Mexico aiming for 20GW of distributed generation by 2030

Thursday, June 1, 2017

According to Mexico's energy transition program, published this week, the country has the potential to install 19,780MW of distributed generation (DG) from solar by the year 2030.

The program outlines the actions to be taken in accordance with the energy transition law, which sets out the country's clean energy goals to 2050.

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The energy ministry bases its estimations on reports published by the International Renewable Energy Agency's (IRENA), which place the country's DG potential by 2030 at between 11.3 and 19.7GW. In a nearer term outlook, Mexico's energy regulatory commission (CRE) estimates that installed capacity could reach 2.2GW by 2022, a level that had been forecast for 2028 prior to the country's energy reform.

Also read PROJECT FINANCING: New fund to invest in Mexico's distributed solar energy

Mexico's solar power generation capacity increased from 30MW in 2011 to 170MW in 2015, and is poised to expand at an even faster rate as a result of the electric power auctions in March and September of last year, the results of which create a forecast of a 3,757MW installed solar capacity by end-2018.

Solar dominated the second power auction, accounting for 54% of the total capacity awarded, and with the average price for solar at US$33.47/MWh, and is also expected to dominate the third auction, which will be held in November.

Also read: The challenges facing Mexico's power sector as 3rd auction launches

"DG can bring many benefits to the national grid if it is planned properly," according to the text of the energy transition program.

"The energy reform seeks to cultivate DG by improving the legal, regulatory and rule framework, facilitating its integration into the grid via regulations that ensure consumers using solar panels and other generation technology can connect quickly, and regulation that allows them to sell surplus electricity to [state utility] CFE at regulated prices, or sell to other suppliers at market prices," it states.

Also read: Opportunities and challenges abound in Mexico's DG sector

Self-supply and DG will experience rapid growth in Mexico as companies seek to source energy from players other than CFE, panelists agreed during an energy conference in Mexico City in mid-May. The country is "well on its way" to establishing self-supply for the C&I sector, and the groundwork is in place for such a market to grow, Clay Butler, CEO of 7X Energy, said.

But challenges persist for private generators trying to participate in the market, Francisco Granados Rojas, deputy general manager at the energy regulatory commission (CRE), said at the time.

The CFE has been accused by solar industry representatives of delaying the paperwork for private solar installations, and has claimed the utility is not complying with the procedures outlined in the manual for distributed generation, which was published in February