Mexico Energy Review 2021 by Mexico Business Publishing

2021

Introduction

The paradigm shift in Mexico’s energy sector that began ramping up after the administration of President Andrés Manuel López Obrador entered power went into full swing in 2021. The government’s goal is to return state-owned PEMEX and CFE to the forefront of the industry, playing a fundamental role in the country’s energy production and dispatch. To achieve this, the government began taking decisive steps. For Mexico’s private power sector, this policy redirection proved disappointing and unfortunate. Many of the previously successful strategies regarding financing, permitting and project development had to be either adapted or shelved altogether and initiatives to protect investments were put in motion. The government has also said it is willing to work with the private sector to achieve the country’s ambitious climate goal of 35 percent renewable energy by 2024. To this end, CFE aims to develop further combined cycle power plants, running for the most part on natural gas. To make this a reality, Mexico’s natural gas infrastructure needs to be enhanced. A revamp of hydroelectric capacity is also in the works, and the Program for the Development of the National Electric System 2020-2034 (PRODESEN) continues to acknowledge Mexico’s superb wind and solar capacity due to the country’s geographic location. As a result, smaller distributed solar systems are increasingly popular. However, the lack of improvement in the country’s transmission and distribution system are perhaps the most pressing problem. Newer technologies, such as storage and grid solutions, can play an important role in developing the system and new avenues for public-private partnerships are expected to open up in the near future. Whatever developments the future may bring, Mexico is already benefiting from an open market driven by continuous innovation. It is a market that has demonstrated it resilience and commitment to the country’s energy sector and its here for the long run. Mexico Energy Review 2021 revisits milestones in innovations while zooming in on new opportunities that are expected to allow Mexico’s electricity market to mature and develop further.

Table of Contents

Introduction

State of the Industry

Natural Gas

Solar

Wind

State of the Industry Following three successful long-term electricity auctions, renewable energy seemed all but unstoppable in Mexico. In 2018, however, a new administration came to power, bringing a new vision and political change, and affecting energy industry stakeholders. Nevertheless, the first steps toward achieving Mexico´s climate goals have been taken, and renewable energy is expected to be part of the country’s energy mix for the long run. The largest portion of the renewable projects launched by the electricity auctions are up and running, while others are still in various stages of development. Outside these auctions, renewable energy use is growing in the C&I segment, with a particular focus on distributed generation. Natural gas remains crucial to Mexico’s energy mix, demanding greater strategy regarding its production, transportation and distribution. Furthermore, the stability and reliability of the grid finds itself under close examination. Further investments in the area will be needed, and technological developments will be key to enhancing Mexico’s transmission and distribution network. State of the Industry presents the voices of key industry leaders, who are closely involved in Mexico’s energy development, and paints a clear picture of the current landscape and its opportunities.

State of the Industry

Analysis Resilience a Requirement for Energy Transition

Expert Contributor Ramón Moreno | CEO of Mitsui & Co. Power Americas

Conference Highlights

View From the Top Bruno Riga | Country Manager of Enel Mexico & Central America

Expert Contributor Salomón Amkie | Director of Banking, Capital Markets and Advisory at Citi

Conference Highlights

View From the Top Lilian Alves | Director of Strategic Planning at Mitsui & Co. Power Americas

Analysis Off-Takers Have Potential to Shape Future of Mexico’s Renewables

Expert Contributor Hans-Joachim Kohlsdorf | Managing Partner at Energy to Market (E2M)

Expert Contributor Maria Jose Trevino | Country Manager of Acclaim Energy

Roundtable What Will Make Mexico Truly Competitive in Energy Storage?

View From the Top Raúl Carral | Business Development for Mexico, Central America and Caribbean of Wärtsilä

Spotlight GridSolv Max Storage and Gems Energy Management Systems | Wärtsilä

Content Links

State of the Industry | 7

Resilience a Requirement for Energy Transition From its first day in office, President Andrés Manuel López Obrador’s government has moved to alter the landscape in the energy sector, favoring national companies over the private sphere. The result is an uncertain environment for private companies eyeing investment in the Mexican industry. Those who stay the course, could benefit. Among the first concrete indications that a shift was taking place happened in 2019, when the administration tried to expand clean energy certificates (CELs) to include legacy CFE hydropower plants. CENACE then restricted new renewable interconnections to Mexico’s grid and changed the dispatching of power plants. This was followed by a policy agreement from SENER that proposed altering the roles of CENACE, CRE and CFE. These actions were followed in June 2020 by CFE slapping an 800 percent increase on the wheeling rates for older energy projects operating on legacy contracts. In October 2020, CRE then published a regulation that prevented companies from modifying the end user of their legacy project. Furthermore, regulatory processes slowed down greatly, to the point that permitting became virtually non-existent. These measures were met with amparos that finally saw most of the moves invalidated by Supreme Court rulings. President López Obrador then turned his attention to pushing changes to the Electrical Industry Law (LIE) through Congress, which approved the bill in March 2021. The bill is aimed at strengthening CFE. Previously, auction-based and even full merchant projects gave investors the confidence needed to support long-term power plant plans. Today, players in the energy sector need to reorient themselves in light of the government’s shift that favors CFE. Despite the uncertainty, opportunities in renewables lie in specific areas, such as distributed generation. While the government has moved to strengthen CFE, it also aims to achieve its climate goals, which were reaffirmed in the recent National Electricity System Development Program (PRODESEN). “Mexico still needs 9.6GW to achieve the 2030 target it has set. Mexico currently has around 10GW of solar and wind generation in over 120 projects. To meet these goals, the Mexican government must set clear rules between the public and private sectors in order to drive investment and transmit confidence,” said María José Treviño, Country Manager of Acclaim Energy. Other trends spurring the development of renewables come from outside the country, especially the US, said Salomón Amkie, Director of Banking, Capital Markets and Advisory at Citi. “An overarching question for Mexico is how much will the US attempt to influence its allies and neighbors on climate change? (After) just weeks in office, President Joe Biden signed executive orders that not only brought the US back into the Paris Agreement but created positions, task forces and Read the complete article

processes that put climate at the center of US foreign policy and national security.”

laus Schwab, founder and executive chairman of the World Economic Forum, grabbed headlines in 2016 when he wrote The Fourth Industrial Revolution. The title was overwhelmingly attractive. Being part of history and capturing our time as one of those

inflection points for humanity is certainly impressive. But the essay also created fear due to its transcendental implications. It described a future of nonstop, accelerated change; a long, vertiginous leap for humanity. The prediction that 60 percent of the kids entering primary school would work in jobs that were non-existent at that moment made everyone wonder what the future would be. The power sector is not only part of this revolution but together with data and technology, it is considered one of its important pillars. The main reason is the medium-term threat of climate change, a motivation that is unique and revolutionary in itself: the unprecedented global, communitarian effort to save

State of the Industry | 8

the planet.

Mexico’s Energy Transition: The Time is Now Ramón Moreno CEO of Mitsui & Co. Power Americas

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The task of stopping (and even reverting) climate change is monumental.”

The task of stopping (and even reverting) climate change is monumental. Predictions are a high-risk bet under this scenario of rapid change. Paths to decarbonization could change as technology evolves, and it is precisely the creative destruction process that makes economies and cultures evolve. Nevertheless, some of those trends are clear in the short and medium term. I would emphasize three, which happen to represent a great opportunity for Mexico: + Gas-fueled power generation will continue as the central block of the energy transition, as it has been for the last 20 years, substituting much dirtier coal and fuel-oil power plants. Utility-scale power plants will be needed as much as other small, on-site or off-site power generation blocks. Hybrid concepts will also become more common, such as microgrids where a conventional power generator is combined with solar or batteries. The difficulty to store electricity for long periods, and the possibility of retrofitting these power generation blocks to consume hydrogen or synthetic fuels will provide the long-term visibility that this capital-intensive infrastructure requires. Regulatory wise, capacity and ancillary services need to provide sufficient cash flow for dispatchable generators. + Solar is considered the king of the electricity sector, the International Energy Agency said last year. With renewable energy meeting 80 percent of the growth in demand by 2030, solar has become the cheapest form of electricity production and its deployment will increase year after year in the next decade. + Digitalization will have an increasing impact on all sectors of the economy. Data and artificial intelligence will change the way we consume energy, enabling further installation of distributed energy resources, from accessible smart thermostats with demand response, to distributed solar panels working together as a virtual power plant. The efficiency gains from a digital economy will also play an important role in how power companies can offer optimized products by reducing their capital investment and operational costs. Mexico cannot miss this train called the Fourth Industrial Revolution. In terms of the energy transition, now may be the right time to do it at an affordable cost. Regardless of the regulatory framework and the discussion

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on who does what, or how private companies can help in this endeavor, the participation in an integrated economy for a country that relies on exports for 40 percent of its GDP makes the energy transition probably the most important challenge for Mexico’s success in the coming years.

Conference

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Highlights

Mexico’s Power Producers Ready to Support Energy Transition Patricia Tatto Vice President America at ATA Renewables

Fernando Tovar CEO and Country Manager of Engie Mexico

Ramón Moreno CEO of Mitsui & Co. Power Americas

Gerardo Pérez Vice-President & Country Manager of EDF Renewables Mexico

Bruno Riga Country Manager of Enel Green Power Mexico

he paradigm shift in the Mexican energy sector was the main topic of discussion during the “Power Producers’ Priorities” panel during Mexico Energy Forum 2021, which took place on March 10. Experts addressed several issues, including the

legal framework, protecting investments, transmission and distribution, the energy transition and new technologies to help drive the sector forward. Moderated by Patricia Tatto, Vice President America of ATA Renewables, the panel included Fernando Tovar, CEO and Country Manager of Engie México; Ramón Moreno, CEO of Mitsui & Co. Power Americas; Gerardo Pérez, Vice President and Country Manager of EDF Renewables Mexico and Bruno Riga, Country Manager of Enel Green Power Mexico. Tovar, spearheading the French energy multinational, acknowledged that there is “tremendous uncertainty” in the sector as a result of numerous regulatory changes and measures that have taken place in recent years. “This poses a risk for existing investments but also for potential new investments,” he said. “CFE is a crucial player in the energy market and will continue to be so. Private companies need to operate in the space that is granted to them,” agreed Moreno. “We will always try to grow further here and position ourselves where possible,” he said, noting that combined cycle and other large-scale power plants are key to Mexico’s future. “We maintain our commitment to Mexico’s energy transition. This includes public and private consumers, as well as communities throughout the countries. Our projects should benefit Mexican families first and foremost,” said Pérez. He noted that EDF Renewables adapts quickly to changes in the sector but that it has also learned to be patient. “Of course, rules can change but they should not be applied retro-actively,” he pointed out. Riga, Enel’s newly appointed Country Manager, acknowledged Mexico’s extensive renewable potential. “It is a country in which we want to continue to invest,” he asserted. Despite momentary challenges, Riga concurred that a long-term perspective is crucial for Enel. “We are all lucky to work for companies that have a long-term vision. Problems can always

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arise in the short term but we need a clear vision of where we want to go.”

