Spotlight: 5 big-ticket solar projects stranded in Mexico

Almost four years into the administration of Mexican President Andrés Manuel López Obrador (AMLO), dozens of photovoltaic solar projects worth billions of dollars stand suspended.

Taking office in December 2018, the president has made a U-turn in energy policy designed to negate the competition-driven framework established in 2013-14 structural reforms and restore state-owned utility CFE as the predominant force in the electric power sector.

AMLO has also urged regulators to use whatever means possible within the law to give dispatch preference to CFE generation and used the pandemic to deploy an intermittence, or "reliability," policy blocking grid connection to private renewables.

Many firms continue to do battle with these policies in the courts, but others have opted to step away from the market until legal clarity and a level regulatory playing field are restored.

Rosanety Barrios, a former regulator and now independent energy sector analyst, tells BNamericas that 1.18GW of photovoltaic solar energy projects are ready to join the grid, but have been denied access, while “another 900MW [are] in a very advanced stage of construction, but their permits have not been modified to reflect [a start date for commercial operations]."

And while AMLO and energy officials acknowledge a 2014 law requiring Mexico to have 35% of national energy generation coming from clean energy sources by 2025, significant backsliding has occurred, including government efforts to redefine what clean energy is to include hydro, nuclear and, most recently, “clean-burning” natural gas.

The president also recently declared Sonora state as Mexico’s renewable energy hub, with the Puerto Peñasco solar parks at the center, the only significant photovoltaic (PV) solar development in the works.

BNamericas’ project profile database features 22 PV solar projects now on hold and reported capex amounting to US$3.28bn, with investment in individual projects ranging between US$54mn and US$400mn.

Five of these private parks now suspended have capex of US$170mn or higher and BNamericas outlines the details of each of them.

1. La Esperanza photovoltaic project – Owner: Tequila Solar
Campeche state, Capex US$400mn, Status: Suspended, Last information: September 22, 2022

Project development is on hold due to permitting circumstances derived from the political environment in Mexico, Flavio Cházaro, Mexico country manager of Energía Aljaval, parent of Tequila Solar PV, told BNamericas. “We’re going to develop it very little until the political situation changes,” he added.

The project consists of the construction of a photovoltaic plant with 1,108,800 panels of 340Wp (watts peak) each distributed over 1,134ha in Carmen, Campeche state. 

The project also includes a transmission line that will be connected to the Tabasco-Fuerza-Escárcega-Fuerza transmission line, owned by CFE.

(A 95MW, US$104mn similarly named project, La Esperanza photovoltaic solar plant, is located in the municipalities of Apaxco, Hueypoxtla and Tequixquiac in Mexico state, and it is also suspended).

2. Loma Roja photovoltaic park – Owner: Energías Renovables Venta III (Iberdrola Renovables México)
Puebla and Tlaxcala states, Capex US$336mn, Status: Suspended, Last information, June 13, 2022

Mexico’s environmental protection agency Semarnat denied environmental authorization for the project, warning that it affects three wetlands, as well as other bodies of water and surface runoff. 

It should be noted that Iberdrola’s operations in Mexico have become a favored target for AMLO's anti-corruption rhetoric as an alleged, but unproven symbol of past administrations' corruption and trafficking of influences.

Although the Iberdrola did provide hydrological studies and present mitigation measures for the water factor, the hydrodynamics of the wetlands delimited by Conagua remain a factor of uncertainty moving forward.

The project consists of construction of a photovoltaic park with an area of panels, step-up and switching substations, and transmission and interconnection lines over a total area of 576ha.

A part of the transmission line, the interconnection line and the switching substation will be located in Cuapiaxtla municipality, Tlaxcala state, while the rest of the project elements will be located in San José Chiapa municipality, Puebla state.

3. Guadalupe Sarabia PV plant – Owner: Framor Solar Plant 2
Puebla state, Capex US$231mn, Status: Suspended, Last information, June 14, 2021

The Framor Solar Plant 2 asked Semarnat to stop the evaluation to obtain environmental approval to install the project.

So far, the company has not reported whether the project will be halted definitively or whether the decision to stop processing the environmental impact statement involves an adjustment to the initiative, local daily La Jornada de Oriente reported.

The project consists of the construction, operation and maintenance of a 645ha photovoltaic plant located in the northeast part of Puebla state, 85km from the city of Puebla, in Tepeyahualco municipality.

4. Yermo solar park – Owner: Mexico Lindo Solar PV
Durango state, Capex US$231mn, Status: Suspended, Last information: May 24, 2021

The project is suspended, Carlos Lastra, project development coordinator at Energía Aljaval, the parent company of México Lindo Solar PV IV, told BNamericas.

The executive did not provide further details about the initiative.

It consists of the construction and operation of a solar park, distributed over an area of 387ha. It will be located at km 79 of state highway 49 Gómez Palacib-Chihuahua, 80km from the city of Gómez Palacio in Mapimí municipality.

5. Jalisco solar park – Owner: Proyecto Solar Jalisco
Durango state, Capex US$170.5mn, Status: Suspended, Last information: November 24, 2021
The project is suspended due to the political situation in Mexico, which is preventing further development, Alejandra Dominguez, general director of Sowitec Mexico, parent of Proyecto Solar Jalisco, told BNamericas. The executive did not provide further details.

The project calls for the development, construction and operation of a photovoltaic park with the installation of 680,400 photovoltaic panels on an area of 599ha in the municipalities of Ojuelos de Jalisco and Lagos de Moreno, Jalisco state.