Final financing for construction of Mexico’s largest solar power plants has been arranged and the 404 megawatt (MW) plant, one of the largest in Latin America, is slated to begin operating in early 2019.
The project is just the latest to get the green light, in a country where there were few large solar projects in operation until reform in the country’s electricity market led to a boom in solar installations, now slated to generate 5,000 MW by 2020, up from 150 MW two years ago.
Spanish-based Acciona Energia, one of the world’s largest renewable power companies, and Mexican partner Tuto Energy, have finalized financing of US$264 million for the project, located in the Mexican-U.S. border state of Sonora.
The companies’ repayment of the financing is set for a term of 18 years.
Construction of the Puerto Libertad plant began in February.
About 229 MW of power from the plant has been sold, on a long-term contract basis, to the Federal Electricity Commission (CFE), the former power sector monopoly. Another 114 MW will be sold to private companies, with another 61 MW destined for the wholesale electricity market, which was recently established.
Before the reform of the electricity sector, which began five years ago, CFE dominated the generation, transmission and distribution of electricity in Mexico.
Total generation of about 60,000 MW was controlled by CFE, either directly or through long-term power purchase contracts About 80 per cent of that electricity was generated by fossil fuels, with some hydro and nuclear power as well.
The government anticipates total power generation will almost double by 2030, with more than 40 per cent coming from renewables such as solar and wind.
The Puerto Libertad plant will be equipped with 1,222,800 polycrystalline silicon panels, mounted on horizontal tracking structures.
The total solar capture surface will be 2.4 square kilometres, equivalent to 333 soccer fields. It will be capable of supplying the electricity demand of 583,000 Mexican homes.
The developers of the project say it will prevent 925,443 tonnes of carbon dioxide from being emitted into the atmosphere.
It will create 500 construction jobs and 38 permanent ones.
The executive secretary of the Mexican Solar Energy Association (Asolmex) credited both the electricity sector reforms and Mexico’s sun-drenched climate with the solar boom.
“By 2019 or 2020, when construction will be finished on almost 40 plants, we’ll be generating some 5,000 MW, with an investment of US$5 billion,” said Israel Hurtado.
There have been three auctions focused on the renewables sector, with more planned.
The plummeting cost of solar panel technology has also helped lead to the boom, Hurtado said.
The solar group estimates the new solar plants will add US$1 billion to the country’s gross domestic product and create 13,000 permanent jobs.
Italy-based Enel Group, one of Mexico’s largest renewable power producers, also recently announced an agreement with CFE that will lead to expansions of its existing solar power farms. That will add 96 MW of solar power to the grid, as well as 11 MW from an existing wind power plant.
Despite the dramatic shift to solar in Mexico, natural gas will dominate the country’s power sector far into the future, a recent study concluded.
The report, by McLean, Virginia-based FTI Consulting, predicts gas will be responsible for 55 per cent of the country’s total power consumption by 2030, which will represent more than a doubling of current gas consumption. Most of that gas will be consumed in the country’s power sector, since few Mexican homes have access to gas.