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from the

Q: What has allowed the company to break world records in terms of levelized cost of energy? A: When Enel first arrived in Mexico, the combination of its solar and wind potential, the liberalization of the electricity market, along with our business model based on sustainability, creating shared value and the circular economy, allowed us to offer costeffective energy and was key to our growth and investment in the region. The cost of renewable energy in Mexico is one of the most competitive in the world, but for it to directly benefit final consumers, regulation must favor its distribution. Electricity from renewable sources is available only to big companies with large consumption while electricity reaching Mexican households is a mix of other nonrenewable sources with other costs, of which the price is reflected in the consumer’s bill. As more renewable energies enter into this mix, electricity prices will improve for people at home. Innovation is one of Enel’s core values, so we continually seek to develop disruptive technologies in accordance with present and future needs. Power Purchase Agreements (PPAs) enable the construction of new and bigger renewable plants where the energy is sold to different off-takers, reducing the final energy cost thanks to economies of scale. Q: What are the characteristics of Enel’s Magdalena II and

Bruno Riga

Villanueva solar plants, and what are their added benefits? A: Magdalena II is located in the state of Tlaxcala, a territory with large solar resources. It is the first Enel Green Power

Country Manager of Enel Mexico & Central America

plant built with bifacial solar panels, which allows it to take advantage of between 10 and 15 percent more solar radiation. It has an installed capacity of 220MW. Magdalena II is capable of producing 600GWh per year, which is equivalent to the energy consumption of more than 269,000 Mexican households,

Consolidation as ‘Green Enabler’ Comes into View

avoiding the emission of more than 330,000 tons of CO2 into the atmosphere each year. Villanueva is located in the state of Coahuila. With 2.5 million solar panels, it is one of the five largest solar plants in the world and the largest in Latin America. Villanueva has an installed capacity of 828MW and avoids the emission of more than 950,000 tons of CO2 per year. It can produce more than 1,700GWh per year and is Enel’s largest photovoltaic plant in the world. Q: Some of your stated goals are “to consolidate projects in operation and expand the commercial portfolio.” What concrete measures will you implement to achieve these objectives? A: We see opportunities in new businesses such as green hydrogen, electric mobility, grids, and publiclighting. In the long term, once regulation is ready and allows it, we see potential in storage as well. We are also working on new solutions for our clients in terms of sustainability, actions incommunities, the circular economy, responsible consumption and communication

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campaigns. Our goal is to consolidate ourselves as a green enabler for our current and future clients. We are focusing on our current projects and those that are about to start commercial operation.

t would be a massive understatement to say 2020 was simply a challenging year for the Mexican energy sector. The clash of external circumstances — a once in a century pandemic shocking markets globally and the potential shift in energy policies by our upstairs neighbor — meeting

internal regulatory hurdles and an administration, seemingly, willing to end any previous framework for the private sector to work with created a terrible environment for growth and investment in the space. In the context of the year just concluded, it seems like a reasonable quest to ponder 2021 and the challenges ahead. Let us start with the Biden-Harris administration and the clear shift in energy policy for the US. While not a surprise to anyone, an overarching question for Mexico is, how much and how strongly will the US attempt to influence its allies and neighbors on climate change. With just weeks in office,

State of the Industry | 11

President Joe Biden signed executive orders that not only

A Decisive 2021 for the Mexican Energy Sector Salomón Amkie Director of Banking, Capital Markets and Advisory at Citi

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brought the US back into the Paris Agreement but created positions, task forces, and processes that put climate at the center of US foreign policy and national security. Encouraging as this may seem for the renewables space in Mexico in particular, the fact is the US is going through significant challenges itself. Coming off a jarring and divisive election and still working through challenges in healthcare and the economy, the prospects of the administration being able to focus and prioritize its energy policies in the short term seem unlikely. Monitoring the ability to fend off the pandemic and reinstate stability in the US will be critical for Mexico’s energy sector and a key aspect of how 2021 shakes out. The second dynamic that could shape our sector this year is the increasing focus on global markets on ESG financing. As

Capital should be available for well-rounded projects in a variety of manners.”

demonstrated in 2020 with green, social and sustainable bond issuances reaching new highs (US$42 billion in North America, more than 2016-2019 combined), and savings materializing in new issues for sponsors, there is no shortage of investor appetite in sight. For Mexico’s energy space, this means capital should be available for well-rounded projects in a variety of manners. Last, but not least, the political landscape in Mexico for this year will, of course, play a role in the sector. With the large midterm election coming up in June and energy having played such a central role in AMLO’s policymaking and campaigning, the strategy and participation of AMLO in the election, and the response of the opposition, can have a material impact on the future. With the US changing gears and leading the way, and markets indicating clear preferences for green, social and sustainable investments, where does Mexico stand? This year will be critical for the AMLO administration to show progress (at least internationally) as 2024 looms closer and closer, and the internal discourse does not seem to be pointing in the right

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direction. With so much to offer in renewable sources, it would be a shame if Mexico misses the opportunity. With so much to come, it will be a challenge to capture it.

Conference

State of the Industry | 12

Highlights

Certainty to Boost Energy Investment Claudio Rodríguez Partner of International Energy Practice at Thompson & Knight

Leonardo Beltrán Non-Resident Fellow at the Institute of the Americas

Carlos Serrano Chief Economist at BBVA Mexico

Alejandro Valerio

exico needs to include renewable energy in its energy transition. This was one of the conclusions drawn during the panel, “Outlook: Impact of Economic Growth on Energy Demand.” “Mexico needs more transparent legislation regarding

electricity to meet global energy goals,” said Claudio Rodríguez, Partner of International Energy Practice at Thompson & Knight. “There is a trend toward renewable energy due to its lower costs and good impact on the environment.” “We have a great challenge in electricity. Recently, the blackouts caused by the cold wave in Texas demonstrated the vulnerability of our infrastructure and that we cannot depend other markets given their volatility,” explained Leonardo Beltrán Rodríguez, Non-Resident Fellow at the Institute of the Americas.

Associate Practice Leader at FrontierView

Veronica Irastorza Associate Director at NERA Economic Consulting

Carlos Serrano, Chief Economist of BBVA Mexico, explained that the country suffered a sharp drop in electricity demand in 2020 with figures not seen since 1930. However, he added that the international scenario will see an economic recovery at different speeds. “We expect the US to have a strong recovery and 7 percent GDP growth. Meanwhile, Mexico is expected to grow between 5 and 6 percent, although it will not be until 2022 when Mexico will return to its 2019 figures,” said Serrano. However, with the new Electricity Law, Mexico runs the risk of a decrease in investments not only in energy but also in other sectors. “Mexico needs to lift the economy and promote energy policies that increase investment,” said Alejandro Valerio, Associate Practice Leader at FrontierView, adding that recent policies are not aligned with USMCA, which could lead to more discussions. In addition, he said that if investments are not promoted, Mexico will not reach its goal of generating 35 percent of its energy from renewable sources. Veronica Irastorza, Associate Director of NERA Economic Consulting, explained that electricity demand has been growing steadily for the past 20 years. However, 2020 saw a significant drop due to the impact of the pandemic on industrial sectors. “Energy security and the use of renewable energy are critical today, as today’s decisions will have an impact on the future. We need to make sure we choose what is best for the country,” she said, adding that the Mexican energy sector has always been politicized and polarized. She also highlighted that the country

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is making important decisions to ensure greater energy security. The future of the Mexican energy sector will depend on the country’s economy and industrial sectors, she concluded.

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from the

Q: How is Mitsui involved in the Mexican energy sector as a developer, power producer, O&M player and qualified supplier? A: In 2020, Mitsui & Co. Power Americas celebrated its 10th anniversary. The company has been reinventing itself, adapting to the changing power market and the needs of its customers. It was first created to focus on the asset management of combined cycle assets. Understanding the market’s evolution, we have applied our knowledge and experience to new segments. We’ve diversified into the acquisition and development of renewable assets as part of our global strategy and now we are involved in the development of on-site thermal and cogeneration solutions to C&I customers. Additionally, considering our experience in the management of more than 3GW of power assets, we are offering asset management and O&M services to other generators from thermal and renewable sources. Finally, qualified supply became part of our strategy to integrate all of our solutions and offer competitive electricity supply and reliable alternatives to customers. Q: How is the company adapting its strategic plans based on the shifting regulatory environment in the energy sector? A: As a global trend, we believe that it is increasingly important

Lilian Alves

to be focused on the downstream market. In 2020, we started the activities of MPA Suministro Calificado to attend the needs of new qualified users and support the migration of existing basic supply and self-supply customers. We believe that through

Director of Strategic Planning at Mitsui & Co. Power Americas

qualified supply, clients can obtain solutions with lower costs that are tailored to their operations. Additionally, we see on-site solutions as an interesting opportunity for energy customers to have more control over their energy costs and more efficient and reliable solutions for their facilities.

The Wholesale Market Holds Many Benefits for Electricity Customers and Power Generators

Q: Despite challenges, where does Mitsui identify the biggest opportunities within this environment? A: We look to provide tailor-made solutions for clients, as a onestop shop. Within the volatile environment due to the COVID-19 pandemic, we see that more and more clients want to focus on their core business and Mitsui & Co. Power Americas wants to become a partner to help reduce and optimize our customers’ energy costs. We can do this through integrated solutions, which can be a combination of qualified supply, on-site generation and smart energy technologies. Q: How would you evaluate your experiences with Mexico’s wholesale electricity market? A: We see it from two perspectives – as a generator and as a qualified supplier. As the second-largest operator of power generation plants in Mexico, our interactions and sales in the wholesale electricity market have been significant. This has also been true lately as we finalize our solar plant in Zacatecas. We have also interacted with it as a service provider. Our portfolio of services in that regard includes representing clients who are entering that wholesale electricity market. As a qualified supplier, we see the increasing need for commercial and industrial clients to find integral energy

solutions for their operations. We want to be much closer to what would be the market’s downstream segment; since last year, we have been developing our distribution capabilities, and this amounts to a vote of confidence in the future of Mexico’s wholesale electricity market. We want to be a part of that future by helping companies see how their entry into this market and the migration of their contracts into its schemes can make their operations more efficient. Particularly in the qualified supply market, we see an interesting evolution in regards to customer’s behavior. Even though some may think that the growth of qualified usaers seems slow, it has to be compared to previous years. The growth rate has increased greatly when you look at the first two years of the market (2016 and 2017), with a much more accelerated growth in each year after 2018. This is a process of change and restructuring that has taken up to 10 years in other countries, so in that sense this transition in Mexico has been much faster. Still, a lot of work remains to be done in terms of educating our clients regarding what Mexico’s wholesale electricity market can offer them. There are various options available for qualified users in the electricity market. The number of possibilities can be a bit dizzying, so we need to work to advise on an optimal solution. Q: How is the company developing a technological platform to facilitate its many activities in the Mexican market? A: Mitsui & Co. Power Americas has been a leading company in the developing of new platforms that improve the efficiency of its activities and customers. For instance, our O&M team has been working on Digital Solutions for power plants, which can be applied to early anomaly detection to improve availability of plants and maintenance optimization. We partner with companies such as SparkCognition and Osisoft to develop new solutions for generators and help improve their overall performance. Q: What are the company’s priorities for 2021? A: In 2021, our goal is to understand the needs and attend to the requirements of the final customer – this translates into providing the optimal resources for generators to improve the performance of their assets and offering power solutions for C&I electricity customers that help reduce their power costs. In the face of shifting dynamics in the power market and the world, it is important that clients have reliable partners during volatile times.

