With installations of just over 700 MW last year, Mexico just passed the 3,000 MW mark in terms of cumulative capacity at the end of 2015. Projected installations in 2016 are about 800 MW but it’s after that that the market will take off in earnest. A variety of circumstances have led to dramatic growth expectations for 2017 and 2018 as the ‘old system’ is finished off with the build out of the second ‘open season’ for Oaxaca, and the new system kicks into high gear; and both the government and the industry are determined to see 9,500 MW spinning by the end of 2018, and then up to 15,000 MW by the end of 2022.
It is hard to overstate the dramatic changes in the power sector in Mexico which is very much in medias res at this point in time. From a completely vertically integrated completely state owned national utility providing everything from generation to transmission, distribution, retail, etc., and where it was not possible for IPPs to sell electricity into the market, we have moved to a situation where we either have or will soon have:
- The former state owned monopoly (CFE) transformed into several generation companies and ultimately into separate and independent distribution and retail companies.
- An independent system operator which is responsible for both the regulation of the market and the planning and expansion of the system (CENACE).
- A wholesale market which is now implemented for most of the country
- Market access for IPPs
- The possibility for private entities to get into the transmission business
- An auction system, which is already many, many times oversubscribed for the first round, the winners of which will be disclosed on 31 March, and the second which is supposed to follow shortly thereafter during 2016.
- A green certificate system along with a purchase obligation system.
…and this is happening all at once.
More information on the Mexican wind market will be available on 19 April with a release of GWEC’s Global Wind Market Report. You can also learn more about the Mexican wind market at AWEA’s Windpower where AMDEE’s President, Adrian Escofet, will give a market update at the Doing Business In session for the Mexican market.