THE WIND IN MEXICO

Will President-Elect Nieto Unlock Mexico's Vast Wind Energy Potential?

Allan T. Marks and Franciso Luna, 3 August 2012 (North American Windpower)

“…[The] return of the Institutional Revolutionary Party to the presidency after 12 years of opposition rule presents an important opportunity for [President-Elect Enrique Pena Nieto] to confirm [Mexico’s] commitment to energy reform and to create a robust market for wind energy…The Mexican government estimates the country’s wind power potential at 11 GW just for sites with capacity factors over 30%, and up to 71 GW taking into account sites with lower capacity factors…

“…[T]he Isthmus of Tehuantepec in southern Mexico (which includes the state of Oaxaca, where the vast majority of Mexico’s operating wind farms are located) alone has enough [estimated] wind resource to supply the entire electricity demand of Mexico, assuming that transmission constraints, site access and other issues could be solved. Despite such great promise, at the end of 2011, Mexico had an installed wind generation capacity of only 873 MW and authorized permits sufficient to reach 1,399 MW capacity over the next few years.”

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“The Mexican government has taken initial steps to incentivize wind generation…[D]evelopers have been granted an accelerated depreciation of 100% of the qualifying investment in the first year of operation…[M]ore wind-related initiatives are needed…De-monopolizing power generation to allow renewable projects to compete with CFE would spur significant new investment in wind energy projects in Mexico. Short of ending CFE's monopoly, steps could be taken to improve transmission line access…Current transmission capacity is limited and biased toward existing power plants or new gas-fired plants under CFE control…

“Mexico may also directly promote wind energy development either through the creation and operation of wind generation facilities or through energy purchases from independent producers…[If] the incoming Pena Nieto administration…commits to expanding the development of wind energy…[that would] allow the population to benefit from clean energy at competitive rates without giving up control…”

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