Mexico has been in the news a lot over the last couple of years for opening up its oil market to outside investment for the first time since 1938,but solar power is also a big reason to take a closer look at Mexico’s booming energy economy. Although wind and solar energy currently only comprises around 1.5 percent of the nation’s energy needs,the government in Mexico makes renewable energy a priority and is systematically its energy investments to renewable resources and green energy initiatives. In fact,the Mexican government is planning to generate at least 35 percent of its power from clean sources by 2026 and projects an increase of 2,170 MW worth of solar power by 2020.
In mid-January the city of La Paz in the state of Baja California Sur announced it will soon be 100 percent solar powered,after the 25-megawatt Grupotec I solar power plant goes online in June of 2015. This will make La Paz,which lies about 100 miles north of Cabo San Lucas – not far from Mexico’s Pacific Coast – the first city in Latin America to claim this title. The Grupotec plant,along with the existing 30-megawatt Aura Solar plant near the La Paz airport,will reportedly generate enough electricity to power the entire city.
“For readers unfamiliar with southern Baja,La Paz is not a sleepy little desert town,” writes KCET.org. “Aside from being a state capital and commercial center,it’s also home to the autonomous University of Baja California Sur,as well as three world-class institutes of marine biology.”
With at least 215,000 residents in the city itself,along with up to 45,000 in the surrounding communities,La Paz is about equal to the size of San Bernardino,Calif.,so going from relying heavily on fossil fuels to 100 reliance on solar energy will be a remarkable achievement.
In addition,Canadian Solar Inc.,which is one of the world’s largest solar power companies,supplied 8.7 MW of its MaxPower CS6X Solar Modules to the EOSOL Mexico project in Durango,which represents Mexico’s second largest photovoltaic project to date. Its first installation in Durango is just one part of an EOSOL mega-project that is expected to generate more than 200 MW of solar power by the end of 2015.
So what does all of this great news about how solar energy could outshine fossil fuels in Mexico mean for the average international investor? In short,it means Mexico will soon be a major source of cheaper greener power,thanks to a major influx of new investment dollars and the recent energy reform,which will ultimately mean cheaper tariffs and a better,more sustainable supply.
“Mexico is going to be one of our main investment destinations in the next few years,” shared Ignacio Galán,chairman and chief executive of Spain’s Iberdrola,which is already the largest private generator in Mexico. “As a result,we will be producing more energy in Mexico that in any other country where we have operations.”
The reforms have already opened the door to $7.7 billion in new investments throughout Mexico in a variety of different infrastructure projects,including gas pipelines and upgrading seven power-generating plants to run on natural gas instead of fuel oil.