Central American state an attractive spot for renewable energy investors

The Mexican government’s Secretaría de Energía (SENER) is the department responsible for energy production and regulation, promoting the use of renewable energy sources in reducing fossil fuel dependence. It recently issued a Study on prospects for renewable energy development in Mexico, suggesting that there is between 16 GW and 20 GW of potential renewable energy deployment available over the next 15 years.
Central American state an attractive spot for renewable energy investors

Currently, the country is close to meeting a number of national renewable energy targets across a range of technologies including wind, hydro (<30MW), geothermal and bioenergy generation. These targets were established as part of the National Energy Strategy 2010-24, which aims to diversify the energy mix and increase the share of clean technologies supplying power to the grid to 35% by the year 2024.

As a timely boost to the economy, Mexico’s Foreign Ministry recently announced that $158 million (€122 million) of research grants are being provided by Germany to work in collaboration with the Latin American state on a two-year scientific training program, developing renewable energy initiatives as well as other measures to tackle climate change.

Further, the Clean Technology Fund investment plan, part-funded by the Inter-American Development Bank (IDB) which supports climate-friendly development across Latin America, announced on 30 November 2011 a 20-year loan of $70 million (€54 million) to Mexico. This will aid the construction of more than 10 small-scale hydro and wind power projects with total renewable electricity generation of around 1 GW, going some way to meeting Mexico’s ambitious renewable energy plans.

Onshore wind

Mexico’s Electric Power Research Institute has conducted studies to establish the national wind energy generation potential. These estimates are based on the assumption that only 10% of the total area is potentially viable for the installation of wind farms due to Mexico’s highly variable terrain.

Due to various socioeconomic factors, as well as the technical feasibility of wind generation, the wind energy potential resource for plant load factors greater than 20%, 30% and 35% is estimated at around 71 GW, 11 GW and 5 GW respectively. While the latter are naturally the most attractive from a generation point of view, under the nuances of the Mexican electricity market, plants with load factors below 30% can be economically feasible in certain conditions.

Mexico is privileged to have one of the world’s best wind resources in the south western state of Oaxaca’s La Ventosa region. The IDB has approved financing for the construction here of 132 turbines representing one of the largest wind farms in Latin America, at 396 MW, via a $72 million (€56 million) loan to Mareña Renovables Capital.

The project will reduce annual carbon dioxide emissions by 1m tonnes and supply energy to subsidiaries of Fomento Económico Mexicano, S.A.B. de C.V (FEMSA) and Heineken, reducing the beverage companies’ total energy costs by approximately 10%.


On 28 November 2011, the Chinese solar PV specialist Risen Energy Co. signed an agreement with the Government of the central state of Durango to build a solar plant over several phases. The initial ground-mounted phase will cost $60 million (€46 million), with total capacity of all planned phases at 200 MW. Currently, solar PV is used for small-scale applications including water pumping and rural and residential electricity, with just 32 MW of installed capacity nationwide.

Mexico has no operational solar CSP plants; however, there is a project under way to develop a hybrid system consisting of a combined cycle gas turbine together with 14 MW solar thermal, expected to begin operations in 2013.

Small hydro

Lastly, the Federal Electricity Commission (CFE) is a company created and owned by the Mexican Government with responsibility for generating, distributing and marketing power to around 31% of the population. It operates a number of hydroelectric plants with a total capacity of 293 MW.

[Inset: Courtesy of Carlos Hervey Torres de la Vega]

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