(Last updated: 25 May 2011)

Trends and opportunities

The market

Currently, Mexico has about 1924.8MW of power generation installed capacity based on renewable energy, including public service, cogeneration and capacity in Mexico’s public service. Mexico has huge potential to develop renewable energies such as wind, geothermal and solar energy.

According to the Renewable Energy Study for ‘Electricity Generation in Latin America: Market, Technology and Prospects’, Mexico ranks behind Brazil and Argentina in the field.

Mexico possesses a great potential to generate energy through renewable sources as the country has:

• High volumes of solar radiation
• Hydraulic resources for the installation of mini-hydraulic plants
• Steam and water for the development of geothermal fields
• Areas of intense and constant winds
• Large quantities of agricultural waste
• Large quantities of organic waste from the cities and rural areas that need to be processed sustainably

The following table shows the current situation with respect to energy generation in Mexico:

Capacity of energy generation in Mexico / per type (2009)

(Sources: Mexican Energy Regulator Commission and the Federal Energy Commission)

In order to fulfil the goals of energy generation using renewable sources, the Federal Renewable Energy program is factoring in resources from Certified Reduction Emissions for projects registered under the CDM Mechanism.

Opportunities

Geothermal

The installed geothermal capacity in Mexico is 964.5MW, and the Federal Energy Commission estimates that the potential is 1,395MW.

Geothermal projects (Federal Energy Commission)

(Source: Federal Energy Commission)

Bio-fuels

The potential of bio-energy in Mexico is estimated between 2,635 and 3,771 pentajouls (PJ) per year. In the agro-industrial sector the sugar cane industry has been calculated a potential generation of energy from the sugar cane bagasse superior to three million megawatts per year.

The bio-energy project from the company Sistemas de Energia Internacional located in Monterrey in Nuevo Leon state is the first project to take advantage of the bio-gas in a sanitary field facility to deliver energy to the network, with a capacity of 12.7MW.

With the consolidation of the first mixed company that will utilise biodiesel produced in Chiapas, a new era begins for transportation purposes. Biodiesel of these vehicles is being obtained from a 10,000 hectares Jathropa Curcas (also called pinion) plantation and manufactured in a 12,000 litre-per-day biodiesel reactor.

Among the benefits of these new vehicles, the cost of public transportation in Chiapas will decrease approximately US$0.03 to reach a total cost of USD$0.30, Plus, there is a special price offered to senior citizens and students. The payment will be made through electronic cards that will have an active life of five years.

These types of public transportation will benefit 70,000 users in Tuxtla Gutierrez, capital city of Chiapas, and will substitute 144 obsolete collective transportation vehicles.

Wind

The ‘Overview of Mexico Wind Energy 2011 Report’, prepared by the Mexican Wind Energy Association, states that the wind resource potential in the country reached 40,000MW, of which 10,000 comes only from the state of Oaxaca.

In Mexico a number of different regions have been identified as having great potential for the wind energy generation, such as the Tehuantepec Isthmus, in Oaxaca state, La Rumorosa in Baja California, and in other states such as Zacatecas, Hidalgo, Veracruz, Sinaloa and the Yucatan Peninsula. The Mexican Wind Association estimates that all these areas may contribute up to 10,000MW of capacity to the national energy grid.

Potential wind projects

Wind energy has grown significantly over the past few years and has become one of the main renewable sources of energy generation. In Mexico there are projects registered in Baja California and Oaxaca and there has been development of several wind parks under a project called Temporada Abierta. Through Temporada Abierta the construction of infrastructure and reinforcement of the transmission lines to interconnect 2,473MW of wind public and private projects in Oaxaca between 2009 and 2012 was (and will be) carried out.

Additionally, there are five other wind projects of the Federal Energy Commission that will start operations between 2010 and 2012.

The National Institute of Energy Research developed the Regional Centre of Wind Technology (CERTE) in the Tehuantepec Isthmus, in Oaxaca, with the support of the UNDP and the Worldwide Fund for the Environment. This will be a centre for research and investigation of technological development for wind energy.

According to the projections of the energy sector 2008-2017, by 2012 the Federal Energy Commission will have installed 593MW in Mexico from wind energy alone.

Photovoltaic and thermosolar

Mexico has one of largest annual solar radiation indices, with from 4.4 kWh/m2 per day in the central zone to the 6.3 kWH/m2 per day in the northern part of the country.

