The Mexican Wind Energy Association (AMDEE), founded in 2005, brings together project developers, manufacturers and service providers to present a united front on common issues before the authorities, society and economic players related to the wind energy sector.The Mexican Wind Energy Association (AMDEE), founded in 2005, brings together project developers, manufacturers and service providers to present a united front on common issues before the authorities, society and economic players related to the wind energy sector.

 

Q: From a technological perspective, what is the main hurdle for wind energy development in Mexico?

A: As wind resources can only be found in specific regions of Mexico, AMDEE has identified saturation and bottlenecks in several nodes across the country. Twelve years ago, the only region that was attractive for investment was the Isthmus of Tehuantepec. Today, wind projects are present in 11 states, with the strongest growth taking place in Tamaulipas, Coahuila and Nuevo Leon. The Ministry of Energy’s PRODESEN 2018-32 establishes the requirement of new transmission lines but these have not been built at the needed pace. This infrastructure has to be fortified, not only to transmit energy from the generation facility to the consumption point but to design a robust electricity network that allows the exchange of energy between regions. The energy mix has significant participation of wind and solar technologies and even though their generation profiles are different, they are complementary. When exchanging energy between regions, we can minimize the dependence on other carbon-based energy sources. A collaboration between public and private entities is needed to finance and comply with these transmission requirements.

 

Q: What role will renewable energy and storage play in the electrification of the Mexican energy system? 

A: In a recent study carried out by AMDEE, the Commission of Private Sector Studies for Sustainable Development (CESPEDES), the Mexican Association of Solar Energy (ASOLMEX) and Iniciativa Climática de México, it was determined that by 2024 there should be 300,000 electric vehicles in Mexico. At the same time, internal combustion engines and electric vehicles will reach cost parity. The electricity sector has to be prepared to satisfy this demand and a great percentage of it will be provided by renewable energy and energy storage systems. When we think about batteries, we think about generating energy when the resource is available and storing it when the sun is not shining or the wind is not blowing. This is only one application. Batteries are valuable elements of the electricity system. In case of a failure in the generation facility, batteries could supply energy for a while. This technology also provides voltage and frequency regulation providing support to the grid and reducing the need for transmission lines in several cases.

 

Q: Which market scheme is best suited for the development of wind energy projects?

A: Wind energy projects manage high volumes of generation in Mexico. This technology is benefiting from PPA schemes and the long-term electricity auctions. Bilateral private contracts are gaining traction because the prices offered by wind projects are at least as competitive as conventional energy sources and usually, even more competitive. Additionally, they represent long-term price certainty. Long-term contracts can be established because O&M costs are very low and there is no fuel in between, which means a lack of volatility. Under the previous regulatory framework, it was very not easy for small or medium sized consumers to participate in the PPA structure. Before, the off-taker had to become partner of the project in question. It was a game in which only big players could participate. Now, every consumer can participate without becoming a partner in the project. Before the implementation of the new energy model, we were used to having fixed prices for at least one month but now these prices change every hour. We also still have a methodology to define electricity tariffs and this is limiting smaller consumers’ participation in bilateral contracts. The market needs to stabilize and send clear signals for these companies to step in.

 

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!

 

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