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State of the Industry | 15

Off-Takers Have Potential to Shape Future of Mexico’s Renewables Whenever there is an opportunity to kill two birds with one stone, the smart investor acts. That scenario has developed for off-takers, prompting these large energy users to look more closely at their supply. “Interestingly, by meeting sustainability goals, consumers can save money too. Technology costs have decreased dramatically in the last decade and are predicted to drop much further,” says María José Treviño, Country Manager of Acclaim Energy, referring to the reduced levelized cost of energy (LCOE) associated with renewable technologies. A BloombergNEF analysis demonstrated that wind and solar are the cheapest ways to build new energy capacities around the world. Also, a slowdown of the drop in LCOE is not even in sights. In fact, from 2H19 up to April 2020, the indicator fell 9 percent and 4 percent respectively for onshore wind and utility-scale solar. Developments in the market, where CFE aims to favor the firm-energy based stability of its own plants over cheap but intermittent private renewables, might have an adverse effect on Mexico’s energy prices. Due to this rise in energy prices, off-takers will be encouraged to arrange their energy supply elsewhere, Gilberto García-Ruiz, Business Development Director at Edison Energy told MBN. “Specifically, due to these changes, clients are looking to safeguard their energy supply, knowing that at some point CFE will increase its rates. They are also looking for alternatives in terms of what they can install on-site to generate their own isolated supply.” Despite the potential gains, there are several hurdles for new off-takers in securing cheaper, cleaner energy supply through the private sector. For starters, many are not yet aware of the opportunity. “There are many companies that have the amount needed to be off-takers, with more than 1MW, but many are not aware of this,” says Yolanda Villegas, Head of Legal Affairs at Eon Energy. As a result of this lack of awareness, renewable energy developers are having a hard time finding off-takers. “Finding bankable off-takers to sign PPAs is another challenge. Apart from CFE, there are not many possibilities in the market,” affirms Fernando Salinas, Managing Director Mexico and Central America at Fotowatio Renewable Ventures (FRV). While developing a renewables project without previous off-takers arranged through a full-merchant scheme was a possibility not too long ago, PPAs are essential today more than ever, especially now that uncertainty has taken root in the sector. Players in the distributed generation (DG) segment, especially in the area of solar, expect to see more business. After all, as long as a project stays below the 0.5MW threshold, extensive permitting processes will not be needed at all. “For anyone Read the complete article

owning a large rooftop in Mexico, a solar system below 0.5MW should be a no-brainer,” says García-Ruiz.

he past year was marked by the pandemic and some topics that hijacked the discussion. The significant media attention on these problems, however important, and the lack of positive news from market participants overshadowed the impressive boom in

the private electric market and slowed development of additional market potential. For many companies 2020 was a year of major tenders for energy purchase and modernization of electrical solutions. We also have great opportunities in 2021 and distributed generation technology is advancing strongly. We must redouble our efforts and propose innovative solutions. Modernization, more than discussions about how to interpret laws, will mark the future of our industry. We have many challenges but even more opportunities in 2021. Energy Quality: Blackouts, voltage and frequency variations led

State of the Industry | 16

entrepreneurs to invest in emergency diesel generators, voltage

Looking Forward to Electricity Sector Opportunities Hans-Joachim Kohlsdorf Managing Partner at Energy to Market (E2M)

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regulators and UPSs. At the least, compliance with the current network code must move forward without further delay and without arguing lack of awareness. Sadly, the only quick way to implement swiftly the current network code seems to be through fines. Additionally, we must discuss how to include advances like inverters, batteries and smart grids in the code. Electricity Market: The Wholesale Electricity Market (WEM) advanced in 2020. The generation sector aligned its offer to consumer requirements to leverage new generation projects. Auction cancellations helped the development of the private market. Not having CFE as a big buyer incentivized generators to offer interesting options to the Commercial & Industrial segment. Distributed generation is progressing strongly, as are the companies designing and building these projects.

Modernization … will mark the future of our industry.”

Fuels: Today, most our fossil fuels come from the US. PEMEX does produce a lot of fuel oil, with CFE the only relevant customer. Natural gas has a great impact on our power generation matrix as a cleaner and cheaper fuel. The start of operations of pipelines also boosted cogeneration and on-site generation. The availability of cheap natural gas presents great opportunities for the country’s competitiveness. The business sector still has to negotiate a reduction in gas costs, and replace more and more boilers with engines and turbines to supply the thermal energy they require. How Do We Drive These New Opportunities? On-site solar generation is growing impressively, but this must not curb important innovation to ensure our network’s quality. Many support increasing the exemption threshold to 1.0MW from the current 0.5MW. However, the sector must drive innovation and accompany this with standards on inverter quality and battery integration to foster its continuous operation in case of blackouts. Mexico’s current interconnection standards for on-site solar place great stress on the grid and are completely outdated Cogeneration benefits diverse industries. We must also promote modernization by including batteries and integrating power

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plants into the WEM to generate maximum profit. Contractors still prefer repeating the pre-reform mistakes of generating only the equivalent of electricity consumption, not meeting the total thermal requirements and thus supplying excess electricity into the grid.

ata mining can help identify important tendencies in areas like politics, human behavior, economics, science, energy and culture. It has also provided business and political leaders with an indication of real trends, such as the increase

in and value of renewable energy. Renewable energy is a popular topic online and for so many positive reasons. More and more people are interested in learning about how renewables impact the environment, support climate change, its impact on costs and how they can access them (solar, wind, hydro, etc.). According to SEO Tribunal, experts in search engine optimization, Google supported 63,000 searches per second or 5.6 billion searches a day worldwide. As an energy-intensive user, the company joined the R100 group, together with over 250 companies that have set their renewable energy target at

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100 percent by a particular date in the future.

Mexican Businesses Want and Need Renewables. What are we doing about it? Maria Jose Trevino

These corporations, through their global leadership have demonstrated a real intent to lower their carbon footprint, take advantage of cost-efficiency solutions, and gain visibility, loyalty and interest from younger generations and investors that consider sustainability efforts crucial to the environment, people and the bottom line. In Mexico, we are observing the increasing trend of corporate sustainability compliance, some due to supply chain commitments, where their largest clients are performing audits on Environmental, Social and Corporate Governance (ESG) performance.

Country Manager of Acclaim Energy According to the International Renewable Energy Agency (IRENA), in 2018, over 100 companies had reached an 85-100

“

percent renewable energy mix worldwide. IRENA states that a third of the world’s energy comes from renewable sources,

IRENA states that a third of the world’s energy comes from renewable sources, mainly hydro, wind and solar.”

mainly hydro, wind and solar. The “Global Trends in Renewable Energy Investment 2020” report elaborated by the UN Environment Program and BloombergNEF mentions that there are already 87 governments around the world that have set renewable energy targets by 2030 in order to comply with international agreements. If we add government goals to corporate targets, these commitments will entail adding about 826GW of new capacity, which would translate to about $1 trillion of global investment during the next decade. The report states that although Mexico had 17 percent growth from 2018 to 2019 in renewable energy project development, Brazil increased 74 percent and Chile 302 percent within the same time period. The world is rapidly evolving, incorporating energy storage technology, microgrids and AI into society, so that consumers can achieve greater benefits. The collaboration between the government and the private sector to achieve sustainability commitments has proven to be positive but not fast enough or

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sufficient to meet the growing demand and needs. Mexico, are we preparing to join the growing global tendency or are we staying on the sidelines to watch investments and multinationals look for new countries to invest in?

Storage in its various forms is not a new topic for the global

State of the Industry | 18

What Will Make Mexico Truly Competitive in Energy Storage?

energy sector. In many countries, storage is already being widely implemented. In Mexico, however, there is a lack of a robust regulatory framework and little recognition of the auxiliary services that storage can provide. Yet, a few landmark examples of storage do exist. Small-scale technology is catching up fast as well. Mexico Energy Review asked industry experts where Mexico still needs to make progress in order for storage to break through in the market.

It is exciting for the company to start introducing battery backup systems to our projects in Mexico. One of the key components for batteries is the recognition for capacity, or capacity payments. This is something we do in the US, where it is a straightforward process. In Mexico, battery systems are not yet included in the capacity recognition structure. We will work with CRE and other authorities to make sure that this will be included. The whole issue with renewable energy is that it is intermittent. That has

Mario Pani Regional Manager Latin America at BayWa r.e.

been the main issue driving SENER’s reliability policy. But this issue can be resolved fairly easily. Therefore, we will be aggressively pursuing battery systems in Mexico for largescale solar.

There are two main factors. First, the learning curve on the customer side. They are becoming aware that such solutions exist and how their business could benefit from them. Second, the Mexican regulatory agency CRE has not defined the prices in Mexico’s spot energy market for ancillary services like frequency regulation. Once they define this, then you will have more companies wanting to add storage to their portfolio in order to participate in the market and increase their revenue streams. I would expect the energy storage trend to increase for projects

Arturo Zarate Global Business Development Energy Storage at Dynapower

in Mexico. As prices come down on lithium-ion batteries because of the increased volume of their use in electric vehicles and energy storage projects, it will become more interesting to developers in Mexico as well.

We see potential in implementing hybrid solutions, including storage in Mexico, although it might be some time before we see a deployment of this type of solution in the country. To develop storage solutions, more robust investment in transmission and distribution, along with a robust regulatory framework, are needed. Once this happens, the market can start implementing more complex solutions in the country. Storage is becoming an increasingly viable business in the world.

Jack Weisz Commercial Director Latin America of Onshore Wind of GE Renewable Energy

It will be a key enabler for the deployment and penetration of renewables in Mexico as well. Mexico already has some solar and wind projects that have incorporated battery storage technology.

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from the

Q: What is the history of Wärtsilä in Mexico and what are some of its success stories? A: The company’s successful journey in Mexico has lasted for over 27 years. In the past 5 years, we have tripled our installed base. There are many new projects with combined EPC and O&M contracts. Here, we deliver the power plant on an EPC basis and continue operating and maintaining it for the long term. Some of our recent projects include a 140MW power plant with a combined cycle for Huinalá in Monterrey. We are recovering heat from exhaust gasses and placing it in a steam cycle, which then aids in additional electricity generation via a steam turbine. This type is called a reciprocating internal combustion engine and is one of the most efficient solutions any company could have. We also delivered the full EPC and O&M package with a 130MW power plant, supplying industrial power for Pemcorp in Monterrey. The innovative plant operates in “island mode,” together with a battery storage system. Another project is a 110MW project in Chihuahua, which is the first in Mexico solely operating for the city’s newly created spot market. Mexico is an important market for our portfolio. The fundamentals of its market offer great potential. As with our power plants, we look forward to developing projects 20 to

Raúl Carral

30 years in the future. Therefore, it is important to assess the fundamentals of the country’s economy and not be led by shortterm economic trends. This applies to the impact of COVID-19 as

Business Development for Mexico, Central America and Caribbean of Wärtsilä

well. While this negative impact might be significant in the short to medium term, it will be resolved by global scientific efforts at some point. In the longer term, the economy will revitalize worldwide. Mexico, like all economies, has its upward and downward cycles. We look at the longer perspective as part of our core business strategy.

Flexible Power Engines the Missing Piece in Renewables Puzzle

Q: How will changes brought on by COVID-19 impact forms of energy generation in the future? A: The company’s vision remains the same. We strongly believe in renewable power and in a 100 percent renewables future. The strategy to make this happen is rooted in futureproof technologies. The company is predicting the future via a timeline, in which inflexible power generation technologies will be discontinued. Coal power plants will diminish significantly. Nuclear power plants are next in the phase, after which combined cycles with gas turbines will follow. The new baseload will become renewable power, which is the cheapest form of energy generation worldwide. Solar will take up the biggest part, followed by wind. Flexible power, such as battery storage and engine-based power make a big difference in how renewable power will be integrated in the near future. It can go from 0 to 100 within two minutes, which is indeed very flexible. In the future, there will be more surplus of cheap renewable power, allowing for the generation of synthetic fuels or hydrogen. We made a significant announcement recently that we can run our engines 100 percent on hydrogen. Q: How can the government spur Mexico’s switch to renewables?

A: To make up for the energy that cannot come from renewables during certain moments, flexible systems are needed. After all, wind can stop and the sun sets at night or is blocked by clouds. During these times, it is important to come in with firm power on a flexible basis that can go from 0 to 100 in a couple of minutes. Nuclear and coal power plants and combined cycle gas turbines are not very flexible. To power them up, you need many hours or even entire days to get them running. Therefore, they are not part of the vision for the new future of power generation. There are high costs when stopping plants like these, and you have to let them rest for quite a while before turning them on again. Engines do not have these issues. Think of them like modern car engines, where the engine stops when you wait for a red light, but comes right back in when you accelerate again. Having access to this can really help a country to switch to renewable power. In Denton, Texas, we sold a 240MW power plant. Eighty percent of the power used there came from renewables, such as wind and solar. Our engine power plant complements this. Electricity costs are incredibly low. We consider them the utilities of the future. Next to the environmental benefits, they generate a lot of money. It makes our clients very competitive in the market.

