{"id":2205,"date":"2020-06-19T12:08:18","date_gmt":"2020-06-19T18:08:18","guid":{"rendered":"http:\/\/accesstomexico.mx\/blog\/?p=2205"},"modified":"2020-06-19T12:08:18","modified_gmt":"2020-06-19T18:08:18","slug":"wood-mackenzie-mexico-central-america-and-caribbean-wind-outlook","status":"publish","type":"post","link":"https:\/\/accesstomexico.mx\/blog\/wood-mackenzie-mexico-central-america-and-caribbean-wind-outlook\/","title":{"rendered":"Wood Mackenzie: Mexico, Central America and Caribbean wind outlook."},"content":{"rendered":"\n
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ENERGY GLOBAL<\/a><\/p>\n\n\n\n

Mexico, Central America and the Caribbean saw a record 1830 MW of new wind power capacity installed across the region in 2019 \u2013 a 126% y\/y increase in additions, according to new research from Wood Mackenzie.<\/p>\n\n\n\n

\u201cThe Mexican market accounted more than 80% of annual additions in the region during 2019 by connecting 1590 MW, a 125% jump from 2018,\u201d Brian Gaylord, Principal Analyst, said.<\/p>\n\n\n\n

Gaylord has added that cumulative operational wind power capacity surpassed 8.4 GW entering 2020, with almost 6.5GW of this in Mexico.<\/p>\n\n\n\n

Wood Mackenzie forecasts 6.9 GW of new wind capacity additions to be commissioned across Mexico, Central America and the Caribbean through 2029. Again, Mexico will be the primary market, with a forecast 6.1 GW of new capacity to be connected, almost 90% of the total.<\/p>\n\n\n\n

Competitive landscape<\/h2>\n\n\n\n

Gaylord said: \u201cCapacity additions will be driven primarily by C&I demand in Mexico and projects solicited by central power authorities and state utilities throughout the Caribbean and Central America.<\/p>\n\n\n\n

\u201cUpside for wind power development in the region is tempered by highly competitive PV and a build-out of gas generation support infrastructure.\u201d<\/p>\n\n\n\n

Gaylord added that the lack of planned, periodic tendering mechanisms and firm targets for renewable generation in Central American and Caribbean markets limits the growth of wind power in the decade to 2029.<\/p>\n\n\n\n

\u201cThese markets are essentially transactional,\u201d Gaylord said. \u201cNew wind power build will be driven primarily by sporadic project build organised by central power authorities or state utilities in these countries. As such, no market displays potential for consistent annual build.<\/p>\n\n\n\n

\u201cFurthermore, the outlook for wind power in Central America and Caribbean to 2029 is challenged by competition from PV and LNG. Low-cost PV which has displayed more competitive pricing at regional tenders and government plans to invest in LNG terminals, particularly in Central America, limit opportunities for new wind power installations.\u201d<\/p>\n\n\n\n

In the doldrums?<\/h2>\n\n\n\n

While Mexico saw the largest capacity additions in 2019, Gaylord stated that the Mexican government\u2019s move towards centralised control of national power planning dampens the outlook for wind power in the 10 years to 2029.<\/p>\n\n\n\n

Additionally, in late April 2020, Mexico\u2019s nominally independent market operator CENACE suspended the test phasing and commissioning of new wind and PV projects indefinitely based upon suspect COVID-19-related grid stability concerns.<\/p>\n\n\n\n

\u201cAlthough developers were awarded federal court injunctions against both of these measures, it is likely this will dampen investment in new wind power capacity until 2024,\u201d Gaylord added.<\/p>\n\n\n\n

Gaylord stated that transmission is the primary constraint to wind power development in Mexico. High competition from low-cost PV and deflated gas prices mean that wind developers must seek to deploy new projects at sites with the country\u2019s best wind resource.<\/p>\n\n\n\n

Wood Mackenzie states that CFE\u2019s 2019 cancellation of a long-distance HVDC transmission line that would have facilitated an additional 3 GW wind power in Oaxaca, has had an impact. A separate, long-planned grid project to connect the northern Baja California system to the national grid was also cancelled last year, undermining the development of new wind projects in the northwest state.<\/p>\n\n\n\n

