Sharing Expansion Costs Makes SenseWed, 02/22/2017 - 10:04
Q: Which segments offer the most opportunity to strengthen AWS Truepower’s position in Mexico?
MB: We provide services across the whole project lifecycle but as the Mexican market is still in its early stages, our services for assessing resources and preconstruction energy production estimates are the most requested. We also offer independent engineering services for transaction and investment analysis, which we have already provided to some of the operational wind energy projects in Mexico. We hope to get more involved in forecasting and other studies concerning the grid’s operation, as well as performance assessment.
Q: What hurdles does Mexico face regarding energy infrastructure for the integration of renewables?
JO: One of the main issues is the interconnection infrastructure. Its future development is established by PRODESEN and is highly dependent on whether CFE decides to build transmission lines by itself or to establish partnerships with private parties. The Electricity Industry Law allows private companies to suggest new transmission lines and substations but there are restrictions on their full participation in the development of new infrastructure.
We see a huge need for forecasting services to estimate the amount of energy that will be entering the grid at certain times. This information is particularly important for new generators and for CENACE, the grid’s operator, since it needs to plan operations and investments in advance. Forecasting energy flows becomes especially important when including renewables because of their intermittency and technical complexity. At the beginning of 2016 when the electricity spot market was launched, it became more important to predict and measure the amount of energy to be injected into each node. We have the experience and the skills to address this task.
Q: What role will PPPs have in developing the country’s new energy infrastructure?
MB: The private sector should be engaged in the development of new transmission infrastructure, particularly in the wind energy sector. Sharing expansion costs with the private sector makes sense for the authorities. The development of energy infrastructure must not be defined only by a central public authority because that might hinder optimal investments. Mexico must develop an adequate market for grid services and establish a mechanism for planning the grid expansion to reach critical locations. Other countries have in-depth planning studies to decide where the investments will be allocated, which tend to have several stakeholders involved due to the need for economic and technical assessments during the planning process. It is more efficient to have a clear plan for the project’s early stages because transmission infrastructure requires resources and time to develop.
Q: What are the shortcomings of the Mexican grid compared to global standards?
MB: Every region in the world has its particular issues. Texas, for instance, was famous for building more wind energy than its transmission infrastructure could handle, which resulted in the curtailment of much of its wind facilities. The state responded by expanding its transmission capacity and that has made the situation much more manageable. Hopefully, Mexico will not make the same mistakes.
Q: What advantages does AWS Truepower have over its competitors?
MB: AWS Truepower is known for being technically advanced and it is well respected for setting technical standards. We also are transparent about the methods we use for our analyses and we have a lot of experience. Finally, we strongly emphasize customer service. I think these elements explain why, in every market where we have established a presence, we have participated in 30 to 50 percent of the assessment or financing of new wind projects.