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Industrial DG Projects Grow Rapidly in Northern Mexico

By Cas Biekmann | Wed, 12/08/2021 - 08:41

In the North of Mexico, on-site power production using solar panels is becoming the go-to option for industrial energy users. As a result, business is booming despite lingering uncertainty. For instance, Solar installer Enlight increased its sales 35 percent between 2020-2021.

Distributed Generation (DG) refers to behind-the-meter energy installations, used to generate power on a smaller scale, close to its point of use. In Mexico, a country blessed with excellent solar radiation, projects below 0.5MW do not require permitting. This provides another key advantage next to its technical and economic viability, which is boosted by advanced technology and dropping costs. Permitting has slowed down to a glacial pace due to the López Obrador administration’s efforts to reorient the energy sector. Since DG solar is considered to be an asset to the stability of the grid rather than a detriment, most of the factors creating this uncertainty do not apply.

“From 2019 to 2020 it had a very large growth because there was an important change in the company, we stopped doing low-voltage, residential and commercial projects, and we focused on industrial ones, despite the pandemic. In 2020-2021, we had a 35 percent growth in sales,” Manuel Ahumada, Commercial Director, Enlight told El Economista.

Ahumada highlighted that DG can achieve energy savings as high as 40 percent for some companies compared to standard rates. As an added benefit, their energy use would be completely clean and therefore boost the operation´s sustainability. Nevertheless, solar energy’s inherent intermittency is an issue that needs to be dealt with.

In any case, the uncertainty in the energy sector coupled with a need to source clean and cheap energy could very well drive more end-users to DG solar, say industry experts.  "Our industrial customers say they will no longer be able to make purchases from the wholesale market, nor do a wind or solar park. They have no choice but to use solar energy,” Ahumada said.

“Electricity prices will rise toward the midterm if the reform goes through because CFE is a less efficient power producer. Indirectly, this will push more people toward DG, especially if qualified users and self-suppliers are pushed out of their markets,” said Mauricio Chapa, Managing Director, Tecsolar to MBN.

Perhaps the most exciting part of DG is how it puts the power to produce clean energy right in an offtaker’s hands, even if it is only used as part of the energy mix. “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,” Sergio Rodríguez, Service Manager Mexico and Latin America, Solis told MBN.

The data used in this article was sourced from:  
El Economista, IHS Markit
Cas Biekmann Cas Biekmann Journalist and Industry Analyst