PV Talk: Mexico’s solar landscape

Share on facebook
Share on twitter
Share on linkedin
Share on reddit
Share on email

Joint ventures involving Spain-based energy company Aljaval have received electric energy generation approval for eight solar power projects with a combined capacity of 220MW in Mexico. Javier Mas Abad, Aljaval deputy director, spoke to PV Tech about the strong future for solar in Mexico despite difficulties in gaining finance.

Why is Aljaval having difficulty gaining competitive financing for solar projects in Mexico?

We need two or three months for financing our first projects. For the moment it is going to be complicated. Why? In Mexico you can sign a ‘small producer’ permit that allows you to operate in a spot market. The first main issue is the price of the spot market is influenced by the low oil price. Secondly the last two years have been good years in terms of water so the hydro plants have been working well. These two issues are not allowing finance for the projects that are under the small producer permit.

For example, the price in the North where some of our projects will be connected is around US$55-65 per MWh, while around one year ago the price was around US$140-145 per MWh. The price is more than 50% lower.

The other possibility in Mexico is through a Power Purchase Agreement (PPA) scheme but not all the necessary laws have been implemented yet so we have to wait.

How are these two issues affecting Aljaval?

There are a lot of investors interested in the Mexican market. We have sponsors and investors who want to remain in high PPAs in the projects for 20-25 years, but we are not able to close the agreements unless we have a PPA or something that can solve this price issue.

What other projects are in Aljaval’s pipeline for Mexico?

We have 18 projects of around 30MW each, which is around 500MW, ready for construction this year or in 2016. We are starting with new developments under the energy reforms published in August last year.

What attracted you to these large deployments in Mexico?

Mexico is one of the top places in terms of solar resources and also for wind. It is a stable country in terms of political and macro economical figures. They have a big population with energy demand that is increasing year by year. We think it is going to be one of the biggest markets in the next year.

The main difference between now and two years ago is that Mexico is implementing a big energy reform with a lot of new laws. There are a lot of things to understand and do, but from our point of view the energy reforms allow us to develop a lot of private projects in Mexico – not just renewable energy but also oil and gas.

What is the most important change in the reform?

The Mexican Government has tried to introduce private companies into a country that was focused in just one national company Comisión Federal de Electricidad. This is their main change from just one national utility to a lot of companies that are allowed to participate in the market. It is necessary to take some time in order to implement this new market. Mexico has moved forward with the energy reform. We share this point of view with all the parties involved in the market.

I think Mexico is very interesting for the investors and the parties involved in the renewable energy market. The market will continue increasing.

An SPG tracker on an existing project in Mexico. Abad expects the country to start delivering on its solar potential this year. Source: SPG
18 October 2021
Intersolar South America, South America’s largest exhibition and conference for the solar industry, takes place at the Expo Center Norte in São Paulo, Brazil on October 18–20, 2021, and has a focus on the areas of photovoltaics, PV production and solar thermal technologies. At the accompanying Intersolar South America Conference, renowned experts shed light on hot topics in the solar industry.
19 October 2021
This year’s EV World Congress will hold a special role, not only as the first live EverythingEV event in over a year – a chance to renew your connections and re-engage with the EV sector face to face – but also as a chance to share insight and inspiration as world starts to look towards move on post COVID towards hitting ambitious decarbonisation goals in 2030 and beyond. As ever, we will be bringing world leading organisations, cities, and technology providers to the UK to inspire EV innovators, and delve into the challenges facing the sector as the UK looks to revolutionise road transport.
20 October 2021
Utility-scale solar is evolving, shaped by higher power modules and demand for increasingly lower levelised cost of electricity (LCOE). Those trends are also changing project requirements elsewhere, with inverters capable of delivering high power density and power capacity in strong demand. In this webinar, FIMER will detail how its innovative high-power, multi-MPPT string inverter and modular conversion solution can both meet those demands and transform the utility-scale solar sector for the better.
20 October 2021
The race is on but we need to sprint… With global climate talks fast approaching and time running out to prevent the most disastrous impacts of climate change, now is the time to act. The Summit will explore the opportunities that emerge from taking action on climate change and provide a clear pathway forward for governments, citizens and companies. Taking place just 10 days before the G20 meeting in Rome, on 30-31 of October, and in the lead up to the critical COP26 meeting in Glasgow from 31 October–12 November, this event will be instrumental in influencing ambitious global action.
10 November 2021
The solar tracker market continues to mature at breakneck speed, with designs and component selections becoming ever-more complex in the pursuit of better project economics. But a more simplistic design could deliver a triple benefit of lower Capex, EPC and Opex costs. This webinar will set out the ideal single axis tracker design for utility-scale solar farms. The design leapfrogs from decades of experience, with a comprehensive understanding and attention to the three cost structures of Capex, EPC and Opx. Sun and Steel Solar has prototyped a single axis tracker designed to deliver up to US$0.03/W in real savings compared to existing single axis trackers on the market. That’s US$30 million for every gigawatt deployed.
15 November 2021
The 10th edition of the famous Metallization and Interconnection Workshop, MIW2021, will take place in the Thor Central venue in Genk, Belgium, on Monday, November 15, and Tuesday, November 16, 2021 as a face-to-face meeting. We are longing for direct exchange of knowledge and ideas after a long time. Hopefully you can be part of it! But of course, the organizors will keep an eye on the evolution of the Covid pandemic. It will be assess carefully, whether the workshop can be held without major risks or excessive restrictions. We are looking forward to exciting talks, discussions and meetings and to welcoming you in Genk!

Read Next

October 15, 2021
US residential solar financier GoodLeap has raised US$800 million to expand into the broader market for sustainable home improvement, other carbon-reducing products and later commercial offerings and electric vehicles (EVs).
October 15, 2021
Doral Renewables has broken ground on the 1.65GWdc Mammoth Solar project in Indiana, set to be the US’ largest solar farm once complete.
October 15, 2021
European renewables investment management firm Greencoat Capital has confirmed its entry to the US renewables market and is plotting to invest up to US$5 billion over the next five years.
October 15, 2021
The European Commission (EC) has urged member states to accelerate solar deployment in order to tackle Europe’s rising electricity prices and has released a ‘toolbox’ to address the short-term impact of prices and strengthen resilience against future shocks
October 14, 2021
Europe’s most competitive renewable power purchase agreement (PPA) offers rose 8% quarter-on-quarter as Europe’s worsening energy crisis bites, according to US firm LevelTen Energy’s Q3 2021 PPA Price Index report.
October 14, 2021
JinkoSolar has laid claim to a new n-type monocrystalline silicon solar cell conversion efficiency record, taking that efficiency rating to 25.4%.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
October 19, 2021
Upcoming Webinars
November 10, 2021
8am (PST) | 5pm (CET)
Solar Media Events
December 1, 2021