“

As to how the government can support this switch, it could happen in a smart, planned manner.”

As to how the government can support this switch, it could happen in a smart, planned manner. Renewables in Mexico are currently seen as a bit of a problem, as its intermittent nature makes it more complicated to integrate into the grid, which has not been planned for renewable integration. If you look at energy transition and renewable integration from a planning perspective, you can make energy affordable for everyone and strengthen CFE at the same time. CFE could be stronger and making a lot more money. CFE can be more competitive in terms of cost by having a plan on integrating more cheap renewable power together with flexible power. But there are other benefits as well, such as the positive environmental impact, which is considered crucial. We would all like to see a more carbon-free world. Leaving a cleaner planet for the future makes sense in all aspects. This is why I fully subscribe to a 100 percent renewables future.

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SPOTLIGHT

State of the Industry | 21

GridSolv Max Storage and Gems Energy Management Systems Renowned technology group Wärtsilä provides energy storage for the 50MW Eolica Coromuel wind farm located in La Paz, Baja California Sur. The system will deliver an output of 10MW and help the wind farm to meet strict grid code requirements, while being maintained and monitored remotely to ensure optimal performance at all times. The storage system comprises the company’s GridSolv Max containerized solution for the core hardware assets of the energy system—batteries, a built-in safety system and air conditioning. The system is able to control the wind farm’s ramp rate, which enhances the site’s energy generation reliability and provides frequency control, as well as further capacity for the grid. The cost-effective GridSolv Max system significantly boosts energy density and enhances energy reliability. Due to its innovative architecture, it is easily installed and integrated for any size or type of storage application. To boost the storage system’s capabilities, Wärtsilä applies its smart energy management system, GEMS, which connects energy assets to electricity markets and adjusts itself based on the market’s conditions through real-time optimization. In addition, GEMS supports the management of fluctuations in energy outputs, which can be caused by the wind’s intermittent circumstances. By directly addressing the customer’s energy needs, energy storage technology ensures that energy assets are future-proof.

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Natural Gas Cheaper, cleaner and more future-proof than any petroleum-based fuel oil, natural gas still remains a crucial staple for Mexico´s energy transition. Combined cycle power generation, already an important ingredient in the Mexican energy mix, will be expanded further to accommodate the country’s energy baseload. Other than this type of firm energy, flexible solutions can run on natural gas as well. As a result, commercial and industrial users are looking toward the advantages natural gas can provide. In such an environment, Mexico stands to benefit from an expanded and reliable natural gas distribution network. After all, distribution of this imported gas throughout the country can be a great catalyst for national development. However, recent setbacks regarding natural gas imports and distribution have demonstrated the need for the national agenda to contemplate a storage strategy. Issues regarding natural gas distribution and storage in Mexico, as well as the latest technological developments are examined in this chapter through the insights of key players in the industry who outline their assessment of the current issues, new developments and future opportunities.

Natural Gas

Analysis Expanding the Potential of Mexico’s Baseload Fuel

View From the Top José García | President of AMGN

Conference Highlights

View From the Top Michael Ward | CEO of Mirage Energy

View From the Top Alberto Escofet | Country Manager of Enagás

View From the Top Jan Frowijn | Vice President USA, Mexico and Central America at Rosen

View From the Top Alejandro Peón | General Director of Naturgy Mexico

Analysis Technology Could Make Natural Gas A Better Bet

View From the Top Bulmaro Rojas | Vice President of Operations LATAM at Generac

View From the Top Aldrich Richter | Managing Director of MAN Energy Solutions Mexico

Roundtable Where are the Opportunities with Natural Gas?

View From the Top Tania Ortiz | Director General of IEnova

Spotlight Generating Energy for Mexico for Over Two Decades | IEnova

Content Links

Natural Gas | 26

Expanding the Potential of Mexico’s Baseload Fuel Due to the inherent benefits of natural gas, demand from both CFE and private industry continues to rise. Imports reached a record high in 2020, climbing to 5.9 bcf/d on June 10, according S&P Global Platts. Amid the unabated growth in demand, challenges are emerging. In particular, infrastructure is at a tipping point, and therein lies the opportunity. PRODESEN 2020-2034 shows that Mexico relies heavily on natural gas to fuel its power production, with gas-fueled combined cycle plants alone representing 38 percent of installed capacity. How this percentage will grow relative to other energy sources remains to be seen, yet the government’s inclusion of combined cycle power plants in its recent infrastructure packages and development plans guarantees that capacity will continue to expand. SENER also expects that domestic demand for natural gas will increase until at least 2031. Growing demand among industrial consumers poses a further challenge to be met by Mexico’s distribution infrastructure. In the Mexican automotive sector, for instance, companies such as General Motors and Volkswagen use natural gas to provide power to their production facilities. Natural gas can be used as a lever toward development as well, says Tania Ortiz, Director General of infrastructure giant IEnova: “Mexico is an exporting and manufacturing economy. Providing an adequate energy supply is crucial to the country’s growth and hence, the creation of jobs for its citizens.” Importing natural gas has also become easier in the past year, as several pipeline projects were completed successfully. The Wahalajara-system, for example, was finalized with the addition of the 0.89 bcf/d Villa de Reyes-Aguascalientes-Guadalajara (VAG) pipeline, connecting Texas’ Permian Basin production area with Guadalajara. The US Energy Information Administration (EIA) projects that imports will increase further. The Sierrita pipeline expansion is another example of such an expansion, allowing for wider access to natural gas in Mexico’s northwest. In other areas, players like Mirage Energy are planning to expand the San Fernando-Cactus pipeline to the benefit of industrial parks in Puebla. Nevertheless, much work remains to be done. “Mexico will need more physical pipelines to interconnect the main pipelines that already exist in the country,” said Alberto Escofet, Country Manager of Enagás, in an interview with MBN. Whether Mexico should produce its own natural gas has also long been a discussion within the country’s energy sector, where the economic argument for cheaper importation has long prevailed. Yet, several industry experts disagree with this approach. Read the complete article

“Mexico should have been producing its own gas for a while now,” said Escofet.

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from the

Q: What was your mission for AMGN after you became president in late 2020? A: The natural gas industry has always been committed to Mexico. As president of AMGN, my objective is to contribute to the achievement of the country’s goals and to maintain a permanent dialog with the sector’s authorities, as well as to promote investment, bearing in mind that 2020 represented a challenge for all countries due to the COVID-19 pandemic. Economic reactivation in the short and midterm is key. Q: How has AMGN approached social responsibility during the pandemic? A: For our affiliated companies, the focus was to guarantee the safe and continuous gas supply to all Mexican citizens, as well as to ensure the safety and well-being of all our workers, especially under strict sanitary protocols. Since we are an essential activity, it was important that the work did not stop. Similarly, it was a priority to guarantee transport, commercialization, distribution, storage, Vehicular Natural Gas (GNV) and the supply of materials that keep the industry’s infrastructure operating during the contingency for the benefit of homes, commercial and services companies, as well as public transport.

José García

Q: How can AMGN help to prevent natural gas shortages in Mexico?

President of AMGN

A: It is important to point out that the shortage that occurred in Mexico in early 2021 was an extraordinary event for North America. It was the first shortage in over 100 years. Natural gas has positioned itself in Mexico as a lever for development, for industries, small businesses and a growing number of homes. It

Investment, Talks Lead to New President’s Agenda

is important to push storage policies to prevent situations like these from happening. It is also necessary to have a reliable system of pipelines that allows us to bring natural gas into the entire country and generate economic development, investment and employment opportunities. We still have a great deal to do, working together the three levels government and the industry to bring natural gas to the entire country. Q: What role will the private sector play in the development of Mexico’s natural gas market? A: The companies in AMGN are committed to the country, they work together with the authorities to bring natural gas to more people, while boosting economic development across the country. Our priority is to contribute to the use of natural gas because it is a fuel that is eco-friendly, it is very safe and it stimulates competitiveness. Q: What will AMGN’s direct priorities be for 2021?

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A: We will work and invest in Mexico, mainly in projects that will allow us to deliver natural gas to the southeast of Mexico and boost the region’s economic development. In addition, we will continue supporting the areas that already have a natural gas supply.

Conference

Natural Gas | 28

Highlights

Natural Gas to Boost Mexico’s Development Diana Piñeda Partner at González Calvillo

Areli Covarrubias Commercial Director at IEnova

Hector Moreira Commissioner at the National Hydrocarbons Commission

José Aparicio CEO of Siemens Energy Mexico

Aldrich Richter Managing Director of MAN Energy Solutions Mexico

Alma Flores Expert in Regulation

atural gas is a transitional resource that is allowing Mexico to go from fossil fuels to renewable energy. However, this transition does not need to move too fast and the country can take advantage of this resource to boost its development. This was one

of the conclusions reached during the panel “From Source to Consumer: Gas Distribution and Infrastructure.” Experts agreed that natural gas is and will be the most important resource for generating energy and that recent blackouts have demonstrated the importance of improving the country’s energy security. The panel was moderated by Diana Piñeda, Partner at González Calvillo. It featured Areli Covarrubias, Commercial Director at IEnova; José Aparicio, CEO of Siemens Energy Mexico; Aldrich Richter, Managing Director of MAN Energy Solutions Mexico; and Alma Monserrat Flores Estrada, Expert in Regulation. Covarrubias explained that in the last 15 years, Mexico has made an important effort to strengthen its infrastructure. “Ten years ago, we had very restricted systems and natural gas could only be used for specific industries and areas. Today, we have a completely different panorama.” Covarrubias said that to increase Mexico’s energy security, the country has to diversify its energy sources and improve the current natural gas infrastructure to meet national demand. Aparicio, emphasized that natural gas remains the main resource for energy generation in Mexico. “If we add energy storage to our power plants, based on combined cycle technology, we can help prevent blackouts by ensuring stable energy around the clock,” he said. Richter highlighted that natural gas is a transition resource from more polluting resources to renewable energy and explained that the Mexican transition could last a long time, which is the perfect opportunity for the country. Many countries have joined the natural gas trend, as renewables have the problem of intermittency. However, these problems can be solved by incorporating a sophisticated operator system that predicts these fluctuations or by having robust storage infrastructure. Flores Estrada emphasized that natural gas is the most important resource for the development of the Mexican economy. There have been many efforts made by the

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government to improve the natural gas supply problem. “However, we need to increase them to meet the demand,” she said.

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from the

Q: How is the company working to convince the government of the need for Mirage’s 786bcf storage project? A: Storage is essential for the Mexican government, whether it prioritizes it or not. The fact is that if a natural gas interruption occurred regarding gas coming in from the US, it becomes a disaster. If such a disruption occurs, Mexico has around three to four days of linepack “stored” in its pipelines and LNG facilities. After this, everything stops. With our storage facility, we can provide up to six months of natural gas supply after it has been fully developed. This will take some time. However, we are not developing this only as a strategic reserve, but as a commercial operation of which industrial players can benefit. Q: What will the company’s integral pipeline project look like? A: Concerning pipelines, a 42-inch pipeline is to be built. The line goes from the Agua Dulce-Banquette Hub toward Progreso, then crosses the border 27 miles into Mexico. After this, the pipeline travels west to Station 19. We are building a parallel line from this station down to Los Ramonas. The line will also feed the storage facility. We will have a 50,000HP compression set there, as well as 25 injectors. With that, we can inject 0.5bcf of gas per day for storage purposes. Regarding the storage, we are working on a deal to rehabilitate the San Fernando-Cactus pipeline. This was originally built to bring

Michael Ward

gas from the Bay of Campeche up north and designed to travel into the US. Nevertheless, that piece was never built because the deal fell apart. It is a single-direction right now as there is no gas coming from Campeche. We will refurbish the pipeline,

CEO of Mirage Energy

with new compression, new meter stations and instrumentation to make it bi-directional again. The line will travel to Nuevo PEMEX. We have an interconnection agreement here. All the gas will come inexpensively from the Permian basin.

