Renewable Energy Development Leads to Energy Storage Overhaul

Q: Why is the Mexican energy sector such an interesting market for Power Electronics?

A: We have identified an alignment between our technologies and the solutions that the Mexican energy market needs. These solutions are needed despite the slowdown in the renewable energy sector, which we expect will change soon. It will prove to be unsustainable for Mexico to continue walking in the opposite direction amid all the wonderful developments and innovations taking place in energy markets all over the world as the energy transition continues, particularly in the field of energy storage. The energy storage situation in Mexico requires a great deal of attention and work. We need to see the public and private sectors coordinate a more aggressive frontal assault to address the country’s energy storage needs through the initiation of many more projects. 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 and energy storage is essential to the correct functioning of that grid.

Q: How is the company adapting its leading inverter solutions to the Mexican market?

A: As a company, we are focused on working with large utility clients, so we cannot get involved in smaller projects or distributed generation. This has somewhat complicated our involvement in the Mexican solar market. Thankfully, we have adapted our structure to compensate for this, acquiring additional business in Mexico through our mobility solutions division, which is taking advantage of the increase in demand for electric vehicle charging stations. Our industrial division in Mexico, through which we are able to service the country’s mining and oil sectors, is very active. This includes activity in the artificial lift subsector within shallow water oil and gas operations in Mexico’s globally renowned Campeche Basin. Energy quality and regulatory compliance have also been a significant sector of business for us in Mexico. We have many equipment solutions to offer in that category. All of this has allowed us to successfully weather the storm that Mexico’s renewable energy sector is going through, along with its consequential halting of solar energy projects, particularly the larger ones where we are best suited to participate. We will continue to bet on the future of Mexico’s renewable energy development because the magnitude of the potential is simply undeniable. 

Q: What is your forecast for solar growth in Mexico?

A: It is quite hard at the moment to predict what the pace of change will be. However, the energy transition is a globalized process and it is unstoppable. The current federal administration has no chance of standing in its way or even slowing it down. By 2050, the US is expecting to generate between 50 and 60 percent of its energy through renewable sources. By the mere virtue of being its neighbor, Mexico undoubtedly will be influenced by these overriding trends regardless of its current political bent toward hydrocarbon resources. The energy development patterns of the US and Mexico have a historical tendency of mirroring each other. Investment will be detonated in this way. It is simply inevitable. 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.      

Q: To what extent do regulatory issues play a role in accelerating Mexico’s development of its energy storage capabilities?

A: It is interesting to note that the only major storage projects in the pipeline in Mexico are taking place in Baja California, which derives its electricity from a grid that is independent from the rest of the country. That independence grants the region some degree of political and regulatory agility. We are expecting to see more major projects announced in the short to medium term but Baja California is likely to become a reference and a template for similar developments in the rest of the country. It also might come to depend less on the efforts of the private sector and more on executive decisions made at much higher levels of government. 

Power Electronics is a global leader in the production and installation of variable speed drives, electronic soft starters, solar inverters, energy storage and recharging units. Its products have been adapted for a variety of industrial uses.