It is estimated that the total capacity of the photovoltaic installations in Mexico is of 18.5MW that generates an average 8,794MWh per year.

A project called ‘IMPULSA’, from the National University UNAM is undertaking research and development for solar energy with photovoltaic and thermosolar technologies, for water desalination in northern of Mexico.

The main instrument of public policy of the Calderon administration is the Program for the Promotion of Solar Water Heaters in Mexico 2007-2012 (PROCASOL). The main objective is to promote the use of solar energy by demonstrating the energy savings and using water heaters in various sectors (ie. residential, commercial, industrial and agricultural), by substituting the traditional methods based on fossil fuel and solar radiation.

It is expected that in 2012 there will be 1.8 million square meters of installed solar thermal panels.

Mini-hydraulic

The mini-hydraulic panorama can be divided into public and private. Currently there are 22 private plants, 12 in operation, two inactive and eight under construction, with permits supplied by the Energy Regulator Commission. For public plants, installed capacity in operation is 83.5MW, through 31 plants operated by the Federal Energy Commission with a total capacity of 270MW.

The potential of the national hydroenergy sector was estimated by the National Commission for Energy Efficiency in 2005 at about 53,000MW. For the plants with capacity of less than 10MW the potential is about 3,250MW.

Tariffs, regulations and customs

Industry standards

Since November 2008, renewable energy has a very detailed and specific legal framework: the law for the Development of Renewable Energy and Financing for Energy Transition. An objective of the law is to regulate the development of renewable energy and clean technologies to generate energy. To achieve this objective; the law is based on the following instruments:

• National Strategy for Energy Transition and Sustainable Energy Development, which is a mechanism to guarantee efficiency and sustainable energy and to drive the use of the renewable energy and clean technologies.
• Special Program for the Development of the Renewable Energy. This is an instrument by which public policies will be made and should include the objectives for the use of the energy sources and the actions to achieve them.

Optimisation of the renewable potential resources by the Mexican Government

In Northern Mexico, the Mexican Government is planning to adopt a renewable energy storage device in order to optimise the renewable energy they currently gather while also expanding their renewable energy potential. Working with Rubenius, a United Arab Emirates based energy company specialising in energy supply and the stabilisation of energy grids, Mexico plans to invest US$4 billion into the construction of a 1,000MW renewable energy storage facilities. The facilities could also work towards allowing Mexico to trade energy with California since the facilities would be built close to the US and Mexican border in Mexicali, Bali California. The facilities are expected to be completed within the next six years and will use a certain kind of sodium sulphide batteries that specialise in high capacity collection and discharge of power.

In Northern Mexico, the Mexican Government is planning to adopt a renewable energy storage device in order to optimise the renewable energy they currently gather while also expanding their renewable energy potential. Working with Rubenius, a United Arab Emirates based energy company specialising in energy supply and the stabilisation of energy grids, Mexico plans to invest US$4 billion into the construction of a 1,000MW renewable energy storage facilities. The facilities could also work towards allowing Mexico to trade energy with California since the facilities would be built close to the US and Mexican border in Mexicali, Bali California. The facilities are expected to be completed within the next six years and will use a certain kind of sodium sulphide batteries that specialise in high capacity collection and discharge of power.

Once completed, it is unknown just how much the facilities will immediately be used. The area in Baja California where the project is to be completed is within range of areas with high renewable energy potential. Wind energy and solar energy are the highest potential contributors to the list of contributors thanks to the fact that there is plenty of room for wind farms and the fact that Mexico has one of the largest potentials for solar power use in the world. The facility is also expected to contribute to gaining support for a program that members of the Mexican Government would like to see happen that involves powering cities removed from the main power grids with renewable energy resources.

As Mexico continues to grow into their renewable energy potential it is nice to see them developing projects like this that would aid in the spread of the technology within the country. Hopefully in time, Mexico will be able to see their renewable energy plans come to fruition and can stand as an example for surrounding nations about the usefulness of renewable energy.

Links and industry contacts

Government, business and trade resources for Mexico

Ministry of Energy – www.sener.gob.mx
Ministry of Environment and Natural Resources – www.semarnat.gob.mx
National Commission for Energy Efficiency – www.cre.gob.mx and www.conae.gob.mx

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