Ready to Move on Crucial Natural Gas Infrastructure Projects

Q: How is Mirage Energy preparing to sign deals with private players and state governments, such as Puebla’s Ministry of Energy? A: We have signed a deal with the Ministry of Energy of Puebla. The goal is to develop a line to feed an industrial complex that they are building. The line will be fed with the gas coming from the San Fernando-Cactus line. It appears that we can use the right of way that had been established for the highway. We have spoken to numerous enthusiastic industrial consumers as well. In fact, in almost every city we pass with the pipelines on the eastern coast of Mexico, industrial players are anxious to see them built. We receive calls on a daily basis from interested potential customers. It will even attract new manufacturing, which would propel much needed employment. Q: What would the timeline look like for Mirage Energy’s projects once they get the green light via permits? A: From the time we get the permits for our pipelines and storage facility, we can be operational in 18 months. The

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Isthmus Corridor project will take us six to seven months to transport the first actual product across the corridor. This includes the rehabilitation of the docks, tankage, monobuoys and existing facilities. The rehabilitation of the San FernandoCactus pipeline should take 12 to 18 months.

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from the

Q: How is Enagás planning to add more projects to its portfolio? A: We have been closely following developments in Baja California. We have also been monitoring CENAGAS’ five-year plan. Enagás is reviewing where it can participate in this regard, especially in the southeastern region of Mexico. Furthermore, the company has given serious attention to the theme of virtual pipelines. The portfolio is a mix of virtual and physical infrastructure. Baja California, for instance, would benefit from a mix of these infrastructures. We also look for opportunities around the border region with the US as many things are moving there. Q: How would you assess the balance between physical and virtual pipelines? A: Liquefied natural gas (LNG) has a leading role, and it can be transported over long distances. Most of the coming gasification efforts will be done on wheels, using virtual pipelines instead of physical pipelines. Mexico will need more physical pipelines to interconnect the main pipelines that already exist in the country. I think the gasification of new sites will be done using virtual pipelines. This has the advantage that almost nothing needs to be done.

Alberto Escofet

LNG can be transported via trucks, so unlike pipelines, no special permissions or rights of way need to be established through contracts. You can use the existing highway.

Country Manager of Enagás

However, the infrastructure to liquify natural gas will need to be built and interconnected with a pipeline close to an existing market. Using this method is the easiest and most cost-effective way to bring gas to regions that need to be more economically competitive. To lure industry, you need a reliable energy source.

Gas Infrastructure is Basis for Sustainable Future

There is enough capability within the existing network of pipelines to supply demand in a very short period of time. Q: How important is R&D in Enagás’ plans? A: It is crucial and Enagás is making great strides in this area. Efficiency and reducing environmental impact are important, but developing new technologies and uses for natural gas are important too. These include developing biomethane, biogas and hydrogen. You can use the current infrastructure to transport hydrogen, for instance. Green hydrogen has no emissions at all and is especially interesting because it is generated using renewable energy. This hydrogen can be used for energy generation, but also to power any type of transportation method. Enagás is dedicating a great deal of resources to developments like these, on ways to fight climate change and reduce emissions, as well as introducing renewable aspects to the natural gas market. It is just a matter of time before these technologies take over the market.

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There are companies, universities and associations in Mexico working on hydrogen developments, and they have been doing so for 20 years. The area simply does not receive the same amount of publicity. Enagás is open to making further alliances with these parties.

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from the

Q: How has ROSEN Group responded to the challenges of 2020? A: At the end of 2019 and the beginning of 2020, we had big plans for 2020. This changed as 2020 was dominated by the uncertainty resulting from the COVID-19 pandemic. The ROSEN Group operates all over the world. There were all sorts of challenges comparing countries and regions. Worldwide and looking at our operations in Mexico and Central America, our main priority is first and foremost the health and well-being of our employees, their families and the community. Our work consists of preparing tools and specialized equipment in the workshop, inspection activities in the field and the analysis and preparation of inspection reports and engineering assessments in the office. Most of our office personnel started, really without any significant interruptions, working from home in March of last year. Right from the start, we implemented strict protocols in the workshop and we continue to work together with our customers to prevent the spread of the coronavirus in the field. Q: How is the company helping its clients to switch from reactive to preventative maintenance? A: We employ a rigorous Integrity Management Process. We

Jan Frowijn

understand how assets deteriorate and we work together with our customers to prevent failures and keep people and the environment safe. Accurate inspection data is the key to integrity management. Our customers appreciate our

Vice President USA, Mexico and Central America at Rosen

innovative and reliable inspection technologies and decades of experience. We have inspected billions of square meters with ultrasound, eddy current, magnetic flux leakage, EMAT, optical and acoustic technologies. Each time an inspection or technical service takes place, an enormous amount of measurement and

Preventing Failures, Keeping People Safe

operational data is accumulated. Raw data must be interpreted and analyzed to transform data into information and information into knowledge, ultimately enabling smart integrity decisions for preventive maintenance or repairs. Nothing is better suited to achieve this than the increasingly available methods of artificial intelligence. The ROSEN Group’s data scientist and integrity engineering teams, one of the largest in the industry, work together with customers and partners to get the most out of the data to facilitate reliable and real-time decisions for the safe operation of assets. Q: What does the company hope to achieve by the end of 2021? A: The ROSEN Group in Mexico is seeking to continue to support the Mexican Energy sector – and the pipeline industry in particular. Our goal is that customers don’t just value us on how smart our technology is or even how innovative we are. It is results that matter. Our goal is to continue to build confidence in our solutions and the trust of our customers as the undisputed leading integrity partner in Mexico, in both the private and public sector. For both the critical oil and gas infrastructure and importantly also the transition toward a cleaner energy future.

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We need and want to do this together with our customers and seek to foster collaboration with industry stakeholders and our employees. We strive to be an exemplary employer that offers our employees growth opportunities and an environment where everyone can be their best.

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from the

Q: What was Naturgy’s experience in 2020 and what are its main objective for 2021? A: Without a doubt, 2020 was a challenging year for people, companies and for all sectors of the economy. We are convinced that in extraordinary situations like that which we are living, having access to natural gas is essential for businesses, homes and industries alike, in terms of competitiveness, as well as comfort and safety. We have always guaranteed continuity in our service, which means the distribution of natural gas to our customers. In 2020, we offered a free supply of natural gas to all public hospitals, which were connected to our distribution networks during the two most complicated months of the pandemic. Naturgy and its collaborators contributed with a donation to the Mexican Red Cross, destined for the purchase of medical supplies. We also offered one year of value-added services to clients who were among the frontline responders against the pandemic, such as doctors, nurses and the police. For 2021, our main focus is to provide our customers a safe and modern service. For this reason, we have made significant investments in technology that allows our clients to use their cellphones to consult and pay their bills conveniently. We are also offering our service to potential users in areas where we

Alejandro Peón

already have a presence to provide them with access to safe, convenient and modern energy. Another of our objectives is to continue promoting

General Director of Naturgy Mexico

vehicular natural gas for state and municipal governments in Monterrey and Mexico City. These efforts will improve the competitiveness of public transportation and improve air quality. In addition, we will continue to promote the supply of energy solutions for companies to optimize their consumption

Gas a Natural Enabler for Mexico’s Development

and energy savings. Q: How did Naturgy adapt its strategy to the unforeseen gas shortages Texas suffered due to extreme weather conditions? A: We collaborated closely with the CENAGAS and with the suppliers of natural gas molecules to manage the situation caused by weather conditions in Texas. We also maintained close communication with the industry’s main consumers to reduce consumption as a preventive measure. This helped guarantee supply to strategic facilities and homes connected to our distribution networks. Q: How will the company’s plan to use five-year bonds on the BMV benefit your future strategy in Mexico? A: These bonds will improve our debt structure with better market conditions, extend its life average and develop distribution network expansion projects in areas where we already have a presence. Q: How do natural gas projects like those Naturgy promotes impact Mexicans? A: We are convinced that natural gas projects can provide a higher quality of life and this is done by reducing inequality through the development of businesses and industrial and

economic development. It has been shown that states with access to natural gas have a stronger development than states that do not have access to this fuel. We are focusing on strengthening our presence in areas where we already have a distribution network. We believe that by connecting more users we will achieve a stronger regional development through the supply of natural gas. Q: What differentiates the social focus of the company in Mexico from its competition? A: Companies in the energy sector, especially natural gas distributors, are aware of the positive impact they can have on all sectors of society. In addition to the intrinsic potential of energy, we have developed action plans to benefit areas where we have distribution networks. These plans cover topics such as proximity to clients, creating opportunities for professionals, economic benefits for local suppliers, improving environmental impacts and identifying energy vulnerability.

“

We believe that by connecting more users we will achieve a stronger regional development through the supply of natural gas”

As part of our Social Responsibility Policy, we help people who have been affected by this global pandemic. In this regard, we carry out actions to support medical personnel who are combatting COVID-19 on a daily basis. First, we donated MX$1 million (US$49,000) to the Red Cross for the purchase of medical equipment. One-third of that was contributed by our collaborators and two-thirds by the company. Second, for two months, we provided our natural gas service for free to more than 60 public hospitals that are connected to our distribution network. Third, we launched the “We take care of your energy” initiative. The initiative grants one free year of our service and maintenance for the frontline responders who happen to be our customers. We are committed to Mexico. Therefore, we want to reach more people and introduce efficient, affordable, environmentally friendly and safe energy to families, shops and industries.

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Natural Gas | 34

Technology Could Make Natural Gas A Better Bet It is no secret that Mexico relies on natural gas and use of the cleanest burning fossil fuel has been growing steadily. Although the COVID-19 pandemic resulted in a slowdown in demand, the country’s energy needs will require a stable input for the foreseeable future. Its bet is on natural gas, and emerging technologies could make that bet a winning position. According to PRODESEN, Mexico relies on combined cycle technology to turn natural gas into firm power. This type of power plant uses two turbines: one powered with natural gas and the other powered with the heat generated by the process. As of October 2020, combined cycle plants represents 59.6 percent of energy produced in the country. A further 4.4 percent comes from turbogas plants, which rely on natural gas as well. Even though other thermal energy sources, such as the country’s internal combustion engines, cogeneration facilities and conventional thermal energy make use of Mexico’s more polluting fuel oil, these facilities could still be adapted by switching to natural gas. Technology plays an important role when it comes to natural gas. For its transport, intelligent pipeline systems allow for continuous monitoring, making predictive maintenance a possibility. Natural gas, while much cleaner than other fossil fuels, still has a notable carbon footprint, notes Yolanda Villegas, Head of Legal Affairs of EON Energy. “Regarding the Paris Agreement, the energy transition act excludes combustion generation, including natural gas, as a clean energy source for power production. If this production has a quantity of greenhouse gas emission greater than 100kg of CO2 per megawatt-hour, then it is not a clean energy. For Mexico’s combined cycle generation, the average is 400kg, meaning we are way past this line.” To counter this, SENER has said it intends to use carbon capture technology. Then there is hydrogen. While considered an expensive fuel for energy generation worldwide, confidence in the resource is increasing rapidly. In the EU, hydrogen is championed as a key energy resource for post-COVID-19 economic reactivation plans. It is positioned to become an integral part of the trillion-dollar US plans toward decarbonization as well. To generate hydrogen, companies facilitate water electrolysis. Electric currents are used to split water into hydrogen and oxygen. Less cleaner forms of hydrogen, called blue and grey hydrogen, feature fossil fuels in the process, meaning they are not 100 percent renewable. Green hydrogen, however, uses renewable energy for electrolysis. For a country increasingly focused on natural gas, such as Mexico, hydrogen can prove to be advantageous. “You Read the complete article More about this topic

can use the current infrastructure to transport hydrogen,” says Escofet.

