As battery storage continues its global development, experts point toward the ongoing COVID-19 pandemic and the risk of blackouts as drivers for its takeoff in Mexico. Nevertheless, other industry insiders point at lithium shortages and high CAPEX as factors holding the technology back. How could this segment develop in 2022?
Hooking up a storage system to energy generation projects on both the utility and distributed generation (DG) scale is still not a very common sight, although much has changed since the onset of the COVID-19 pandemic. “Prior to 2020 there were no hybrid plants in Mexico. But, as a result of the pandemic and its blackouts, there are now 300 facilities within this system,” said Sergio Rodríguez, Service Manager Mexico and Latin America, (Ginlong) Solis, to Milenio.
A significant part of the growing need for energy storage comes from the development of renewable energy generated through wind and solar, which is intermittent. “Between 2017 and 2019, we installed 2GW of solar generation capacity in Mexico but no storage capacity. This is creating imbalances in the national grid; energy storage is essential to the correct functioning of that grid,” said Manuel Garay, Mexico Country Managing Director, Power Electronics, to MBN. “Investment in generation will also detonate investment in storage because electrical grids need this type of infrastructure investment to survive the growth that is necessary for increasing energy demand. We are certain that within the next two to three years, Mexico will experience a revolution in its energy storage projects, investments and technologies and we plan to be a part of that revolution,” he added.
But not everyone sees battery storage as the crucial puzzle piece of the clean energy transition. Research from Deloitte identified several challenges to the technology’s development, factors that are also present in the Mexican market: perceptions of high prices, a lack of standardization, outdated regulatory policy and an incomplete definition of storage and what it can do are all major hurdles to overcome.
In an interview with MBN, Rodríguez sees that DG can overcome some of these hurdles on its own. Extensive regulation is no issue to DG, since the area remains mostly unregulated. The uses of storage for small systems are furthermore much more straightforward. “In any case, DG is democratizing the energy sector. With current regulation, almost anyone can have access to their own energy. For the next step, we need to see explosive growth in energy storage applications, which will empower customers during this democratization,” he said.