AMLO Announces Solar Energy Plant in Sonora

With the approval of the Puerto Peñasco solar energy project in the northern state of Sonora, President Andrés Manuel López Obrador (AMLO) will finally be  connecting Baja California to the national energy grid. CFE will own 54 percent of the new solar plant while the remaining 46 percent will be owned by the Sonoran government.  

The project itself will be built on almost five thousand acres located in Puerto Peñasco, and after its projected completion in December 2023, it will be the 8th biggest solar field in the world. The photovoltaic plant would generate 1,000 MW to power over four million homes and businesses in the region. Far exceeding the 754 MW field in the neighboring state of Coahuila that was inaugurated in 2018. More importantly however, with the building of much needed transmission lines in a highly congested area, the project would finally help the previously isolated Baja California connect to the energy grid.  

This will mitigate, if not remove, regional foreign dependence on natural gas; which has proved itself to be unreliable in the face of challenges brought about by climate change. As overserved earlier this year, after Texas’ energy grid crashed which had reverberating effects on the Mexican energy sector for days. Additionally, it will also keep moving Mexico away from the use of hydrocarbons and towards renewable energy despite AMLOs continued focus on carbon fuel industries.  

The geographic characteristics of the region had been recognized by the UNAM as having the largest solar generation potential. This is supported by a recent S&P study, which found that only one percent of the state’s territory could produce all of the 50 GW/h needed to power the entire country. According to the industry, current photovoltaic production capacity stands at 7,000 MW; which is more than is used in the region, hence highlighting the urgent need for transmission and storage infrastructure. 

The project is still very much in its early stages considering permits and finances have yet to be defined. Preliminary estimates currently require a US$1.685 billion investment to get the project off the ground. According to Alfonso Durazo Montaño, future governor of Sonora, the business venture will be self-sustaining, given that CFE can count on National financing, namely, the Bank of Commercial Exterior, Banobras and or other financial institutions.  

Outside observers however, doubt the projects potential. Considering an interconnection line project in Baja California with a similar price tag was canceled earlier this year is discouraging for starters. Nor is it clear that funds from the cancelled project would be redirected to this new one. In light of this, it is best to wait for fiscal budget reports to see whether the project is included in federal spending, until then it’s a pipe dream.