Political shift unlikely to derail smart grid growth - consultancy

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Monday, October 17, 2011

Smart grid development in Mexico is unlikely to face disruption if political party PRI's presidential candidate Enrique Peña Nieto wins the 2012 presidential election, power consultancy Northeast Group's research director Chris Testa told BNamericas, elaborating on a report.

State power company CFE has launched several smart grid pilot projects during political party PAN's reign since 2000, the largest of which is in Acapulco with 90,000 meters followed by another in Mexico City with 60,000 meters. The latter is set to form the model for nationwide smart grid implementation.

"Having looked at Peña Nieto's speeches and policies over the past year, although he hasn't mentioned smart grid specifically, I wouldn't expect him to change the direction of smart grid progress and indeed he could push it further if he chooses to," Testa said.

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"Even though CFE and [energy ministry] Sener are political bodies, the decisions are being made at a more technical level right now. Could a high-level political change shift things? Our sense is no," he added.

Smart grid implementation could cause some public backlash as it forces citizens who have been stealing power to suddenly pay for their consumption. Mexico has the second highest level of distribution losses in Latin America, at 17.6%, with losses in Mexico City reaching 22.8%.

Whichever party wins in 2012 it will need to clearly communicate the benefits of smart grid technology from the outset of deployment to minimize opposition, Ben Gardner, Northeast's president, told BNamericas.

"A huge benefit is improved reliability. Mexico has 25 days a year of outages. People are up in arms when there are reliability problems. You implement smart grids, you improve awareness of the grid and where there are problems in the grid, and you can start to improve the level of service that you provide in terms of reliability," Gardner said.

The level of outages in Mexico places it third to last in Latin America in reliability.