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Q: How has your company evolved in Mexico and what services does it provide? A: Generac acquired Ottomotores in Mexico in late 2012, followed by Selmec in June 2018. The key to our success was the purchase of these two companies that focus on the manufacturing of energy generators. Generac, the leader in the US in this segment, has over 60 years of experience. In total, we boast over 200 years of experience. Generac provides the technical and financial support, which has resulted in the ideal company mix. We focus mostly on the following sectors: residential, commercial and industrial, data centers, and the telecommunications and health sectors. The latter three have grown especially in the past year. We manufacture energy generators, ranging from 10KW up to 3.2MW in a single motor. Furthermore, we commercialize and distribute various products running on gas in Mexico and Latin America. Q: How has demand for the company’s products evolved during the pandemic? A: Various Mexican hospitals have been equipped to deal with the pandemic. We are supplying many of them with power generators, as we are a direct supplier of the Ministry of

Bulmaro Rojas

Defense who is in charge of this project. We provide solutions to Mexico’s new Welfare Banks as well. Q: Which products in the company’s portfolio are experiencing

Vice President of Operations LATAM at Generac

the highest demand and how do you expect this to evolve? A: We are experiencing an uptake in demand. Solutions that range between 5KW and 200KW are in greatest demand. Diesel beats gas narrowly in terms of the fuel they run on.

Generating Energy Stability Where Mexico Needs it Most

The products that run on gas are growing in demand. This is thanks to our national natural gas infrastructure, which is growing steadily. With data centers, capacity is being reduced. Before, the trend was to have large data centers, powered by 2.5MW generators. Now, we are seeing micro data centers, which will need smaller equipment of around 0.5MW to 1.5MW, running on either diesel or gas. Q: How has the company’s natural gas business developed in Mexico? A: Generac leads the worldwide segment of natural gas-based generators in terms of quantities manufactured and sold. We have three major development centers, where we develop new equipment and motors. These are very efficient and cleaner, and have a lower environmental impact. They are tied to the development of Mexico’s and Latin America’s infrastructure as well. We already have solutions in place, but depend on these project developments to deliver our solutions.

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Unfortunately, gas is still seen as a liability in Latin America. Because we live in an area prone to earthquakes, people think a gas pipeline poses risks. However, infrastructural safety is up to a very high standard and able to deal with such natural disasters.

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Q: How has demand for MAN Energy Solutions evolved in the past year? A: It has been a rather challenging 2020. However, demand for our products and services have not decreased, especially in a country like Mexico, where industrial customers in the petrochemical and steel industry still produce for local and foreign markets, container and tanker ships move products around and there is a need for a lower cost and higher quality energy supply. Our Power business offers customers firm power supply generated via large gas engines that produce electricity around the clock plus the possibility to increase overall efficiency via a heat recovery steam generator and integrate renewable energies for a perfect combination. We have invested heavily in solutions for decarbonization, allowing the world to secure the energy we need while lowering the environmental impact. Q: How does MAN Energy Solutions help bring natural gas benefits to users? A: In our solutions portfolio, we also have technology that can bring gas closer to users. This can be done most economically for regions in Mexico, that have no access to the pipeline network through compressed natural gas. We have invested in a CNG solution, that enables us and our partners

Aldrich Richter

to compress natural gas efficiently and cost-effectively, and then transport it via a virtual containerized pipeline. Combined with our gas engine generation sets either in a power house or a containerized configuration, we can help our customers

Managing Director of MAN Energy Solutions Mexico

in Mexico to use CNG in their manufacturing process and the possibility to generate their own power anywhere in the country. Larger scale LNG projects in Mexico, such as the Costa Azul or Salina Cruz facilities, are all focused on export: they liquefy natural gas on a large scale and aim for the international

Small LNG plants, Virtual Pipelines Can Meet High Gas Demand

markets. With our CNG solution MAN ES offers a different type of project, suitable for many locations in Mexico where there is no access to a gas pipeline and power from the grid. Q: Where do you see MAN Energy Solutions in 2021? A: First, our largest business in Mexico is related to turbomachinery. We are suppliers of large-scale compressors and complex turbomachinery trains for the refining, petrochemical, steel and air separation industries. Second, MAN Energy Solutions offers services for the power and marine industry. Most of PEMEX’s tankers that transport refined products along Mexico’s coasts, container ships and cruise ships use our engines for their main propulsion systems. Smaller sized vessels that guard our costs also use MAN ES engines. This is also an important business for us. The power projects are also extremely important for our future success in Mexico. We feel very comfortable in participating in the range from 10 to 250 MW. However, we also offer small gensets below 0.5 MW for distributed power. Mexico has a great demand for these types of projects. We are also focused on

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new solutions, such as Power-to-X, where the x can represent hydrogen or other alternative fuels with less of an impact on the environment. Factory LNG is another important focus. We offer a diverse mix of products and services for the market and we are aligned for success in Mexico.

Natural Gas | 37

Where are the Opportunities with Natural Gas?

The role that natural gas plays in Mexico’s energy mix continues to grow. Close to 65 percent of the country’s power-producing capacity already relies on the fuel, which is mostly imported from the US. Due to this dynamic, there are still many untapped opportunities regarding natural gas. Mexico Energy Review asked industry experts where the areas of opportunity can be found.

In Mexico, the concept of sovereignty is often discussed. The fact that we import so much gas undermines this. The US only exports dry gas, without ethanol and other beneficial liquids associated with gas production. Mexico’s main focus is on the petrochemical business, where these byproducts generate much added value, whereas dry gas does not. The US also could ban fracking. If this happens, Mexico might face uncertainty concerning our energy because we are not exploring our own resources. Eventually, Mexico might be forced to produce its own gas. Studies conclude that the country has promising potential for gas production in the northern part of the country.

Yolanda Villegas

If an affiliate of PEMEX or CFE decided to start natural gas production, it would be a great boon for Mexico.

Head of Legal Affairs at Eon Energy

Mexico should have been producing its own gas for a while now. I do not know the exact production figures at the moment. Mexico has a lot of reserves, but more than just necessary CAPEX spending, it is also a political issue. The question is if Mexico needs to move quickly or if it can wait. I think it should start with some investments and exploration, but for this to happen a strong E&P company needs to take the helm. PEMEX can no longer take on these projects, so the private sector needs to be invited. There are many things that need to be done before Mexico can think of starting its natural gas production. It depends on Mexico’s will to do it because the technology

Alberto Escofet

involved is not rocket science. In the meantime, the country will have to depend on imports.

Country Manager of Enagás

The opportunity to develop a natural gas liquefaction project in Mexico for export to Asia arises mainly from the cost reduction that can be obtained by having a port of departure for the gas in the Pacific coast instead of one in the gulf coast that requires a route longer and therefore represents higher costs. In Addition to this, there is the existing pipeline capacity that in principle would allow to import cheap gas from the US and to transport it to the Pacific coast in Mexico. Nevertheless, the success of the project depends on the capacity to liquify the gas at low cost so that it can be sold to areas where gas is more expensive.

Gerardo Serrato Managing Director Mexico at Hartree Partners

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Q: What is IEnova’s background in Mexico’s energy infrastructure market? A: In a nutshell, IEnova is a leading Mexican energy infrastructure company. Our main focus is to develop critical infrastructure that enables a more reliable and sustainable supply of energy in Mexico. All our assets are contracted long term through takeor-pay contracts, the main basis of our economic viability and cash flow. We have sustained our growth by branching out into different areas of the energy sector. IEnova also has a robust sustainability strategy at the core of all its activities. Today, our key initiatives are part of three separate business segments. We are present in natural gas, where we operate pipelines, gas storage and distribution facilities. Our other two segments are energy generation and energy storage. Finally, our most important initiative is our Energía Costa Azul liquefaction facility in Ensenada. This is a natural gas facility that was developed originally to bring gas into North America. Now, because of the global market dynamic, we are looking at investing into the facility to allow us to liquify natural gas there. Later, we would distribute this gas to isolated markets in Mexico and abroad. Right now, IEnova is very connected to the North American region. We are among the leaders in terms of cross-border

Tania Ortiz

energy infrastructure for both gas and power. This is one of our most exciting initiatives, because it opens a position for us as a global player.

Director General of IEnova

Q: How can natural gas be a catalyst for Mexico’s development and what is the company doing to support this? A: Mexico has the unique opportunity to take advantage of North America’s low gas prices. Although the country is a

Enabling Mexico’s Economic Development Through Energy

net importer of gas, the general dynamic and location next to the US, which is an exporter, allows us to turn this into an opportunity. We need to ensure that Mexico has the appropriate infrastructure to import gas from the US and deliver it to end consumers and the industry alike. The latter is especially important because Mexico is an exporting and manufacturing economy. Providing an adequate energy supply is crucial to the country’s growth and hence, the creation of jobs for its citizens. We are also active in the gas transportation segment throughout the border area. We own pipelines in every border state, from the west coast to the Gulf coast. Through a joint venture with TC Energy (formerly TransCanada), we own a marine pipeline in the Gulf of Mexico. Through this cross-border pipeline network, we are enabling the supply of US gas into Mexico. We also have three gas distribution companies in northern Mexico. Our responsibility is to deliver gas to each household and business. We serve to more than 132,000 consumers. To combat COVID-19, for several months we supplied natural gas services to hospitals for free. Q: Where and how is the company identifying opportunities regarding critical storage infrastructure? A: Underground storage is critical for Mexico, since the country has no storage capacity at all at the moment. If we were to

experience a disruption in the gas load due to bad weather or major maintenance, it would result in severe disruptions. Storage can mitigate these disruptions. One particular policy requires Mexico to possess a certain amount of storage. The administration has yet to take further steps and decide how they wish to implement this policy. Regardless, we are very interested in participating on the ground to define what the ideal location would be. Some options include depleted oil reservoirs or salt caverns. We have done quite a bit of field work already but there are some decisions that need to be made before we can move forward on this front. Q: What are the key components of IEnova’s community approach? A: To begin, one has to understand the community’s needs and concerns. You need to make sure that you communicate clearly. At times, misinformation is par for the course. Therefore, it is necessary that the community understands exactly what you as a company are going to do and what benefits you intend to provide them. For example, we have a wind farm located on the border with California, in La Rumorosa, Baja California. When we started this project, we were concerned about how the community would react. But when we approached them, they told us that the land we wanted to lease was not suitable for agriculture or cattle. This area is known to have security issues, such as trafficking of illegal goods or even people. The community considered our investment as a means to address their concerns. First of all, they received a portion of the project’s revenue. Secondly, we built illuminated roads and arranged security details. All the illegal trafficking has moved elsewhere as a result. In another example, we built a community center with a library in a very isolated community. We also bring doctors who provide medical checkups. As a result, we receive calls from community members whenever one of our wind turbines stops rotating. They want to see it fixed because they are part of the project and want to see it fare well. We also built a solar project in that same area. During its inauguration, neighboring ejido owners approached us to ask if we could build solar panels on their land as well. If you align your interests, it pays off. This is not simple: you need to invest time and money and listen well.

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SPOTLIGHT

Natural Gas | 40

Generating Energy for Mexico for Over Two Decades For more than two decades, IEnova has committed itself to Mexico’s sustainable growth through the development of energy infrastructure that has allowed it to generate social, environmental and economic value in every community it serves. Through its three business segments — electricity, storage and gas — the company contributes to the country’s energy security. In the gas segment especially, it works in transportation, distribution and storage for the benefit of Mexican households, shops and industries. Through its Ecogas subsidiary, IEnova distributes natural gas in seven cities in four states thanks to an extensive network that allows us to meet the needs of more than 136,000 commercial, residential and industrial customers in strict adherence to the highest standards of quality and safety. These standards have allowed the company to win important recognitions from local and federal authorities for being a Family Friendly Company, Environmental Excellence and Clean Industry. Natural gas is considered a vital fuel in the growth and development of Mexico. Today, it is used in more than half of the electricity generation in the country and is one of the main inputs for the manufacturing industry. In addition, natural gas has proven to be the safest, most reliable and environmentally friendly fuel. Considering these characteristics, it has been shown that the cities that make use of this service see a significant impact on their GDP, the generation of jobs, the development of opportunities and therefore, the social welfare of their residents.

