Mexico

With the International Energy Agency publishing its latest five-year clean energy forecast today, pv magazine takes a look at the solar content of the 162-page document.

Since President Andrés Manuel López Obrador’s election at the end of 2018, renewable energy in Mexico has faced an uncertain regulatory environment. The current government is focused on restoring the power and influence of Mexico’s state-owned energy companies. But it is now at a crossroads, as the previous administration aimed to open the segment up to foreign investment. Maria Chea of IHS Markit examines the policy decisions the government has taken this year and how these have soured private investor sentiment. These changes will likely weigh on utility-scale PV procurement in the country through 2024.

It has already been a complicated year in terms of private investments in Mexico’s energy sector. And for solar, a lack of policy certainty and a government supportive of the fossil fuels industry are serving to further muddy the waters for projects already in development, while putting the brakes on any new plans.

With the government having already introduced measures which will reduce the volume of renewables in the national energy mix, further new provisions will restrict the deployment of energy storage and the ability of solar energy generators to sell excess power to nearby consumers.

The Comisión Federal de Electricidad will invest around $342 million into two PV plants with a total generation capacity of 350 MW at its geothermal facility in Baja California. President Obrador, meanwhile, has described the previous regime’s Energy Reform program as a ‘pillage policy.’

Mexico’s Federal Electricity Commission (CFE) is seeking approval to develop 350 MW of solar in the state of Baja California. The arrays will be built on the same site as the 820 MW Cerro Prieto geothermal project. However, it remains unclear whether the PV installations mark the company’s formal entry into the solar business.

The solar manufacturer has landed its biggest engineering, procurement and construction services deal and will work on solar facilities in Europe and Latin America which will come online before 2023.

The new measure mainly applies to wind power and other renewable energy sources, as most of the country’s solar capacity was deployed after 2014, when the energy reforms were implemented.

The levelized cost of energy generated by large scale solar plants is around $0.068/kWh, compared to $0.378 ten years ago and the price fell 13.1% between 2018 and last year alone, according to figures released by the International Renewable Energy Agency.