Long-term planning<\/h2>\n\n\n\n

Gaylord said that a trend of increasing congestion-associated transmission costs in the wind-rich northeast border states indicates growing grid constraint in that region which will limit incorporation of new projects.<\/p>\n\n\n\n

Alleviating this grid constraint will be challenging. Accordingly, Wood Mackenzie does not expect substantial transmission upgrades for the duration of the Lopez Obrador presidency to be carried out by CFE, which is responsible for the country\u2019s transmission grid. The state utility has instead engaged in a strategy of deploying new gas-fired generation in proximity to load centres to minimise investment in long-distance transmission lines.<\/p>\n\n\n\n

Gaylord added: \u201cSENER\u2019s May 2020 policy directive called for more direct participation from CFE in long-term grid planning. CFE\u2019s localised gas capacity strategy and its opposition to private participation in electricity generation indicate it will not support investments in grid infrastructure that support incorporation of new wind or PV capacity.\u201d<\/p>\n\n\n\n

No new government-organised long-term auctions are expected to be held through to 2024, when Lopez Obrador\u2019s term ends.<\/p>\n\n\n\n

Still, a backlog of auction projects which secured power purchase agreements (PPAs) at auctions in 2016 and 2017 will partially support capacity additions through 2022. Auction-supported capacity does return to the outlook in 2026. Cumulatively, auctions will support 2 GW of new wind power build in Mexico, Wood Mackenzie has found.<\/p>\n\n\n\n

According to Wood Mackenzie, demand from industrial and commercial off-takers will drive most new wind capacity additions in Mexico in the 10 years to 2029. The migration of industrial companies and large commercial off-takers to bilateral agreements with wind developers looks set to continue.<\/p>\n\n\n\n

C&I PPAs supported by this and realised via the historic self-supply mechanism correspond to 4.2 GW (65%) of operational wind power in Mexico, Wood Mackenzie states. The outlook through 2029 is underpinned by an additional 4 GW of capacity additions predicated upon similar C&I offtake agreements.<\/p>\n\n\n\n

Gaylord added: \u201cUpside for this route to markets is limited by increasing competition from low-cost PV projects to capture demand within this segment. Still, geographic, nodal and demand shape considerations facilitate wind power developers\u2019 ability to compete with solar within this market.\u201d<\/p>\n\n\n\n

Sarah Smith. (2020). Wood Mackenzie: Mexico, Central America and Caribbean wind outlook. England. Energy Global.<\/em> Recuperado de <\/strong><\/p>\n\n\n\n

https:\/\/www.energyglobal.com\/wind\/19062020\/wood-mackenzie-mexico-central-america-and-caribbean-wind-outlook\/<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

ENERGY GLOBAL Mexico, Central America and the Caribbean saw a record 1830 MW of new wind power capacity installed across the region in 2019 \u2013 a 126% y\/y increase in additions, according to new research from Wood Mackenzie. \u201cThe Mexican […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-2205","post","type-post","status-publish","format-standard","hentry","category-uncategorized","clearfix"],"_links":{"self":[{"href":"https:\/\/accesstomexico.mx\/blog\/wp-json\/wp\/v2\/posts\/2205","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/accesstomexico.mx\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/accesstomexico.mx\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/accesstomexico.mx\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/accesstomexico.mx\/blog\/wp-json\/wp\/v2\/comments?post=2205"}],"version-history":[{"count":1,"href":"https:\/\/accesstomexico.mx\/blog\/wp-json\/wp\/v2\/posts\/2205\/revisions"}],"predecessor-version":[{"id":2207,"href":"https:\/\/accesstomexico.mx\/blog\/wp-json\/wp\/v2\/posts\/2205\/revisions\/2207"}],"wp:attachment":[{"href":"https:\/\/accesstomexico.mx\/blog\/wp-json\/wp\/v2\/media?parent=2205"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/accesstomexico.mx\/blog\/wp-json\/wp\/v2\/categories?post=2205"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/accesstomexico.mx\/blog\/wp-json\/wp\/v2\/tags?post=2205"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}