Speaking to pv magazine, SEGH president, Donald William Walter says that despite the enormous potential for photovoltaic energy generation in Mexico, there is currently only one 5 MW "test" project in the Baja Region for the Comisión Federal de Electricidad (CFE). "Our project, along with one other photovoltaic project in Baja, are the first utility-scale projects in development," he explains.
Construction on the around US$80 million SEGH-CFE 1 project started in late June in Puerto Libertad. "It includes what we believe, to be the largest energy storage system for a renewable project in the hemisphere. The project is being financed by a blend of private equity and debt," explains the SEGH president.
SGEH also began working with ABB in June to design and build a 40kVA substation for CFE. It is expected to be on site by next July.
The company would not disclose the suppliers of the equipment for the new plant. "All I can say for now is that the substation, interconnect and commissioning are being provided by ABB. Engineering services and all equipment (except for panels and trackers) are being provided by American Electric Technologies Inc. of Houston, Texas," continues Walter.
A 20 year PPA has already been signed with CFE, which should see SEGH receiving around US$0.18/kWh in the plants first year of operation.
Responding to how SGEH convinced CFE to award a small producer permit to SEGH-CFE 1, the first utility-scale, privately-owned photovoltaic project in Mexico, Walter says, "We have the land; a proven technology; an experienced team; development money; and we knew how to follow the rules."
Land, in particular, is said to play a key role in project development in Mexico. "Significant legal restrictions exist on land ownership within federal areas," says Walter, who adds that having recognized its importance early on, SGEH purchased strategically located properties in the country, in order to develop more photovoltaic projects for CFE.
Overall, the company intends to install "dozens" of plants and has already begun the permitting process for several other projects.
"Mexico is the most efficient and potentially profitable place in the world in which to conduct photovoltaic business. The [PPA] model works here. And, as long as the model is not revised under pressure by either environmentalists wanting more green energy or bloated, greedy photovoltaic development companies crying for feed-in tariffs the short and long term prospects are, well, sunny," states Walter.
He adds that the U.S. and European trade cases against photovoltaic exports from China have created a great opportunity for Mexican and Latin American/Caribbean project developers. According to Walter, "the federal governments of China, Taiwan and Korea have agents all across Mexico offering low priced products."
Edited by Becky Beetz.