Mexico’s Future Is Tied to That of Natural Gas Héctor Moreira Commissioner of CNH

Technology Giant’s Energy Spinoff Stays on Top of Transition José Aparicio President and CEO Mexico, Central America and the Caribbean of Siemens Energy

A Diverse Portfolio, Part of ATCO’s Strengths Pierra Alarie Managing Director LATAM at ATCO Group

Energy Tariffs Tailored to any Demand Yolanda Villegas Head of Legal Affairs at Eon Energy

Know-how to Break Mexico’s Unfair Commodity Trade Balance Gerardo Serrato Managing Director Mexico at Hartree Partners

Mexico’s Industry Could Cut Energy Costs in Half via CNG, NGV Andrés Bayona CEO of Promotora Energética E3

Liquified Natural Gas: Mexican Industry’s Optimal Option Caio Zapata Director General of Énestas

Puebla Ready to Capitalize on its Energy Potential Rodrigo Osorio Director General at the Energy Agency of Puebla

Genesal’s New Rental Line Backs up Power Generation Lago Crespo CEO of Genesal Energy Mexico

Iberdrola, Ideal Ally for Mexico’s Automotive Sector Vicente Aparicio Commercial Director Mexico at Iberdrola

Smart Electricity Pricing Models Help Overcome Challenges Ramón Basanta CEO of ATCO Energía

Solar The International Energy Agency reported in 2020 that solar energy is considered the cheapest form of energy in history, especially for new world power plants. Considering Mexico’s solar irradiance potential, the levelized cost of energy associated with solar technologies continues to decrease. Since solar energy has provided energy at low costs on the utility-scale, it is no surprise that smaller projects and solar distributed generation continue to showcase solar’s credentials. Now that the viability of battery storage continues to grow, along with other beneficial technology such as inverters, behind-the-meter and smaller capacity solar solutions will see an increasing interest from commercial and industrial clientele as well. For companies feeling the slowdown in utility-scale development, these new developments offer interesting new avenues. The following chapter addresses the challenges Mexico’s solar sector is facing and also highlights some of the key recent developments in the area. Crucial frontrunners in Mexico’s solar industry share their opinions and insights.

Solar

Analysis Opportunity Despite Challenges

View From the Top Jaime Pérez de Laborda | President of ASOLMEX

View From the Top Vicente Aparicio | Commercial Director Mexico of Iberdrola

View From the Top Fernando Salinas | Managing Director Mexico and Central America at FRV

View From the Top Sean McCoy | Director of Energy Services Mexico at Edison Energy

View From the Top Diego Blumenkron | Director of Sales at Northland Power Energía

Analysis New Tech Boosts Solar-Based Distributed Generation

Conference Highlights

View From the Top Álvaro García-Maltrás | President of Latin America and the Caribbean of Trina Solar

View From the Top Iván Reyes | Latam Utility Director of LONGi Green Energy Technology

Roundtable What Inverter innovations are coming?

View From the Top Pablo Rivero | Country Manager of ForeFront Power

Spotlight Solar Panel Solution Meets C&I Demand | LONGi Solar

Content Links

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Opportunity Despite Challenges If Mexico’s potential for solar energy was not clear already, PRODESEN 2020 – 2034 emphasized that the country has a potential of 5-5KWh/m2. But solar, focused on photovoltaic technologies, still only plays a relatively small role in Mexico’s energy mix, making up 5.72 percent of installed capacity by the end of 2020. From 2020 to 2024, 29.73 percent of new installed capacity is expected to be solar energy. Only combined cycle technology would narrowly beat photovoltaic solar but that does not take into account distributed generation (DG) using solar technology, which would add another 7.9 percent to solar’s growth. From 2025 to 2034, PRODESEN expects new photovoltaic solar installed capacity to grow by 30.65 percent, and DG solar by 21.94 percent. Furthermore, Mexico’s first-ever renewable initial public offering for a solar company on the stock exchange was a success, proving that investors have faith in the technology. The future looks bright indeed. Although the solar sector is being affected by the same uncertainty that can be found in the rest of Mexico’s energy sector, the International Energy Agency (IEA) confirmed solar to be the “cheapest electricity in history.” Even though some examples of record-setting prices achieved in Abu Dhabi and Dubai are a bit misleading due to their access to free land and grid interconnections, the general trend looks promising, especially in Mexico with its excellent radiation. The fourth long-term electricity auction was canceled in February 2019, but the renewable energy projects from the previous three auctions went ahead. Despite the impact COVID-19 had on project development and CENACE’s temporary suspension of pre-operational testing, many of these projects came online in 2020 and 2021. The circumstances under which these projects were constructed are less than ideal, due to the measures introduced by the federal government, notes Fernando Salinas, Managing Director Mexico and Central America of Fotowatio Renewable Ventures (FRV) in an MBN interview. “Overall, the government poses several challenges, such as restrictions to interconnection. Finding bankable off-takers to sign PPAs is another challenge. Apart from CFE, there are not many possibilities in the market,” he said. Despite the challenges, Salinas believes that dialogue and collaboration are key to the realization of Mexico’s renewable potential. Distributed Generation is the area that is much more safe guarded against regulatory changes. Installations below 0.5MW do not require permitting from CRE or interconnection tests from CENACE, for instance. With falling prices, the segment’s success in the Mexican market comes as no surprise, even as the desired cap increase to 1MW remains unrealized. “Today, there are more than 129,000 solar roofs in operation, spread across homes, businesses and industries, with an installed capacity of 965MW, involving more than US$2.1 Read the complete article More about this topic

billion in direct investment and generating more than 10,000 jobs across the country,” said Hector Olea, former president of ASOLMEX.

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Q: As the new president of ASOLMEX, what is your assessment of Mexico’s solar sector? A: The past 12 months have been challenging for all markets. The renewables sector in particular has continued its development thanks to the constant effort and commitment from all of us who are part of it. In Mexico, we are experiencing a high level of uncertainty derived from the regulatory changes that have been implemented in recent months. This has limited the growth capacity of private renewable energy projects. Despite this situation, solar energy continued to consolidate its potential, reaching a total installed photovoltaic capacity of 6,574MW at the end of 2020. This represents an increase of 31 percent compared to 2019. Currently, there are 72 large-scale solar plants in operation across 17 states in Mexico, which is nine more than at the end of 2019. Among these is the largest power plant in Latin America, located in Viesca, Coahuila. The state of Puebla also now has a solar power plant in full operation called Cuyoaco, which has 200MW of capacity. The development of clean energy and the solar sector in Mexico has created more than 70,000 jobs throughout the entire value chain, with more than US$9.1 billion in investments. Q: How is Mexico’s solar sector reorienting itself to make better use of the opportunities in DG?

Jaime Pérez de Laborda

A: All 32 states in the country have DSG facilities, with more than 165,000 contracts nationwide and an installed capacity of 1,197MW. This highlights the multiple advantages GSD offers

President of ASOLMEX

users by converting them into “prosumers,” allowing them to produce and consume energy through relatively simple facilities that have minimal operating costs and equipment that has an increasingly longer useful life.

Solar Consolidates Potential Despite Challenging Year

ASOLMEX has been actively involved in nationwide efforts that encourage the use of renewable energy across Mexico. An example of these efforts is the association’s constant dialog with members of the Chambers of Deputies and Senators in 2020 to promote initiatives that allow the generation capacity exempted for DSG contracts to be increased from 0.5 to 1.0MW. Q: What are the main challenges solar players need to overcome to attract the investment needed to complete their projects? A: According to the Coalition for Action of the International Renewable Energy Agency (IRENA), Mexico has one of the world’s most important development potentials in the sector. This positioned the country among the main players in the energy transition efforts in the last decade. To continue this positive trend, and allow more players in the sector to contribute to the development of the renewable segment in the near future, actions must focus on prioritizing the competitiveness of the energy system and promote certainty and long-term stability in sector-related policies, as well as promote a market that supports the integration of renewables in the energy sector. It

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is also a priority to resume investments in Mexico’s transmission and distribution systems.

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ASOLMEX’s goal is to contribute to a promising vision of the future, where technology continues its rapid evolution.

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Q: What is Iberdrola’s history in Mexico and how has the company worked to help the country’s industry meet its clean energy needs? A: Iberdrola focuses on the energy sector. The company was founded 140 years ago in Spain. We have been in Mexico for the past 20 years and have a strong presence in numerous countries, including the UK, the US and Brazil. The company bases its strategy on power production, transmission and commercialization of energy. In the case of Mexico, our presence is mainly focused on power production and commercialization because transmission and distribution are exclusively tied to the state. The commercialization of Iberdrola’s energy is aimed at the industrial sector, since CFE holds a monopoly in the domestic segment as well. Q: What aggregate value does Iberdrola offer to the energy-intensive manufacturing industry? A: Due to Iberdrola’s size and scope, we can offer solutions tailored to every client’s unique needs. Many energy users in Mexico are tied to the usual tariff structure. Iberdrola breaks with this paradigm and works to come up with a measured solution. This also depends on the type of energy our clients require, such as 100 percent renewable energy. We also offer schemes that take the client’s risk factors into account. By eliminating these

Vicente Aparicio

risks, we greatly boost their competitiveness. Q: How can companies benefit from the Smart Solar solution?

Commercial Director Mexico of Iberdrola

A: The idea is to have a solar system installed at the client’s operation. This could be mounted on a rooftop or on the ground. We assess the feasibility of the project and then take on the costs of installing the system ourselves. This means that the client does not need to invest at all on this front. We then sign a

Iberdrola, Ideal Ally for Mexico’s Automotive Sector

long-term power purchasing agreement (PPA), during which the client benefits from 100 percent renewable energy. If a company were to turn to other forms of energy, they could become a victim of volatile energy prices. Through Smart Solar, the client is assured that they will benefit from consistently cheap prices. The solution, therefore, meets the automotive industry’s two major energy concerns: renewable energy and a fixed, low price. This allows clients to focus on their core business. A recent example is a major logistics company, for which we are working to implementing this solution at its facility in the State of Mexico. Q: What goals is Iberdrola working toward in the short term? A: Iberdrola has 24 power plants in operation in the country: 16 combined-cycle and cogeneration plants, six wind farms and two solar parks. For the short-term, we are working to construct several power plants in various stages of development. One wind farm, located in Guanajuato, will start operations in October. Another 200MW solar plant is under construction in Puebla and tied to two other power plants we have in operation there. There is also a combined-cycle power plant being constructed in San Luis Potosi, which we hope to bring online in 2022.

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Iberdrola is a Spanish public multinational electricity utility based in Bilbao. It is present in dozens of countries on four continents serving around 100 million customers. In Mexico, it has 24 power plants in operation.

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Q: How is FRV involved in the Mexican market? A: We see Mexico as an attractive long-term market, despite the problems we faced last year. FRV has around 642MW dc of operational solar projects divided in two farms. One is a 342MW dc project called Potosi Solar and the second project is a 296MW dc project, called Potrero Solar. Potosi has a long term PPA with CFE that was awarded under the second tender launched with CENACE, Potrero was on a full merchant basis, meaning that we did not have an off-taker to finance it and did so outside of the auctions. We have finished all construction work and both plants are operational. Potrero is already selling its electricity on the spot market. The project is based on a mixed strategy, where we are looking to hedge some part of the project’s energy generation. Another part will be operational for the spot market. We could refinance Potrero Solar after we have signed a PPA. Q: What are the main differences between Potosi and Potrero Solar? A: At Potosi, we used central inverters. At Potrero, we are using technology from Huawei, made up of many small inverters that you can plug in and out, making it easier to manage. At Potrero, we also use bifacial panels. These panels were not as big when we started working on Potosi, where we used dual-glass solar

Fernando Salinas

panels, which were considered high-end technology back then. One year later, we financed Potrero to use bifacial panels and we expect to yield a higher gain and performance.

