Wind Energy in México

mexico.jpgMéxico’s wholesale electricity market began operation in 2016. Due to the new policies and legal framework of the country’s energy reform, the Mexican wind market has begun to evolve. In 2016, México added 454 MW of new wind power to the country’s electricity grid, bringing the total capacity to 3,527 MW. This represents about 5% of total generation capacity.

México’s wind industry aims to install 12 GW by the end of 2020, and 15 GW by the end of 2022. In México, auction mechanisms allow the development of wind power at competitive prices.

The newly established Mexican Wind Energy Innovation Center (CEMIE-Eólico) is focused on increasing and consolidating the country’s scientific and technical capacities in the field of wind energy.

Policies Supporting Development

México’s recent energy reform intends to foster competitiveness and private investment throughout the electric power sector value chain. This should increase port economic growth and job creation by delivering competitively-priced, reliable, clean, and secure electricity. The system is moving from a completely state-owned national utility, which provides everything from generation to transmission, distribution, and retail, to a highly competitive market. The primary features of the new system include:

  • Transformation of the Federal Electricity Commission (CFE) into several generation companies, which will ultimately become separate and independent distribution and retail companies.
  • Creation of the National Centre for Energy Control (CENACE) in 2014 to perform operational control of the national electrical system and the operation of the wholesale electricity market, as well as expand and modernize the national transmission network and the elements of the general distribution networks corresponding to the wholesale electricity market.
  • Providing independent power producers with market access via a new wholesale market for most of the country.
  • Offering private entities with the possibility to get into the transmission business.
  • Implementing an auction system.

Auctions aim to allow basic service providers to enter into long-term contracts in a competitive and prudent manner to meet the needs of power, cumulative electrical energy and clean energy certificates (CELs), to allow other responsible loading entities to participate, and to allow sellers to have a stable source income to support efficient investments in new power plants or to upgrade existing ones. The first two auctions were held in 2016 where the approximate cost of energy was 0.04 USD/kWh. A third auction is planned for April 2017.

Renewable Energy Targets

The 2015 Energy Transition Law, together with the Electricity Law, provides the legal framework to accelerate deployment of power generation from clean energy (defined as renewable sources, nuclear, high-efficiency cogeneration, waste-based generation, and thermal power plants with carbon capture and storage). México’s targets for clean energy with respect to total electrical generation are: 35%, 37.5%, and 50% for 2024, 2030, and 2050, respectively.

México has abundant renewable energy resources. Reliance on wind, geothermal, and photovoltaics has been limited thus far, but the potential for growth is enormous and policies are increasingly supportive. Efforts to develop wind power in México are increasing; 3.5 GW of capacity are already in place, and there is potential for further development across large swathes of northern and southern México.