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News Article

The Future of Hybridization in Mexico

By Antonio Gozain | Wed, 09/01/2021 - 17:05

You can watch the video of this panel here.

Hybrid energy projects – the integration of renewable energy generation technology with traditional energy generation systems – are growing in popularity across the world. Industry experts agree that affordability, reliability and sustainability make these systems an ideal alternative for Mexico.

“With hybridization and battery storage, you basically store excess of energy that is generated with renewable power in batteries or, potentially, in other types of fuels in the future. It is incredible what we can do, putting emissions down while having very reliable, economical and efficient systems,” said Raúl Carral, Business Development Latin America North at Wärtsilä.

Hybrid systems combine renewables and fossil fuels efficiently and in the most economical way. “Today, the cheapest energy comes from renewable sources. Their penetration will only increase due to economic reasons,” said Carral, who explained that the problem to solve is the intermittency and reliability of these sources. Hybridization offers a solution through the combination of cheap energy from renewables and flexible generation, which comes from power plants based on natural gas and future fuels, such as hydrogen, that are mainly generated via green sources.

Mexico’s need for hybridization has to do with the market’s commitment to support renewables and to boost transmission systems’ capacities. “When there is less capability in the transmission system or a lacking commitment to the introduction of renewables, we start leaning toward solutions that are closer to load points. The closer we get to the load, the more reason we have to move toward hybrid solutions that could better fit the demand profile,” said David Fatzinger, Vice President and Country Manager Mexico at Invenergy LLC.

Behind-the-meter storage remains crucial in the balance between renewable energy and fossil fuels. “It provides flexibility; you can do a lot with the storage to shift the generation to your peak hours or you can use it for stabilizing supply of electricity. We used to always focus on the largest generation assets because they were the most efficient and that drove us to these large wholesale solutions. The smaller generation options, however, are now getting a lot closer to the efficiency of large generation systems, making them a more adequate option. As the battery cost comes down, we will see more hybrid solutions closer to the load,” said Fatzinger.

According to Carral, power plants can now turn on an off very efficienty, even considering variations in load and generation. “If you compare this to large combined cycles, today we can achieve even better performance. It is incredible what you can do today with a lower investment,” he said.

Hybridization in the Mexican Market

Currently the big discussion in Mexico is the future of renewables in general. “We look for a balanced energy dispatch that allows greater renewables participation,” said Bruno Riga, Country Manager Mexico at Enel Green Power. While there is big potential in the Mexican market, a clear regulatory framework and requirement standardization is needed for hybridization to consolidate in the country.

Wind and solar, in particular, are mature enough to cover the technical, commercial needs in the industry when working together with storage technologies. “Hybridization of power plants promises to increase the load factor thanks to complementarity, improving the stability of the electricity supply and speeding up connection times,” said Riga.

Enel Green Power is already exploring the possibilities of building these kinds of flexible power plants in other countries, according to Riga: “We are leaders in hybrid renewable energy storage projects, with five plants under construction in Texas, which are part of a big business plan in the US. We are also exploring new opportunities in other country, such as Chile, where we operate a photovoltaic solar park coupled with a wind farm.” Positive as this may be, companies like Invenergy, Wärtsilä and Enel also have the responsibility to those kinds of examples to Mexico to help the country move forward, according to Fatzinger. “This is especially true when introducing technologies that still are not well defined in the country.”

With isolated renewable projects across Mexico, there are opportunities both in adding hybrid elements to existing projects and building new ones right from the start. “If clients really understand the way they use electricity, then they will probably come up with a new hybrid solution. Those are opportunities for a one-stop solution. If you are not completely aware of the way you use electricity, then staging into a solution over time will make sense,” said Fatzinger.

Enel is already advancing toward hydrogen, another element that could play a role in renewable energy projects in Mexico. “Hydrogen is best used as a complement to electrification and it can support the decarbonization in some industries. It needs to be 100 percent produced from renewable sources to reduce the impact of carbon. The main problem today is its cost, but advancing technology and hydrogen’s competitiveness, this may be a big opportunity for Mexico,” said Riga.

Antonio Gozain Antonio Gozain Journalist and Industry Analyst