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Mexico will see investment in solar power totaling US$5bn over the next five years, according to the country's solar power association Asolmex.
In conjunction with the energy ministry, Asolmex on Wednesday presented the Solar Initiative, a project that seeks to promote competitiveness in solar energy, define the parameters for the expansion of the sector through the planning of the national electricity grid and identify the obstacles to solar power growth.
As a result of the first electric power auction in March, new projects will bring total installed solar capacity to 4,000MW by 2020, with US$5bn in investment, according to Asolmex.
Current solar energy prices are highly competitive, at an average of US$45/MWh, and the cost of solar technology is currently 70% lower than it was in 2010, Asolmex said.
"We are living in times of change. The energy reform has opened new channels for private sector participation in the electricity sector. A few months ago the realization of the reforms seemed a long way off, but today these changes are a reality that is transforming Mexico," Asolmex president Héctor Olea said.
The projects awarded in the March 30 auction, the contracts for which were signed this week, will bring investment of almost US$2bn and create some 9,500 jobs, the association said.
These projects have the potential to add 12bn pesos (US$655mn) to GDP and lead to an estimated 2Mt/y reduction in CO2 emissions, it added.
The auction has proved that solar is competitive with combined cycle power stations, which is the most efficient use of fossil fuels in power generation, and solar will become more competitive in the coming years, according to Asolmex. Each 1,000MW of solar generation capacity reduces fuel consumption by 1.5bn pesos per year, it said.
"The auction saw 70% of offers for the sale of electricity come from solar projects, which demonstrates the confidence in and competitiveness of solar energy," Olea said.
The next electric power auction will take place on September 30, with 88 firms signed up to participate.