Storage Seen as Missing Link for Clean Compliance

From India to Alaska to Europe, AES is one of the names that comes to mind when discussing the global power generation industry, with operations in 18 countries and over 36GW in operation. Since 2014 it has been preparing for the huge challenges brought by Mexico's Energy Reform, closely working with the public sector to suggest ideas for a more attractive regulatory framework, according to its Mexico General Manager, Juan Rubiolo.

The company, which partnered in 2016 with local industry, retail and financial conglomerate Grupo Bal, operates three plants in Mexico. EnerAB, AES Mexico’s joint Venture with Grupo Bal, is the platform from which both companies are looking to promote generation projects ranging from gas-based technologies such as combined-cycle and cogeneration plants to solar PV and wind generation. These will take advantage of AES’ leadership in the field of energy storage to solve investors’ main gripe with those renewable technologies, namely intermittency as they depend on weather conditions and even the planet’s rotation. The company says it has over 110MW of storage units already installed around the world. “The rise of renewable energy generation, whose intermittency is the cause of several technical problems related to the grid’s instability, has contributed to boosting the interest in energy-storage solutions, particularly from system operators like CENACE. Energy storage is seen as the missing link to help countries comply with their clean energy targets,” Rubiolo says.

Storage solutions, he adds, have been crucial to the introduction of renewables in countries like India or Chile and helped promote assimilation. Storing energy can help add flexibility and help incorporate larger shares of renewables to the grid, an important point considering Mexico has a legal objective to reach 35 percent of clean energy generation by 2024. In Mexico, all new developments will take place through EnerAB. Beyond traditional gas-powered generation and renewable energy and storage, the company’s third focus will be innovative solutions like seawater desalinization for drought-prone states in northern Mexico. EnerAB will keep an eye on the private sector but Rubiolo believes that in the short term, business opportunities will still come mainly from the state-owned industry giants PEMEX and CFE. “Usually, the private sector is the last to adapt to the regulatory changes because the regulatory and market aspects are not quickly assimilated by all companies. CFE and PEMEX will continue offering the greatest opportunities in the immediate period.”