Mexico’s Wind Project Pipeline Dries Up

The country has eight wind power projects in limbo due to lack of authorization for the sale of the electricity generated

Mexico's wind power development is becalmed.
March 16, 2022 | 03:20 PM

Mexico City — Mexico has run out of new wind energy projects, according to the country’s wind power association AMDEE, as the government seeks to change the Constitution to reorganize the country’s electricity sector.

Leopoldo Rodríguez Olivé, president of AMDEE, which groups together 52 associated companies in the sector, said the country does not have any more projects on the radar, with the exception of a handful that have already been built but which are pending commercial authorization, and which would add a further 800 to 1,000MW to the country’s wind generation capacity.

“That’s all there is for the next few years, while the sector is not reactivated and there are no clear rules, there are no authorizations for new projects,” he said during the Mexico WindPower 2022 forum.

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The 69 wind power plants already operating in Mexico represent 9% of the country’s total installed generation capacity, equivalent to more than 7.2GW.

Read More: Renewables Oversupply is Mexico’s ‘Gravest Energy Problem’

Rodriguez told Bloomberg Línea that there are eight wind projects in the pre-operational testing phase and ready for testing, pending authorization by the country’s energy regulatory commission CRE, plus one wind farm that is under construction.

“It may be a bit misleading that in recent years we have continued to see the incorporation of new capacity,” Rodriguez added.

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President Andrés Manuel López Obrador’s electricity reform intends to give control of 54% of the electricity market to state-owned utility CFE, and the remaining 46% to the private sector, which implies canceling contracts, permits and certificates held by the private sector.

The government argues that the increased generation of renewable energy puts the reliability of the national grid at risk, while private companies’ electricity generation models, such as self-supply, cause multi-million-dollar losses for the CFE.

Read More: Half of the Projects in Mexico’s $25B Infra Package Delayed Or Shelved

AMDEE’s president recalls that Mexico’s goal is to generate 35% of its electricity with clean sources by 2024. Today the total is 29%, with an additional 9.5GW needed, and which would require an investment of $10 billion.

“If we could incorporate at least half of that 9.5GW then that means at least half of that generation capacity is contained in projects that could be developed,” he added.

Read More: Say Goodbye to Clean Energy’s Era of Constantly Falling Prices

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Meanwhile, the CFE’s renewable energy strategy is focused on the refurbishment of hydroelectric plants, the construction of the largest photovoltaic plant in Latin America, geothermal plants, and a pilot program for green hydrogen, which are insufficient for the country’s needs, according to Rodríguez.

Ramón Fiestas, president of the Global Wind Energy Council (GWEC), warned however that if Congress approves the electricity reform, Mexico will lose $3 billion annually in private investment, without considering the affected investments in solar photovoltaic energy.

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