In his February 11 press conference, President Andres Manuel López Obrador pointed to the “deliberate dismantling” of CFE by regulatory authorities during the last administration. Today, the president went further in his criticism of CRE by announcing that President Commissioner Guillermo García has a “conflict of interests,” which he will provide proof of in the next week.
In an interview with Mexico Energy Review earlier this year, García shared his perspective on what would be the priorities over the next few years. But what has been accomplished so far by CRE with García at its helm and what will be in store in the future?
“We want to finish the regulation intended for distributed generation. We are missing some pieces, the most important being collective distributed generation. This means that a group of people can set up a renewable electricity installation and share among them all the benefits. This model has already been implemented elsewhere in the world and it is something that the industry has requested, so we are working on its regulation.”
In Mexico, distributed generation regulatory frameworks apply to every power generation central that supplies up to 0.5MW. In the last couple years, distributed generation experienced significant growth, mainly driven by solar installations. According to the PRODESEN 2018-32, from 2016 to 2017, this segment experienced a 75 percent annual growth rate. In 2018 alone, 82,000 solar roofs where installed, representing a 70 percent increase from 2017. A steady growth has been maintained but with the new regulation in place, this industry segment could drive up the renewable share.
“In this sense we are working on several regulatory pieces and we are in the process of identifying the services that provide storage. We have identified over 18 storage services, such as frequency regulation, transmission in peak periods, generation in peak periods, storage in hours of negative costs and sale in hours of high costs.”
Energy storage is the missing piece for renewable transition. When the sun is not shining or the wind is not blowing, CENACE is responsible for powering up baseload generation plants such as combined cycles and hydro power plants. But with the increasing power demand and the current transmission and distribution infrastructure, the need of storage facilities close to the generation point is becoming a pressing issue. But where does Mexico stand these days in energy storage developments?
In 2018, the first utility-scale solar project in Latin America started operations with a large-scale storage solution. Aura Solar III has an installed capacity of 30MW and uses a Lithium-Ion battery solution with a 10.5MW capacity. The company that runs this project is Gauss Energía.
Gauss’ Director General Héctor Olea is confident that energy storage will be deployed soon. “In the next two years, battery prices will decrease by half and will affect Mexico from a technological and regulatory standpoint. The technology has been around for some years now but the disruption will reside in the price. The important thing is to establish ground rules that permit the development of this technology in Mexico,” he said. According to him, the idea behind developing Aura III was to show regulatory institutions and investors that this is now a reality in Mexico.
The next steps…
In November 2018, CRE approved an agreement that permits the sale of electricity between particulars. It is meant to incentivize investment, research, innovation and competitiveness between involved stakeholders. This regulation also opens the conversation for EVs and the development of charging stations in the Mexican territory.
According to CRE, to date there are around 2,000 EV charging stations in the country and almost all have been installed by automotive OEMs. “The idea of this regulation is to tell them that they can resell electricity and by establishing a regulatory framework that provides certainty to investors, they can now set up EV charging stations throughout the country,” said García Alcocer.
This is an exclusive preview of the 2019 edition of Mexico Energy Review. If you want to get all the information, plus other relevant insights regarding this industry, pre-order your copy Mexico Energy Review or access our digital copy.
Don’t miss out on your chance to rub shoulders with the industry’s leaders at the launch of the new edition of Mexico Energy Review at Mexico Energy Forum 2019, at the Sheraton Maria Isabel hotel in Mexico City this February 20! Register here!