Greater Mexico-Central America power integration achievable - Eclac

Two obstacles on the path to increased integration of Mexico's and Central America's power grids are regulatory issues and Mexico's generation capacity.

But these can be addressed, which would enable existing infrastructure to be better taken advantage of, according to a report by the Economic Commission for Latin America and the Caribbean (Eclac).

There are no legal impediments to increasing grid interconnection between Mexico and the region, and the capacity of Central American countries to transfer electricity to other countries is increasing, it said.

Eclac suggests expansion plans should be drawn up for each country's grid in order to better take advantage of such connections.​

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SIEPAC

While Guatemala currently buys power from Mexico, the main system in the region is the Central American electricity interconnection system, known as Siepac, completed in 2014 at a cost more than US$500mn. Daily electricity trading is now a reality among the six participants – Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica and Panama.

A recent BNamericas Intelligence Series report said, however, that Central America is still a long way from achieving the deeper integration originally envisioned by Siepac's architects, identifying technical, regulatory and infrastructure-related challenges as impeding the project's evolution.

"We foresee a very promising future, but there needs to be a greater commitment to integration and cooperation efforts among the countries that constitute the market," Miguel Bolinaga, general manager of AES Panama, said in the report.

MEXICO

Mexico, currently a stakeholder in Siepac grid owner EPR but not part of the market, can help boost regional integration but to do so needs to increase its installed capacity, the Eclac report said.

State generator CFE is switching from fuel oil to natural gas in power generation and working to increase associated distribution infrastructure, as well as increasing its use of renewables. Mexico's energy transition law stipulates that 25% of power must be generated from renewable sources by 2018; 30% by 2021; 35% by 2024; 45% by 2036; and 60% by 2050.

The energy ministry (Sener) has said the country will more than double its power generation capacity over the next two decades, with renewables alone adding 66GW by 2030, with investments of US$90bn.

The country currently generates around 12% of its power from renewables.

Mexico's first electric power auction, held on March 30, will increase the country's solar and wind generation capacity 75%, according to Sener.