Going Ahead with Developments Despite BarriersWed, 02/24/2016 - 12:40
Q: Which segments of the energy industry represent your highest priorities?
A: EOSOL’s team was tasked with developing the solar park for Chrysler in 2008 and since then it has not looked back. Our main focus in Mexico has been in the solar sector. The country’s potential is undeniable, yet clearly other technologies shine brighter in the eyes of the authorities and, unfortunately, the solar sector has fallen behind. In the past year alone, 110 projects were awarded permits by CRE and only one project is operating, which is Tai Durango. From our point of view, the panorama brought about by the Reform brings home one clear message: natural gas is the energy source of choice. It seems that the Reform was not designed for the healthy development of renewable energies and the sole advantage it could have garnered, which is the CELs, has also been given to natural gas. Short-sighted policies do not favor anyone and it is necessary to have clear laws that delineate a precise energy transition. If this does not occur, the country will become an importer of energy and its energy security will be compromised. Our commitment to Mexico’s solar sector remains undeterred. In fact, this year we have added an additional 55MW, which demonstrates our faith in the clear road the sector will have ahead.
Q: How can solar players like EOSOL support the evolution of batteries and similar technologies?
A: The solar sector and its players play a hand in encouraging innovation in energy storage and batteries. One of the industries that have fostered R&D is the automotive industry with electric vehicles. The automotive industry has been called a leader in innovation. Frankly, the energy industry and the solar sector in particular have made leaps and bounds in R&D that far outmatch the automotive industry. The most prominent innovation is in the advancement in PV where the prices dropped dramatically, thus increasing competitiveness. The energy transition must occur before the last drop of oil disappears, and the public sector must be equally innovative and proactive in policy making.
Q: Tai Durango is an emblematic utility-scale project in Mexico. What did EOSOL do differently to ensure its successful development?
A: Mexico is a country worth betting on, and Tai Durango is a reflection of our commitment. In fact, the project was developed with our own funds and the subsequent stages, two, three, four, and five, will also be financed from our own funds. Right now the investment stands at US$100 million and we have three Spanish investors. In a sense, it is the foreign players and investors that are betting more heavily on the success of Mexico rather than the locals. The first stage has 17MW and the next stages will have an accumulated capacity of 50MW, creating a grand total of 67MW. The three levels of government have been very supportive in the development of the project. Initially, we were eyeing Baja California as a potential destination, but that was before the Secretariat of Economic Development of Durango approached us and we began a dialogue. The government has facilitated the process, and while there might not be any clear incentives for renewables, we are content as long as there is a favorable political environment.
Q: What role can energy players play in encouraging state governments to develop strong energy programs and strategies?
A: All industries develop thanks to energy, since it represents the foundation of everything. Almeria in Spain is a good example of this, as the region was one of the poorest in the whole of Europe. However, 25 years ago it decided to bet on renewables and greenhouses, making it now the largest horticulture reserve in the whole of Europe and an important contributor to the country’s GDP. We need a clear regulatory framework and norms that do not confuse the sectors and the technologies. EOSOL has placed enormous faith in Mexico in the hopes that 4,000MW can be developed and that we can obtain 10% market share. Even so, the government is not placing enough emphasis on the development of the sector and renewables. For example, the duty placed on the importation of solar panels does not incentivize the local industry, nor does it help develop the projects. Everything make us think that this Energy Reform is not a green reform, but we still have to see the final regulation. Regardless, EOSOL has seen that a window of opportunity will open and that prospects will arise.