IEnova, IFC Develop Large Battery Storage Project in MexicaliBy Cas Biekmann | Thu, 06/24/2021 - 09:43
IEnova and the International Finance Corporation (IFC) revealed that they are to develop an initial 100MW battery energy storage system (BESS) in Mexicali, Baja California. The project will be developed in phases and could eventually yield 500MW of storage capacity. IEnova’s project represents another meaningful step toward widespread battery storage adoption in the Mexican market.
The Volta de Mexicali (VDM) BESS Project aims to “promote the development of renewable generation projects and maximize the benefits of sustainable finance,” reported IEnova in a press release. The storage project will be connected through a cross-border transmission line that IEnova already owns, providing energy to the California Independent System Operator (CAISO). Since the CAISO system features a high amount of intermittent renewable energy capacity, sufficient backup power to ensure stability is crucial. IEnova is no stranger to cross-border energy projects, as it has developed a wind farm operating in Mexico to deliver energy to the US already.
IEnova said the first 100MW phase could reach final investment decision as soon as mid-2022, after which it could start commercial operation in mid-2023. During the stages before the final investment decision, IFC will support IEnova with market and interconnection studies, as well as optimization of operational models. IEnova’s sustainable financing framework is used as a basis for the project. "In an era that requires urgent action in favor of the environment, IEnova is once again positioned as a leader in the Mexican energy infrastructure sector, on various fronts: sustainable financing, innovation, research and development, and substantial efforts towards the diversification of the energy matrix and its decarbonization,” said Tania Ortiz, CEO of IEnova, who lauded the company’s strategic alliance with IFC as well.
“With extensive global experience in sustainable financing, IFC is well-positioned to advise IEnova on the development of its Financing Framework Linked to Sustainability, a key step that solidifies the company’s strategic commitment to its sustainability objectives,” said Juan Gonzalo Flores, Country Manager for Mexico at IFC. Flores added that the companies hope to replicate this approach in various other markets.
BESS systems are still somewhat of a rarity in the Mexican context. Not too long ago, Gauss Energía’s Aura Solar III was the only utility-scale power plant that incorporated battery storage. Last year, Wärtsilä’s addition to Eolica Coromuel joined the fold, and Invenergy’s La Toba storage plus solar project is a further promising development: “We are hoping to see the project become a key resource for CENACE,” said David Fatzinger, VP and Country Manager Mexico of Invenergy in a recent Mexico Business News interview. Experts highlight that the lack of a clear regulatory framework for battery storage in Mexico is curbing the development of the technology, but some companies move ahead with their plans regardless, relying on international best practices to ensure optimal results.