2GW Of Experience, Innovation and Sustainability

Q: What are Enel’s key success factors in Mexico?

A: From the outset of our venture in Mexico, which began in 2008, Enel’s story has been marked by the innovations we introduced to the market. As showcased by the first two long-term electricity auctions, Enel displayed continuity in its disruptive financial processes and components within its proposals compared to the usual market behavior for the third long-term electricity auction. One of the keys of our success lies in the long and prosperous relationship we maintain with our suppliers. The fact that Enel Green Power is a renewable energy leader in the country, with 728MW of installed capacity and 1,285MW under construction, enables us to move large volumes. Our 10-year history in Mexico ensures we can rely on strategic partners with whom we exchange the best solutions available in the sector.

The four wind power projects we were awarded in the last long-term electricity auction are a testament to our commitment to top-tier technology, including larger and more efficient wind turbines by market benchmarks. Our track record of successful results has won us the confidence of both national and international markets, unlocking optimal financial conditions. Adding up all these factors equals a highly competitive economic offering, on par with the requirements of Mexico's utility-scale projects.

Q: What are your expectations and ambitions for future long-term electricity auctions in Mexico?

A: The auctions published and executed by the Ministry of Energy and CENACE are an excellent instrument for the construction of new renewable energy projects. In the three editions completed so far, Enel Green Power was awarded close to 1.6GW, making it the largest winner across the board. We have all hands on deck to turn the first auction projects into soon-to-be operational additions to the grid. Projects such as Villanueva, advancing at a record pace, will become the continent’s largest PV park and Enel’s largest worldwide. 

These landmarks will contribute to demonstrating the successes both the public and private sectors are achieving in the design and execution of bankable renewable energy projects. 

Our expectation for the future is to maintain our leadership position in Mexico pertaining to renewable energy, both in terms of installed capacity and project portfolio. We believe that the transition of Mexico’s energy market from a matrix dominated by fossil fuels to greener energies is proving to be successful and will continue to do so in the future.

Q: What are your plans for Mexico’s spot market?

A: Without a doubt, Mexico’s Energy Reform has opened a wide spectrum of opportunities and a sizable field of potential investments for which Enel has always shown interest in participating. At present, we are focusing on two main areas. First, power generation. Enel Green Power Mexico is determined to become the country’s largest renewable energy producer and a commercial leader in energy trading, with a bilateral contract portfolio nearing 2TWh per year to supply electricity to the largest commercial and industrial groups in Mexico. Second, we will keep strengthening our qualified supply division, Enel Energía México, officially launched in October 2017. Through this new division, we offer electric energy, power, CELs and other energy solutions for companies with an electricity demand larger than 1MW per year and looking to comply with the soon-to-be compulsory requirements for consuming electricity provided by clean energy generating technologies starting in 2018.

Q: What is Enel’s investment portfolio status and how will it evolve in 2018?

A: Since we set up operations in Mexico, we have invested close to US$2.7 billion just on generation plants. The investment required by the four awarded projects we won during the third long-term electricity auction amounts to another US$700 million. Both numbers demonstrate Mexico is a strategic market for Enel Group.

Q: Could you give us an update on Enel’s soon-to-be operational projects for 2018?

A: Enel’s 754MW PV solar plant in Villanueva, Coahuila and its Don José 238MW PV solar plant in Guanajuato, awarded during the first long-term electricity auction, will begin operations in 2018. The same can be said for our Amistad, Coahuila wind farm with 200MW of installed capacity, the fruit of a signed PPA. This means that before the end of 2018, Enel will be contributing to Mexico's energy transition efforts and goals with close to 1.2GW of additional renewable energy capacity connected to the grid.

Q: What project best attests to Enel’s expertise in selfsupply, and how is Enel increasing this business line in Mexico?

A: Enel Green Power supplies electricity to more than 17,000 client-owned load points, a significant contribution to consolidating our leadership in renewable energy. Our ambitions in self-supply will be covered by Amistad, our PPA wind farm. Through our qualified supply division, Enel Energía México, we will develop new ways to answer our clients’ needs with our characteristic elements: experience, innovation and sustainability.

Q: How would you rate the progress of the long-term auctions?

A: The Energy Reform has been positive for the sector and the auction system, in particular, has established a catalyst for the growth of renewable energies. When renewable projects such as Villanueva or Don José become operational, we will be in a position to showcase the first fruits of the auctions, providing a tangible argument in favor of the auctions’ success. While we cannot speak for other projects, we can assure that projects won by Enel Green Power will be operating under the stipulated time-frame.

Q: What is your assessment of congestion risks in permitting processes due to the large number of projects arising in Mexico?

A: We are fully confident in the capacity and faculties of Mexico’s authorities, as they were able to implement an ambitious Energy Reform in record time. Enel’s global experience has shown that such a complex paradigm shift as the one we are living now requires both time to mature and adaptation processes, making this potential congestion a natural process of any major transition. It is vital that the agencies in charge of these processes continue implementing improvement measures to avoid delays that impact the sector’s value chain as a whole, including Mexican society.

Q: How can Mexico manage renewable intermittency given its current electric infrastructure?

A: Intermittency draws attention to the necessity of a diversified energy mix. Enel Green Power’s four wind power projects won in the third long-term auction complement other projects using solar PV technology that were also awarded. We believe wind power can effectively answer solar power’s inherent intermittency. We are aware of the challenge that renewing and extending Mexico’s electric transmission grid entails. We also know the country’s authorities are aware of the importance of this factor and that they are working tirelessly to improve conditions in the short term.

Q: What positive impact will Enel have on Mexico’s energy market in 2018?

A: Enel Green Power is always aligned with its three trademark characteristics: experience, innovation and sustainability. Those are the three guiding principles with which we want to impact Mexico’s electricity market in the long run. The cumulative experience from operating in 30 countries enables us to set the course opened by the reform. We can bring expertise and experience from diverse markets to ensure, from the private sector, the best implementation and benefits for Mexico as a whole. Innovation is a major element in the disruptive moment we are experiencing. As a group, we are aware of this and are constantly exploring new ways of doing things, always focusing on our clients. We want to bring new and better practices.

Our commitment to sustainability will enable us to guarantee that the benefits from all our initiatives will spread evenly among all parties involved, including local communities. Enel Green Power integrates into the development of every project with which it is involved the sector’s entire value chain by implementing economic, social and environmental best practices. Our objective for 2018 is to use our identifying characteristics and leadership to guide and develop Mexico’s energy sector toward the best possible outcome.

Enel Green Power  is the renewable energy division of the Enel Group,  present in 30 countries. Enel Group is a global leader in the green energy sector with a managed capacity of around 40GW including wind, solar, geothermal, biomass and hydropower.