What to Take Away from PRODESEN 2021 – 2035By Cas Biekmann | Mon, 07/05/2021 - 17:55
On June 30, Mexico’s Energy Ministry SENER published online its PRODESEN sector development plan for 2021 – 2035. Following soon after last year’s 2020 – 2034 plan, PRODESEN highlights several key developments in Mexico’s energy sector. Important implications for renewable energy development, hydroelectric capacity renovation and combined cycle power plant developments are among the main takeaways.
Renewable Capacity Increased over 2020 – 2021
Despite delays caused by the COVID-19 pandemic and the government’s constraining influence on private renewable energy development, the share of clean energy in Mexico’s power production matrix has grown by 12.19 percent from 2020 to April 2021. This increase is driven mainly by wind and solar projects that were undergoing operational tests when the last PRODESEN concluded, clean energy thus increased from25,594 MW to 28,714 MW.
Combined Cycle, Renewable Energy to Drive Future Capacity Growth
SENER predicts that Mexico will add 21.3GW of new power producing capacity before the end of 2024 . A major driver of this growth will be coming from natural gas-burning combined cycle power plants: including the six projects CFE tendered, 45.5 percent of the MWs added will rely on this technology. Utility scale solar is predicted to contribute 24.8 percent, whereas distributed generation (DG) based solar will add just about 11 percent of the total, but other technologies will contribute as well. Wind energy is to deliver a further 13.4 percent, according to SENER. This means that about half of Mexico’s growing energy mix should be renewable.
DG to Become Increasingly Important
Behind-the-meter energy appears to be well positioned for additional growth in the energy market, since its capacity will go up from the current 1 GW up to almost 3 GW by 2024. Whereas solar energy is the main component, SENER sees small hydroelectric facilities, battery storage and biomass as smaller drivers for DG’s growth.
CFE Looks Toward Nuclear Power, Hydroelectricity and Renewable Energy
PRODESEN notably shows that CFE would develop 8,080MW in renewable energy by 2024. Hydroelectricity as well as nuclear and geothermal energy are mentioned in the plan, although López Obrador has recently hinted at photovoltaic solar-based capacity and wind energy as well. Which technologies are favored by the state-utility will remain to be seen.
Additions Not Enough to Reach Short-Term Clean Energy Requirements
Mexico’s progress toward its ambitious climate goals set in the 2015 Paris Agreements have increasingly been scrutinized due to López Obrador’s vision for the energy sector. His plans to strengthen PEMEX and CFE while discouraging private participation in the energy, oil and gas sectors have slowed down the private project pipeline almost entirely. CFE’s clean energy portfolio, barring its hydroelectric capacity, dwarfs in comparison with what private players developed since 2014’s liberalization of the energy market.
PRODESEN's figures show that renewable energy participation in Mexico remained at 27 percent, lower than the 31 percent that the government had previously communicated it needed to reach its climate goals for this year.
This has further implications for Mexico’s climate goals, which SENER acknowledges will not be reached between 2023 at 2025. Nevertheless, the necessary 36 percent is to be reached by 2026. Starting in 2026, SENER predicts to be ahead of schedule until 2035, at which point it should be breaching the 40 percent line. For these figures to be reached, SENER relies on private energy development to pick up despite the current challenging environment for investments.
Transmission and Distribution as a New Focal Point
Earlier, CFE announced it would invest around US$2.44 billion in 47 transmission and distribution projects. Over 900km of the electricity that could transmit over 6,350 MW is to be tendered within the next few months. To guarantee stable and reliable energy across all of Mexico, PRODESEN has focused on several points to improve the national electrical network (SIN) and the access to it. Specific projects such as the 160 MVA Playacar-Chankanaab submarine transmission networks in Cozumel and interconnection with the Holbox island are some of the projects mentioned in the plan, but the plans for CFE’s transmission and distribution arm plan on targeting many more areas.