Amid Solar Uncertainty, Paths Remain For Mexican Renewables
It’s early August, and political and business bigwigs are gathered in a remote corner of Sonora. A massive, air-conditioned shade structure equipped with a sound system protects them from the brutal summer sun.
As blistering as it is, that sun is more than welcome at the remote site more than an hour’s drive west of the Sonoran capital Hermosillo: Zuma Energia’s soon-to-be-inaugurated half-a-million-panel, 162-megawatt solar power plant.
“In front of us are 500,000 solar panels, spread over (860 acres),” Zuma CEO Adrian Katzew said. “To give an idea of (860 acres), it’s 520 soccer fields.”
The plant generates enough energy to power over 200,000 Mexican homes and cancel out the emissions of half of Hermosillo’s vehicles.
This project — and many like it — was the fruit of long-term energy auctions, which themselves were a creation of the previous administration’s energy reform.
They allowed private businesses to generate electricity for the federal energy utility — and private parties — through a competitive bidding process.
A strong majority of Mexico’s large scale solar capacity, now approaching 4 gigawatts, has come online through these auctions, according to recent data from the Mexican Solar Energy Association.
But early this year the new administration of President Andres Manuel Lopez Obrador, or AMLO, canceled the fourth round of those auctions, as well as two major transmission line projects seen as key to continued renewable energy growth.
Officials, like state energy utility head Manuel Bartlett, have criticized solar and wind as unreliable and more expensive than advocates claim. Reinvigorating the state oil company Pemex has been a central priority of the AMLO administration.
Energy Secretary Rocio Nahle was on hand for the August Zuma inauguration. She applauded the project but also weighed in on the status of the auctions.
“The exact instructions from (the president) were, ‘we’re going to respect all of the contracts,’” she said. But restarting the auctions wouldn’t be revisited until all of the projects awarded over the first three auctions are completed.
“Yes, we have to move toward renewable energy,” she added. “That’s where the whole world is heading, and Mexico needs to do it in a responsible and orderly way.”
“I think the near term prospects for solar development are still good,” said Lisa Viscidi, director of the Inter-American Dialogue’s energy, climate change and extractive industries program.
“But I think the opportunity for really expanding on a larger scale and over a longer time period is now very much threatened.”
In her view, AMLO’s campaign positions on clean energy were very good.
“But then when you look at what the government’s done, and what he and his team have said, it’s not such a bright picture,” she added.
While the future of the auctions as originally conceived is uncertain, there may be other ways to bring large energy consumers and producers together.
Leonardo Beltran was deputy energy secretary during former president Enrique Pena Nieto’s administration. He’s now on the administrative board of Sustainable Energy for All.
“Demand is going to continue growing,” he said.
That’s because regulations requiring large users to get a rising share of their energy from clean sources remain in effect.
A viable alternative in Beltran’s view is for federal energy regulators to help organize auctions in which just private users and providers would participate. He argues that would keep alive a familiar, transparent process that allows energy users to pool their demand.
But the proposal remains just a theoretical possibility.
Where Mexican solar is enjoying uninterrupted growth is in distributed generation: smaller scale installations that generate power where it is used, like rooftop arrays. Capacity has grown more than 10 times to more than 800 megawatts in less than five years.
That trend is very much alive in Sonora, which boasts some of the highest solar irradiation levels in the hemisphere. More than 30 megawatts of distributed generation have been installed there so far, according to recent federal data.
Manuel Puebla, whose Hermosillo company Pueblo Solar is involved in a number of DG projects, says technology costs keep falling.
“It has basically been an explosion over the last year,” he said.
Coupled with more stable electricity rates that make calculating project viability easier, Puebla says there’s been an explosion in rooftop solar over the last year or so.
Unbeknownst to the bowlers at a popular alley in Central Hermosillo, several of Puebla’s employees were hard at work on the roof above on a recent Friday installing a 170 kilowatt array.
“Personally, what I see is that a lot of people are focusing on solar,” engineer Luis Octavio Rodriguez said.
And a few weeks, when the project is completed, it will be the sun that powers the scoreboards tracking strikes and spares — and all other energy needs on the lanes below.