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Wind Energy Investments Will Total USD $50 Billion In Mexico

02 August, 2015

Wind energy in Mexico is forecast to become the energy industry’s most important sector over the next 20 years or so and is expected to attract upwards of USD $2 billion annually in new investment dollars. In fact,analysts predict wind energy will become the main source of large-scale renewable energy by 2033 – if not sooner – surpassing natural gas,hydroelectric power and fossil fuels. Furthermore,nearly one-third of the total USD $159 billion in projected electrical generation investments will be spent on wind power between now and 2040.

In total,these investments are expected to more than double Mexico’s installed capacity in its electrical power sector,increasing the total from 66 gigawatts last year to at least 152 gigawatts in 2040. By this time,analysts expect renewable energy sources – mainly wind – to be generating at least two-thirds of Mexico’s electricity,securing its position as a key expansion market for wind investments.

“For investors,wind power generation in Mexico is attractive due to its low cost,which today compares to that of natural gas,” shared Bloomberg’s new energy finance analyst Lilian Alves. “By 2040,the cost of one wind-generated megawatt per hour could be as low as $46,down from today’s cost of $75,which is similar to the cost of electricity generated with natural gas.”

According to Alves,the two regions of Mexico that have the greatest potential for wind power are Oaxaca and Tamaulipas. Also,the demand for power in Mexico is expected to grow at an average rate of at least two percent annually between now and 2040,compared to a projected stabilization and even slight decrease for other regions,including the U.S. and Europe.

“The country has many resources for power generation,and the potential for the power generation industry to grow,” Alves stated. “Long-term projections are favorable for investment in and growth of the power sector in Mexico."

Also of note,early last month,Mexican retailer Organización Soriana,along with the Mexican company GEMEX,announced the construction of two new wind farms under development in Tamaulipas,representing a total investment of USD $260 million. The new wind farms are financed by the North American Development Bank and Mexico’s commercial bank BANORTE,as well as by equity investments from GEMEX.

According to a press release,La Mesa Wind Farm will be developed on 1,366 acres and the Victoria Wind Farm will encompass approximately 1,730 acres. Each project will consist of 15 wind turbines with a total installed power generation capacity of 49.5 megawatts and will produce around 181 gigawatt-hours/year of electricity. Soriana will consume the majority of power that the plants generate for the next 20 years as part of an agreement to supply sustainable energy to more than 300 of its stores. This move will effectively serve dual purposes – first,to actively contribute to the use and development of sustainable energy – and second,to reduce the company’s own energy costs.

To put it in perspective,the electricity generated just by these two wind farms is equivalent to the annual consumption of around 51,046 households. Or,to put it another way,the renewable energy produced by these projects is akin to removing around 58,000 cars from the road each year.