The competitiveness of wind power guarantees its growth in Mexico

In recent years, Mexico has become one of the countries with the largest wind energy generation in the world and the second in Latin America, after Brazil. For the leader in wind turbines, Vestas, the competitiveness and reliability that this technology has acquired will guarantee its expansion in the country in the coming years, regardless of the holding of renewable energy auctions.

Wind power in Mexico today represents 7.4% of total installed capacity, with 6.5 GW. In recent years, the country has increased its wind farm infrastructure by 300 percent. As main causes of this growth, we can cite three:

First, the country’s excellent wind resources, estimated at 50 GW capacity.

Secondly, the ambitious goals of renewable participation set by the Energy Transition Act of 2015, which seek a share of clean energy of 35 percent in the generation of electricity by 2024, 40 percent in 2035 and the 50 percent in 2050.

In third place is the spectacular technological development experienced by wind energy technology in the last decade, which has made this source of energy one of the most competitive in the world. Since 2009, the leveled cost of energy (LCOE) of terrestrial wind has fallen by 48 percent, reaching 50 USD / MWh.

The decrease in operating costs, achieved thanks to the digitalization and optimization of maintenance processes, has been accompanied by the increase in the power and size of wind turbines, which allows the maximum use of sites with lower winds and expand his presence on the entire planet.

The technological improvements are significant year by year: the 24 Vestas V150-4.2 MW wind turbines that are being installed in the Tres Mesas IV (Tamaulipas) wind farm offer a 21 percent increase in annual energy production compared to the previous model . In January 2019, Vestas launched its new EnVentus wind turbine platform, with models V138-3.0 MW, V150-5.6MW and V162-5.6 MW. These variants, already available in Mexico, once again increase the efficiency of previous designs and add additional improvements that take their performance to unthinkable levels a decade ago.

PPAs, an attractive way for the development of wind energy

The increasingly low wind power LCOE has become a key factor in ensuring a transition to a cleaner energy model in Mexico. After the temporary cancellation of public auctions, alternative models have been opened that demonstrate the interest of private entities to contract wind-generated energy.

The competitiveness of wind power guarantees its growth in Mexico

In particular, the increase in long-term power purchase agreements (PPAs) between private entities shows how the price of wind allows them to align their decarbonization objectives with strategies aimed at saving energy. As an example, the 306 MW of the Mesa La Paz wind farm (Tamaulipas), consisting of 85 Vestas wind turbines. The plant, which is scheduled to start operations in 2019, will be the first PPA above 300 MW fully funded through a US private company in Mexico.

Globally, its popularity is also accelerating: in 2018, renewable energy PPAs reached 13.6 GW, a considerable increase from the 5.4 GW of 2017.

In this context, we believe that despite the uncertainty generated, the development of wind energy in Mexico does not depend so much on the existence of public auctions as on the overcoming of other fundamental challenges for the renewable energy market throughout Latin America. The establishment of transparent rules that provide visibility and security to all actors, or the development of electric transmission networks that allow connecting projects with great potential, may be the most urgent for the achievement of Mexico’s renewable goals.

With these challenges in mind, as a leading wind energy company and more than 2 GW already installed in the country, from Vestas we are optimistic and committed to the Mexican market. This bet materialized just a year ago, when we started producing shovels in the country, at the TPI Composites factory in Tamaulipas, also contributing to generate local employment. In the coming years, we will continue to provide the best technological solutions to meet the renewable goals so necessary for the future of Mexico and the planet.

    Vestas General Manager for Mexico.
    Agustín Sánchez-Tembleque