- Press Releases
June 18 (Renewables Now) - Mexico, Central American and the Caribbean collectively installed 1,830 MW of new wind power capacity in 2019, growing additions by 126% year-on-year, according to market researcher Wood Mackenzie.
Mexico was last year’s regional leader, with 1,590 MW of the connected capacity, which represented a 125% surge from 2018.
The region arrived in 2020 with more than 8.4 GW of cumulative operational wind power capacity, close to 6.5 GW of which is in Mexico.
WoodMac forecasts Mexico, Central America and the Caribbean to install 6.9 GW of new wind capacity through 2029. The Mexican market is again projected to dominate with 6.1 GW of new capacity, or almost 90% of the region’s total.
“Capacity 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. Upside for wind power development in the region is tempered by highly competitive PV and a build-out of gas generation support infrastructure”, said Brian Gaylord, principal analyst at Wood Mackenzie.
Despite being the most promising wind power market in the region, Mexico is looking at challenging times at least until president Andres Manuel Lopez Obrador’s term is over in 2024.
In April 2020, Mexican electricity market operator CENACE suspended testing and commissioning of new wind and photovoltaic (PV) projects indefinitely citing COVID-19-related concerns for the grid stability.
Later in 2020, energy secretariat SENER issued a policy calling for more direct participation from state-owned utility CFE in long-term grid planning.
CFE, a power producer also in charge of Mexico’s transmission system, last year cancelled two important grid projects which could have spurred wind development in the states of Oaxaca and Baja California.
According to WoodMac, CFE is not likely to carry out substantial grid upgrades during the term of the Lopez Obrador administration.
“CFE’s 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”, Gaylord said.
The Lopez Obrador government is not expected to hold a long-term power auction during its term. Still, power purchase agreements (PPAs) awarded in previous auction rounds will bring new capacity through 2022 and in 2026.
Overall, auctions will result in 2 GW of new wind capacity in Mexico during the forecast period, WoodMac forecasts. By the end of 2029, PPAs with commercial and industrial off-takers are expected to propel new wind power additions in the country and add some 4 GW of capacity, according to WoodMac.