As the end of 2017 is slowly approaching, it is time to take a look into the future. The best way to do it is to take another look at PRODESEN 2017-2031 and see what this development plan has prepared for the Mexican energy industry. This is the second of two blogs about this matter. To read the first one, where the past and present state of the Mexican energy industry is discussed, click here.

GENERATION UNITS

PIIRCE is the Indicative Program for the Installation and Retirement of Electric Units. As CRE gathers information of all the generation units from all the current, soon to be and soon to stop being generators in Mexico, SENER then compares it with the expected demand in Mexico (theme covered in the last blog). Here are the results of the PIIRCE, included in chapter 4 of PRODESEN.

Mexico will have to install 55.84GW of additional generation capacity, 63 percent of it categorized as clean energy and the rest falling on the conventional scheme, during the period of 2017-2031. This comes with an expected investment of MX$1.7 billion, 74 percent of which will go for the financing of clean generation units.

Additional generation capacity to be installed by 2031. Graph developed with information from PRODESEN 2017-2031

Of the current 73.5GW installed generation capacity in Mexico, 15.81GW, consisting of 137 units, will be retired during the period 2017-2031. Sixty nine percent of those units are conventional thermoelectric. It is worth noting that this number only represents units owned by CFE, and not by third parties.

Capacity to be retired by 2031 per year. Image taken from PRODESEN 2017-2031

It is expected that Mexico will have 113.27GW of installed capacity by 2031, with a 50/50 ratio between clean and conventional generation units. With this capacity, by 2031 Mexico will be able to generate 456.68GWh per year.

TRANSMISSION GRID

The expansion and revamping of the National Transmission Grid (RNT) Program included in chapter 5 of PRODESEN has three objectives: first, to interconnect the National Interconnected System with the Baja California Península Isolated system, second, to interconnect the RNT with North and Central America, and third, to successfully meet the electricity offer and demand needs in the country. All of them have to be met while minimizing service costs.

While this program considers 925 new projects, accounting for a total of 23,772km of transmission lines, 58,099MVA of transformation and 11,930.7MVA compensation capacity, 56 of them are considered to be the most critical ones to successfully fulfill the three previously stated objectives. The expected investment to cover all the projects, described on pages 105-110 of PRODESEN, account for US$219 billion.

SIN-Baja California Sur project diagram. Image taken from PRODESEN 2017-2031

PRODESEN also considers as highly important the development of projects that will allow for a higher penetration of clean energies into the grid, a revamping of the transmission and distribution grids to facilitate the implementation of both the Wholesale Electricity Market and Smart Grids, and the installation of 20MW of battery banks in Baja California Sur.

DISTRIBUTION GRID

The expansion and revamping of the General Distribution Grid (RGD) Program has four main objectives: first, to satisfy the offer and demand of electric energy in the RGD, second, to increase the energy efficiency in the distribution of electric energy, third, to increase the quality, reliability and security in the RGD and the electric supply, to comply with the electricity market requirements for the RGD, and fourth, to transit towards a Smart Electricity Grid (REI) with the objective of optimizing the RGD operation. To fulfill these objectives an investment of US$165 billion is expected.

Among the 11 projects considered in the PRODESEN, the most representative ones are: the creation of the Universal Electricity Access Fund (FSUE), to bring electricity to 1.8 million people located in marginalized rural areas by 2021, the reduction of both technical and non-technical losses, and the deployment of information acquiring and managing infrastructure, to implement advanced measurement technologies that will ensure the creation of a Smart Electricity Grid in Mexico.

Evolution and goals for decrease in losses. Graph taken from PRODESEN 2017-2031

ROUND UP OF INVESTMENTS

PRODESEN 2017 – 2031 expects a total investment of MX$1,655,225 in the generation, MX$219,463 in the tranmission and MX$165,218 in the distribution of electricity sectors. This investment is 9 percent lower than the one stated in PRODESEN 2016-2030.

Expected investment in the electricity sector to be done up until 2031. Graph source PRODESEN 2017-2031

For more articles on Mexico’s energy industry, check out our blog!

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