Mexico's Ambitious Solar Energy Initiatives

Mexican authorities, in collaboration with CFE, are spearheading a remarkable transformation in the country's energy landscape through three pioneering photovoltaic solar projects situated in the states of Sonora and Yucatan, along with a significant undertaking in Mexico City.

In the northern state of Sonora, the 1GW Puerto Peñasco solar facility represents a pivotal step toward renewable energy dominance. The project's inaugural phase, valued at US$1.6 billion, has already seen the light of day with a 120MW capacity. The second phase, encompassing 300MW, and the third, another 300MW, are underway. Operations are scheduled to commence in February 2024 and April 2026, respectively, with the final phase expected to conclude in 2028. This extended timeline is attributed to a strategic interconnection project with neighboring Baja California. 

In July, CFE secured a US$98.7 million loan from the French development agency, AFD, to fuel further construction. Transparency surrounding CFE's contract allocations is clouded, however, as reports from April 2022 indicated the state-owned enterprise was directly awarding contracts, bypassing formal bidding processes.

According to Sonora Governor Alfonso Durazo, the state is on a path to become one of Mexico’s most important states for renewable energy development, as well as a benchmark for political strategies that benefit the acceleration of Mexico’s energy transition.

Heading south to Yucatan, the Nachi Cocom solar park, boasting a 7.5MW capacity, promises to be a catalyst for two groundbreaking electromobility projects. The park's first and second phases house 11,223 solar modules, set to go operational in July and December 2023. The primary objective of this initiative is to electrify the Ie-Tram electric bus corridor—a US$164 million endeavor set to debut this year in Merida, Yucatan. Media reports have also hinted at the park's pivotal role in electrifying segments of the Mayan Train route. 

While CFE initially estimated the project cost at MX$9.16 million (US$519,773), procurement records reveal the awarding of three contracts totaling MX$222 million (US$12.5 million) this year, with a fourth contract awaiting potential bids. A recent tender was launched by CFE in late September, aiming to secure the civil and electromechanical construction necessary to connect the park to a 115kV electrical substation. Bids will be unveiled on Oct. 13, with the winning bidder disclosed four days later, as per contest No. CFE-0900-CSCON-0104-2023.

Last, is the Central de Abasto project in Mexico City's populous district, Iztapalapa. The initial phase of this project was inaugurated in June by Claudia Sheinbaum, then-Mayor of Mexico City. Part of the City Solar program, this undertaking is set to harness a total investment of MX$500 million (US$28.3 million), with a significant portion—MX$400 million (US$22.6 million) —flowing from federal coffers, while the city government contributes the remainder. 

Since 2022, CFE has orchestrated four tendering processes to propel this solar dream into a reality. The first contract, valued at MX$25 million (US$1.4 million), was awarded to Fortius Electromecánica in February 2022, focusing on the design and construction of two photovoltaic systems tailored for the market's rooftops. In addition, March 2022 witnessed the second contract, a near MX$4 million (US$226,975) deal sealed with Aplicsa, earmarked for waterproofing the roofs, preparing them for the installation of distributed generation photovoltaic systems. The third and fourth phases encompass engineering, procurement, construction and commissioning of a photovoltaic technology powerhouse atop the Central de Abasto's warehouses. In November 2022, Solarvatio was awarded the first stage with a contract worth MX$209 million (US$11.8 million), while the second phase was entrusted to a consortium led by Sun Core, securing a MX$151 million (US$8.5 million) contract on July 20 of this year. The grand unveiling of these facilities is scheduled for December. 

Despite the efforts, the current rate of renewable energy production is almost nine percentage points below the 35% target set in national legislation and the Paris Agreement, to be reached by 2024. IMCO stressed that if low-emissions projects are not accelerated, the country will become less competitive, particularly in a context where providing clean energy is as important as the reliability of the electricity system or energy prices.