Mexican energy reform creates hope for renewables

In opening the 5^th Mirec Week in Mexico City in May, Deputy Secretary for Energy Planning and Transition Leonardo Beltrán spoke of the paradigm shift the growth of renewables represents. Mirec Week is one of Mexico’s leading renewable energy events and this year it attracted over 1,000 attendees and 40 exhibitors. The event examined the opportunities that the country’s energy reform opens up for the sector.
Deals done during the event included the signing of a framework agreement between U.S. tracker manufacturer Array Technologies (ATI) and German developer BayWa R.E., which will partner on solar projects totaling more than 1 GW in Mexico and the U.S. The ATI trackers used in the Mexican projects (specifically the single-axis DuraTrack HZ v3) will be manufactured locally.
BayWa. R.E. Regional Manager for Latin America Mario Pani revealed that his firm will shortly announce the details of Mexico’s biggest ever private power purchase agreement (PPA) for a solar project. In parallel, the private PPA market’s potential was one of the themes discussed at the show.
Overall, and reflecting burgeoning interest in Mexico’s emerging solar power plant market, tracker manufacturers had a strong presence at the trade fair. Module manufacturers like Canadian Solar, Trina Solar and JinkoSolar were also all in attendance, and competition for market share has been fierce. Jinko’s Manager for Latin America, Alberto Cuter, affirmed that approximately two thirds of the PV capacity awarded in the first clean energy tender will be supplied by Jinko.
The first clean energy tender was a central theme of Mirec, both because of the approximately 1.7 GW awarded to solar and because of the $45/MWh average tariff bid by the winning projects. Firms among the successful bidders named last March include Canadian Solar, with a 63 MW project, and Enel Green Power (EGP), which received almost 1 GW.
The tariffs of the three winning PV projects submitted by EGP were the lowest among all bidders. EGP’s Nicola Melchiotti framed the issue within the experience gained in previous tenders. “With each auction, and with the same team, we learn something new,” he said. “It’s a matter of developing a competitive value chain.” Previous tenders in which EGP has bid include one in Peru, the results of which were announced in February with EGP picking up 145 MW. The average PV tariff in the Peruvian auction was $48/MWh.
The Deputy Director for Energy Sector Finance at Bancomext, Marian Aguirre Nienau, alluded to the Peru bidding process when commenting that tariffs in Mexico’s first clean energy tender were expected to be low. In fact, many of the speakers at Mirec mentioned that the sector believes tariffs will remain low in future auctions. This year’s Mirec took place just a few days after publication of the specifications for the second long-term clean energy electricity tender, the results of which will be announced in September.
Conermex Project Manager Francisco Solís Baeza said that he expects the second half of 2016 to be a strong one for the Mexican market. Conermex has installed several flagship net metering PV projects recently, including a 324 kW system designed to meet 100% of Botanas La Lupita’s supply needs in Yucatán.
?To boost the net metering segment, which added around 50 MW of new PV capacity last year, the National Association for Solar Energy (ANES) emphasized the need to make finance available for these systems. This factor was also mentioned by the State of Tabasco’s Director-General for Energy, Carlos Reyes Abreu, who said that finance represents a “barrier” to the segment’s growth.