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Mexico set for 20-fold solar expansion by 2019

After a year that included two fiercely competitive renewables tenders, Mexico’s energy secretariat says the country is on track to have 5.4GW of operating solar capacity by the end of 2019, more than 20 times its current capacity.

By comparison, Mexico’s more well-established wind sector is expected to have about 3.9GW of installed capacity spinning by that same point in time.

Mexico held two auctions for new clean-energy generation capacity in 2016, successfully managing to lure many of the world’s leading renewables developers. Solar and wind dominated the 4.9GW of capacity contracted in the two tenders, with solar surprising pundits by taking the lion’s share.

A unit of Italy’s Enel was the biggest winner in the first tender, which also saw solar developers like US-based SunPower and China’s JinkoSolar bidding aggressively to gain a toehold in the Mexican market. Among the major second-tender winners were Iberdrola, Acciona Energía, EDF, and Fotowatio Renewable Ventures.

As a result of solar’s strong performance in last year’s tenders, Mexico’s installed capacity is set to soar to 5,400MW by the end of 2019, the Secretaría de Energía (Sener) said in a year-end statement.

Wind, meanwhile, will triple its base in the country to just under 2.5GW by the end of 2018, and then rise to around 3.9GW by the end of 2019, according to Sener.

The rapid rise of solar and wind comes as Mexico’s overall output of clean energy has been declining, falling more than 10% in the first half of 2016, in part because of poor conditions for hydroelectric generation. The vast majority of Mexico’s clean energy generation today comes from hydro and nuclear.

But solar and wind are expected to dominate Mexico’s market for new power plants in the decades ahead, with the International Energy Agency predicting renewables will account for more than half of new capacity built to 2040, and other analysts predicting even higher shares.

The next renewables tender is expected in spring 2017.

Mexico’s electricity demand has more than doubled over the last 20 years, and is expected to rise another 85% by 2040, the IEA predicts.

Mexico has written into law clean-energy targets of 25% by 2018, 30% by 2021 and 35% by 2024, all of them including gas-fired generation, the country's largest source of electricity today. Mexico has become increasingly reliant on gas imports from the US in recent years.

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