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News Article

CENACE’s Measure Blocking Renewables Halted at the Last Minute

By Cas Biekmann | Thu, 05/14/2020 - 18:16

CENACE’s move to indefinitely halt new green energy projects is at the forefront. In other news, Mexico’s great potential for distributed generation, some of Industry 4.0’s developments for solar energy and the benefits of natural gas in economic development are discussed. Read it here in your weekly roundup!

Bloomberg: CENACE’s Move to Indefinitely Halt Renewable Projects Blocked at the Last Moment

Actions taken by the Mexican government’s CENACE to bar new green energy projects from being connected to the grid have been stopped at the last minute, reported Bloomberg News. This is based on documents and e-mails viewed by the international news agency. CENACE’s measures included halting crucial tests for renewable projects, without which they could not be connected to the grid. CENACE said stopping the tests was needed so the control center could stabilize the grid in difficult times induced by COVID-19. Private players, however, identified the measure as a way to hold back competition so state-owned CFE could gain advantage.

Energía a Debate supports the news, reporting that SENER urgently requested the publication of the agreement in the Official Gazette of the Ministry of Internal Affairs. Nonetheless, both the National Commission for Regulatory Improvement (CONAMER) and the authority of the Official Gazette, refused to do so without due discussion. Bloomberg now adds further importance to what this discussion entails.

If the measure is indeed halted, it will relieve tension that has been building up on the issue. Yesterday, the Federal Antitrust Commission (COFECE) published an opinion via law firm White & Case. In this opinion, COFECE argued that the measure was disproportional and urged CENACE to reconsider. It hinted at further legal action if CENACE were to go ahead.

Strains between Mexico’s public sector and private renewable energy players have stirred since President López Obrador took office. These rifts occurred soon after cancelling new renewable energy auctions and attempting to open up clean energy certificates, or CELs, to older and more polluting CFE power plants, diminishing their value according to the private sector.

How Can Industry 4.0 Support Solar Energy?

Solar tech is in a state of constant innovation, with records for efficiency being broken constantly. As the world shifts to Industry 4.0, Mexico’s own solar sector stands to benefit from various innovations.

According to the International Journal of Energy Research, Industry 4.0 is marked by ‘smart plants’, in which all separate units are interconnected through IoT. AI helps units operate on their own, whereas machine learning makes the entire process ever smarter. While it is certainly not yet possible to run a photovoltaic park remotely and without staff, operations can run and be more cost efficient by reducing staff and tracking where maintenance is needed.

Some players at the forefront of Industry 4.0 are Huawei, Solean and the Swiss town of Walenstadt. Huawei developed its first AI-based solar inverter in 2019 and is planning to shift operations toward AI with more of its solar business. Solean is a French startup aiming to automate the entire production process of PV panels, which is especially interesting in times of COVID-19. By applying blockchain, the Swiss town Walenstadt has an entire neighborhood participating in a solar power trading market. This technology opens up space for micro-suppliers to generate money from their surplus energy and could for instance be applied in Mexico’s increasingly important distributed generation.

Distributed Generation: Mexico’s Best Energy Bet?

For Mexico, distributed generation presents many opportunities, especially with CENACE’s policy plan to stall new renewables projects. Nevertheless, it does present unique challenges, for which both private and public sector will need to work together to provide adequate solutions. Generating energy with small, distributed systems in the domestic industrial sector and in SMEs is a great alternative for the solar industry in Mexico, agreed panelists at the Mexico Energy Forum 2020. Even large players such as LONGi Solar are interested, confirmed Mexico Country Manager Iván Reyes in an interview with MBN.

One major hurdle to overcome is the current 0.5GW limit, under which projects do not need to ask permission to CRE to operate. If this could be raised to 1GW, distributed generation could become a force to be reckoned with in the Mexican context, say industry experts. In the Chamber of Deputies, people like Hernán Salinas recognize distributed generation’s highly positive socioeconomics. “Distributed generation is a way to reduce energy poverty that affects around 12.4 million Mexicans. This type of generation has the ability to provide access to electricity in communities far from the main generation areas,” he said.

Natural Gas a Driver for Development

Although solar has great socioeconomic potential, natural gas is an important driver for development as well. Its low costs and potential for further spread around the country are promising. Furthermore, it serves as the basis of several beneficial actions, such as Naturgy’s free supply to Mexico’s hospitals and Fundación GLP Transforma’s humanitarian aid, providing a supply to people affected by poverty.

The data used in this article was sourced from:  
Bloomberg, Energia a Debate, Greentech Media
Photo by:   Analogicus
Cas Biekmann Cas Biekmann Journalist and Industry Analyst