s industrial sector is attracting more and
more investors eager to participate in green energy projects.
Mexico’s renewable energy industry has grown in leaps and
bounds over the last few years, due to a combination of government
incentive programs and an influx of foreign capital.
According to figures furnished by the Energy Regulatory Commission
(CRE), Mexico’s green industries attracted over 4.77
billion usd in foreign investment between 2005 and 2011. Wind
energy, a sector that has posted sustained growth, accounted for
92% of total investment in renewable energies.
In addition to private investment, Ministry of Energy (SENER)
tenders for infrastructure projects to hook up generators of clean
electricity to the national grid brought in an extra 3.3 billion usd
between 2010 and 2011.
“To date, installed wind capacity is 1,100 megawatts (MW),
which is substantial if we consider the country’s total installed capacity
is 54,000 MW. In other words, wind farms account for two
percent of all the electricity Mexico generates. We estimate that
in a year or so, this figure will have doubled and that by 2015, our
wind farms will generate around 4,000 MW,” says Leopoldo Rodríguez
Olivé, president of the Mexican Wind Energy Association
(AMDEE), who believes this increase in installed wind capacity is
a good indicator of the health of the industry.
In 2005, Mexico’s wind capacity was barely 2 MW, but
had jumped to 85 MW the following year when the first wind
project was implemented by the Federal Electricity Commission
(CFE). The private sector began participating in 2009,
pushing installed capacity up to 519 MW in 2010, and again to
1,100 MW in 2012.
According to a study conducted by AMDEE, Mexico could
feasibly increase installed capacity to 12,000 MW by 2020, allowing
the country to reach many of its renewable energy and
emission reduction targets.
There are several mechanisms under which the private sector
can participate in Mexico’s wind energy business. “First,
there are the companies that generate electricity. Under Mexican
law, a private entity cannot sell electricity directly to another
private entity, but can only generate it for self-supply purposes.
The other way of participating is via CFE tenders, under
which companies sell electricity to the government at an agreed
price. About 40% of wind energy projects in Mexico operate
under this mechanism, while the rest are self-supply projects,”
says Rodríguez Olivé.
As the industry expands, costs have become more competitive,
making renewable energies more attractive to private investors.
Depending on the region the project is located in and the financing
conditions it operates under, costs “can be as low as 6.5 to
10 cents on the usd per kWh, which is competitive compared to
commercial and industrial rates, which are the lowest,” says Rodríguez
Olivé, adding that “wind energy is already a competitive
technology that offers an interesting alternative.”
photo courtesy of cfe