Adrián Escofet Cedeño
View from the Top

The Wind Sector Chooses Its Battles Wisely

Wed, 02/24/2016 - 13:03

Q: What have been the highlights of AMDEE’s contribution to the development of the Mexican wind industry over the past two years?

A: AMDEE is the only wind energy association in Mexico, and it has worked incessantly to disseminate the benefits of wind energy and push for the development of a strong value chain. In the past year we have been active in trying to present ideas and suggestions to the Ministry of Energy and Congress in order to create a modern and efficient legal framework. AMDEE’s expertise and knowledge should be taken into account when drafting a comprehensive legal framework. AMDEE has 56 members and it represents all of the wind industry in Mexico, including both large and small players. Many of AMDEE’s members have international experience, which allows the association to adapt and implement specific programs and strategies that have been established in other countries. We were impressed that the government and parties involved in the drafting of the Energy Reform and secondary laws were open to including all the serious actors in the sector. This interaction might be considered as one of AMDEE’s main contribution in the development of the wind sector.

Q: Which were the main points you lobbied for in the Energy Reform?

A: The wind sector is in its infancy in Mexico, with the oldest project in operation only eight years old. There are several issues that need to be resolved in order for the wind sector to truly develop. We require long-term visibility of the programs, plans, and goals regarding the future of the renewable energy in Mexico. The energy and electricity sectors will be drastically transformed from a monopolistic structure to an open market, but this transition will take years to complete, so a desired trajectory must established. AMDEE suggested important transitory articles in the secondary laws regarding the electricity industry, which will allow the wind sector to continue developing projects that had already broken ground, also known as legacy projects. Another important issue we discussed is the development of a strong transmission network, which is one of the main obstacles the wind sector faces at the moment. To secure the output of energy in order to have a national energy market, we need the possibility of regional interchanges of electricity. The final point we lobbied for was the creation of a strong market, governed by clear rules and regulations.

Q: Considering this new energy landscape, what is AMDEE’s installed capacity target for the coming years?

A: Based on studies carried out by AMDEE members, experts, and PwC, the target of installed capacity between 2022 and 2024 is 15,000MW to 20,000MW. Thanks to the development of new technologies, the targets have shifted over the years. With an installed capacity of 2,000MW, the Mexican wind sector has only seen the tip of the iceberg. In the past, financing projects was problematic, but now new projects have a good ROI for investors and financial institutions. Oaxaca used to be the main area of interest because it was the only region where you could find projects with 40% wind factors. Now, with the new generators and technologies, the potential areas in northern Mexico have increased. Potentially, we will be able to achieve more than 8,000MW of installed capacity by the end of this administration. Besides the 2,000MW already in operation, we have another 500MW that will start operating in the next few months. There are also 2,500MW in Oaxaca that will start operating between 2017 and 2018. Getting to almost 8,000MW for 2018 can be achieved if we can meet requirements for transmission infrastructure, market rules, and so on.

Q: What are AMDEE’s ambitions and strategy to promote the development of the Mexican wind industry?

A: We want to have monthly or weekly meetings with CFE, CENACE, CRE, and the Ministry of Energy in order to discuss the rules and regulations, and offer our perspective. AMDEE will create alliances with other associations, not only in the renewables sector, but also with industrial associations. The government, CFE, CENACE, CRE, and the Ministry of Energy have been asking AMDEE to be increasingly creative in the design of the new regulations in order to guarantee the most suitable outcome for all parties. Mexico has the capabilities, the people, and the resources to push the wind sector forward, and AMDEE will be deeply involved in the process.