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Insight

Diversification Spells Success for Developers

Wed, 02/24/2016 - 18:13

While Oaxaca is considered a haven for wind energy, seed firm Mexico Power Group decided to diversify its strategy in the country and stick to the northern territories. Instead, the company will focus on its three current projects in Baja California, Zacatecas, and Tamaulipas. These will be carried out under the old framework, which is the self- supply mechanism, and the permitting projects have been completed. The transition into the new regulations introduced by the Energy Reform has been made easier for the company, according to Director General John Prock, by the possibility of transitioning back to the old scheme should the new framework prove inviable.

The company’s decision to avoid Oaxaca was due to the infrastructure and the availability, since there is no local load and everything must come from the north. “Our projects in the center of the country have local loads in some circumstances, and in the north of the country there are consumption centers,” says Prock. “We anticipate that this market place will incentivize both producers and consumers to stick to their own node.”

This year offered the group a window of opportunity to concentrate on land and wind measurements and the company is open to all development options, including solar and hybrid projects. Maintaining its power play for the north, Mexico Power Group is also developing long-term products in Chihuahua, Veracruz, and Nuevo Leon. Prock believes that these projects will depend on the demand of the market, but since the project in Nuevo Leon is close to the node center of Monterrey, there are opportunities for hybrid projects, combining renewable energies with cheap fuels like natural gas to create a blended product that meets green standards. “If the company were to enter the solar sector, it would be through hybrid projects,” says Prock, adding that now the new regulations allow companies to compete with CFE, everyone is considering the potential of combined cycle plants.