Adrian Escofet Cedeño
Mexican Wind Energy Association (AMDEE)
View from the Top

Wind Industry About to Truly Take Off

Wed, 02/19/2014 - 10:35

Q: Over the past five years, the Mexican wind industry underwent a transformation. What have been the milestones in its recent development?

A: We currently have approximately 2GW of installed wind capacity in Mexico, mainly in Oaxaca. The government has dedicated itself to reach the target of 12GW to be installed by 2020, a target that AMDEE has been pushing for. Over 4GW are either in their planning or construction phase. These projects will be operational by 2016 or 2017 as long as transmission infrastructure constraints are solved. The wind industry is actually just about to take off.

The generation costs of wind energy are competitive with other energy sources, and there is little doubt this industry will be the strongest player in the Mexican renewable sector. The government’s objective to generate 35% of Mexico’s electricity from renewable sources by 2024 is not possible without wind power. On its own, wind can provide between 40% and 50% of that capacity. Additionally, only 3% of the total land on which a wind project is built is actually used. The remaining 97% can be used for other purposes. This is not the case for solar, hydro, or other renewable energy technologies.

Q: Can 12GW of installed wind power capacity be achieved within the current operational framework?

A: The current legal and regulatory frameworks work fine but there is always room for improvement. AMDEE is constantly in discussion with the government and the regulatory authorities. Many things have to be done, such as making it easier for small producers to participate in the development of the Mexican wind industry and improving the planning for transmission infrastructure. Improvements could be made in terms of understanding whether the self-supply scheme is the best way to promote renewables or if the government should buy electricity through CFE. We are moving in the right direction and the government is willing to take the necessary measurements for renewable energy to comprise 35% of the total electricity production.

Q: What is your perspective on Mexico’s planned increase in the use of natural gas?

A: Mexico is rich in natural gas and its northern neighbor, the US, has become one of the largest natural gas producers in the world. It makes sense for the Mexican government to expand its natural gas-fired power generation capacity, but this is not as green as wind energy although it is less polluting than other fossil fuels. Renewable energies are not yet capable of playing a central role alone. Wind has huge potential, hydropower is underdeveloped, and solar is still not competitive enough. In spite of our best wishes to shift from natural gas to renewable energy, this is just not possible yet.

Q: What are the limitations of the wind sector in Mexico?

A: The main limitation we face has to be transmission infrastructure. This situation affects the wind sector more than any other. Oaxaca has a potential of 6-8GW, but current transmission infrastructure cannot deal with this amount of energy. There are also other nuisances affecting the Mexican wind sector but they are not problems: it is a new sector, everyone is learning about it, including experienced international companies, since every country approaches renewable energies in its own way.

Q: How can AMDEE push CFE to provide more certainty to producers?

A: As an association representing most of the Mexican wind sector, we work alongside CFE, CRE and SENER. AMDEE promotes and coordinates several studies that focus on issues that are important to the sector, such as small producers and infrastructure. We provide information for policy makers in the government by giving them access to studies done by the private sector, academia and experts in the field.

Q: Why has the wind industry been slow to expand outside of Oaxaca?

A: In Oaxaca it is possible to achieve capacity factors of more than 40% with wind technology that is five years old. There is a significant difference with the capacity factors of just above 20% that can be achieved in other parts of the country or the US. However, new technologies are creating opportunities for wind development in Tamaulipas, Baja California, Chihuahua, Coahuila, Zacatecas, Puebla, and other states.

Q: How can a local supply chain for the wind energy industry be created in Mexico?

A: Mexico has been successful in developing supply chains for industries such as automotive and aerospace. This could also be achieved in the wind industry. AMDEE has to convince manufacturers to come to Mexico and share technology with local companies that could become suppliers for domestic projects. However, manufacturers need some degree of certainty. We talk about installing 12GW in the next ten years but the industry does not know what is going to happen in the next two, four, or five years.