Managing Director Mexico and Central America at FRV

Q: How has the company adapted its strategy recently? A: We have seen all the changes that have come about. Our strategy is to persevere and protect our investments. Although the overall situation is far from ideal, we believe in Mexico in the

The Making of Potrero Solar’s Success

long term given its fundamentals. We need to build bridges and try to understand what the government really plans to do. If it wants to talk about the future, the sector, and FRV in particular, is open to discussions because it helps with outlining regulation. FRV has invested a great deal of money in Mexico. We need to make sure that the rules under which this investment was made are respected, so that we can obtain the profitability that we planned for with our projects. We are also open to talk about the future so that we can help Mexico comply with its renewable energy target. We need to convince the government of the target’s importance so that it can create policies that will enable new investments. Q: How does FRV design its social approach? A: We have gone beyond the requirements of our social impact studies that were approved by SENER. In the communities where we are present, we have had a real impact. When we started the Potrero Solar construction a year and a half ago, we opened a modest facility to attend the medical needs of the people. We also purchased all the necessary medicine and had a doctor on site. In the Potosi community, we have a different program because we adapt our approach and budget to local

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needs. In this case, the people wanted a baseball field and we decided to build them one. We also established programs to teach local women about doing business. Having diverse social programs is important for any business investing in Mexico, which is why we take it so seriously.

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Q: What attracted you to the Mexican market? A: Due to the multiple regulatory changes taking place, clients are looking to safeguard their energy supply, knowing that at some point CFE will increase its rates. They are also looking for alternatives in terms of what they can install onsite to generate their own isolated supply. These are all areas where we can provide them with valuable assistance. At some point, companies will be affected by the government’s inability to further subsidize low energy costs. Q: What global trends are you seeing regarding companies looking to decarbonize their activities in Mexico? A: More international companies are pursuing a reduction in carbon emissions. This includes companies that have production facilities in Mexico, consuming energy and emitting CO2. Our country is, therefore, a significant part of this trend. We are engaging multiple companies and assisting them by looking for alternatives. In Mexico, there are big challenges slowing down companies in their emission reduction plans but generally, more and more clients are approaching us to ask what they can do to reduce their carbon footprint. Many companies have decarbonization goals, either imposed by regulation or set by themselves. The current pipeline of

Sean McCoy

projects, as seen in CFE’s business plan, does not involve any concrete plans for renewable energy. This will be a concern for the competitiveness of Mexico’s industry. This plan needs to be changed as soon as possible in order to keep Mexico’s

Director of Energy Services Mexico at Edison Energy

competitiveness. Q: How could SMEs help to make Mexico’s economy more sustainable?

Carving Out a Path to Sustainability

A: These mid-tier companies, which do not have the negotiating power of a very large energy consumer, will have to get creative. They need to investigate alternatives. First, they should examine energy optimization in terms of their consumption. Second, they need to look at what they can do to further reduce their grid energy consumption. Third, they could examine how to procure energy when possible. If they cannot, they can look toward larger shared installations for onsite generation. There are several options available, but also limitations. For example, for anyone owning a large rooftop in Mexico, a solar system below 0.5MW should be a no-brainer. Nevertheless, it helps to have someone on your side who knows these rules and is aware of the potential ramifications. A: The Power Industry Act allows the gathering of loads through a specific industry sector or economic interest group, in order to be subject to the qualified supply, which is an excellent opportunity that has not been applied yet and will definitely support the Mexican economy to recover on a much faster phase. Unfortunately, the Ministry of Energy has

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not taken any action in that regard. By providing a broader interpretation as to what an economic interest group would entail, various sectors of the Mexican economy could be subject to qualified suppliers and be able to be supplied with competitive rates.

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Q: How did Northland Power come to operate as a qualified supplier in the Mexican Wholesale Electricity Market (WEM)? A: As many know, Mexican legislation does not allow power producers to directly sell energy to final users. Northland Power, whose core is to develop power generation projects, own and operate facilities for the long run, saw the need to market its products in the WEM. In order to be present along the entire energy value chain, Northland Power decided to have its own qualified supplier (QS), Northland Power Energía, which started operations in March 2020. Until August, the company was mainly working to build the right team with the right people, establishing governance, selecting the energy trading risk management (ETRM) software and preparing its teams. In September, we started marketing for the 130MW La Lucha solar farm. However, as a QS we need more products such as: power, energy and clean energy certificates. Our mandate, therefore, is to arrange this; to build a strong portfolio that has in it all the mandatory products that are competitive enough in the long run to help Northland grow in the Mexican market. Even though Northland Energía is a new company, the people who operate it are not new to the energy market. Combined, we have over 20 years of experience with the Electric Industry

Diego Blumenkron

Law (LIE) and have had the opportunity to participate in negotiations representing more than 1.6GW. Most of this comes from combined cycle technology. We also negotiated more than 1.1GW worth of supply contracts and some of us worked on

Director of Sales at Northland Power Energía

CFE’s power producing and QS arms. We have been involved in Mexico’s electricity market from the very start, which means the company has the experience to understand what is really happening in the sector.

Qualified Supply Ability Contributes to Long-term Growth

Q: What were the biggest challenges Northland Power Energía had to overcome to become operational as a QS? A: There were three main challenges. The first, as the other qualified suppliers that operate within the WEM, we are facing a lack of liquidity in the market, also that the WEM is still new and people are still learning about it. Second, the disruption to planning from COVID-19. We planned to enter into operation in May 2020, but the regulatory entities were in trouble and off schedule due to the pandemic. Third, migrating clients. This is a very difficult challenge because many of them do not comply with the grid code. This should be addressed first and sometimes this takes a lot of time and needs to be done thoroughly. Even though this is a requirement for everybody which injects or extracts energy from the national grid and that it was enacted in April 2018, we still find loads that are not yet in compliance. Nevertheless, if you want to migrate a client to the new market, it might take from eight months to a year because you need to start from scratch. Q: What characterizes the company’s strategy as a new player in Mexico’s WEM? A: We offer monthly rates that are based on individual requirements, which vary per customer due to their different

load profiles and needs. We do not have, and we don’t intend to have a shelf product. Everything we sell is tailor-made. You might think that two companies that belong to the same industry would have similar requirements, but their needs change based on behavior, location, market context and appetite for risk, among other factors. For example: right now, we are seeing low local marginal pricing (LMP) take effect. Furthermore, we are expecting a rather low power market clearance because there is a great deal of idle capacity that is not being used, the national interconnected system is around 20GW long. This allows for the best prices from the customer’s perspective. You can hardly claim there is something out there that could produce energy, power and CELs at around US $30MW/h which is the expected bundled price for 2020 and recover the internal rate of return at the same time. The levelized cost of energy (LCOE) of the different actual generation technologies is simply not there at the moment for that to happen, so taking advantage of these market prices becomes very attractive for building competitive-low-risk-tariffs. The market is telling us it does not need more capacity additions right now, which is among the reasons we have low prices today. We will see this situation prevail for at least the next three years. Demand is not growing that fast, after all. So, Northland Power Energía has decided to use this, at least some percentage of the market, knowing that we will not regret to make this recommendation to our clients later. Currently, volatility is super low. Prices are depressed and you can take advantage of that. This is one of the advantages of our company: we create supply strategies and want our customers to actually benefit from our knowledge while solving their particular problems. Q: How is the company working to support electricity end-users? A: Even though we have substantial energy generation capacity, transmission has stayed almost the same. We are also seeing transmission problems among the end users we work with. In some areas of the country, CFE is no longer able to offer connection capacity to the loads. We are working hard with Northland’s development arm to offer solutions to end users to address this lack of connection capacity. We are working on products to help them overcome these burdens. We are not an average QS. We deliver supply solutions through the development of strategies, while providing turnkey projects so that companies can continue their work.

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Solar | 52

New Tech Boosts Solar-Based Distributed Generation Mexico’s existing solar resource is enviable, with the county boasting one of the world’s leading irradiation profiles. The question is how to take advantage to address its energy needs. One way is through distributed generation (DG). The threshold for interconnection and all the permitting involved implies a set capacity above 0.5MW. This means that any installation below this figure, such as solar panels on a rooftop, can safely remain “behind the meter.” The definition of DG, often tied to the 0.5MW threshold in Mexico, is therefore unique to the country. Utility-scale projects are slowing down and this could indirectly push more consumers in the commercial and industrial (C&I) sphere to DG, said Pablo Rivero, Country Manager of ForeFront Power, in an MBN interview: “While it may not have increased demand per se, these factors impacted the flow of money that companies were contemplating to invest in renewable projects or other external updates to improve their company’s efficiency and reliability. Instead, companies are now realigning these budgets toward their own energy production, which has opened up the opportunity for external investors to provide the entire solution, including investment, construction and O&M over the long term.” The economics of solar DG make the option an almost obvious one for those able to invest in it. “For anyone owning a large rooftop in Mexico, a solar system below 0.5MW should be a no-brainer,” said Gilberto García-Ruiz, Business Development Director of Edison Energy to MBN. PRODESEN highlights that in 2019, Mexico reported 1,023MW of solar DG capacity installed. CRE reports this capacity increased over 40 percent during that year. Thirty-one percent of this capacity can be found in the country’s western region. Lower percentages are encountered in Baja California and Baja California Sur, with 3.6 and 1.8 percent respectively. It is precisely in these areas where industry experts stress the possibility for growth. Advancements in DG technology research and development are boosting this trend further. These innovations help to make solar more technically viable for companies, and decrease costs as well. One issue that might keep companies from installing DG is their lack of knowledge regarding the technology and benefits it provides. “As energy associations, we have not supported companies that promote these modern technologies and we have not ‘educated’ business chambers in leveraging them. I daresay that 90 percent of users do not know that, with the installation of a very simple and economical battery, their panels would continue to operate in case of increasingly Read the complete article More about this topic

common blackouts and help replace voltage stabilizers, regulators and UPSs,” said Hans Kohlsdorf, Managing Partner of Energy to Market.

Conference

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Highlights

Lowering LCOE: Ultimate Goal for Solar Technology Carla Ortiz County Manager Mexico at RER Energy Group

Alejo López Vice President Latin America at Nextracker

Alberto Cuter General Manager LATAM & Italy at Jinko Solar

Kevin Gutiérrez Sales VP of Inverter Business at Huawei Mexico

here are few industries where technology is growing as steadily as in solar energy. The panel, “Innovation is Key: Progress and Opportunity in Solar Technology,” featured key leaders from some of the sector’s most important companies. Moderated by

RER Energy’s Country Manager Carla Ortiz, the panelists agreed that bringing down costs for operations remains the most important aspect for the industry. In Mexico, the solar sector is undergoing significant changes. With governmental policy changes dominating the environment, the trend of developing large utility-scale projects is fading away. Nevertheless, distributed generation (DG) does not suffer as much from regulatory changes because below the 0.5MW threshold, no permits are needed. Taking into account this developing trend, Ortiz asked panelists what this shift toward DG meant for solar technology in the country. Alberto Cuter, General Manager Latam and Italy of Jinko Solar, explained that photovoltaic technology trends have already changed. Now, bifacial panels dominate the utility-scale environment but they are unlikely to be applied in C&I-focused DG projects. “Because of spatial limitations, optimizing panels on a slightly smaller scale makes more sense in this area.” Cuter said that mono perc panels with P-type or N-type cells would likely become the most popular. Inverters are the core business of Huawei, said Kevin Gutiérrez, Sales Vice President of the company’s Inverter Business. One of the main developments the Chinese technology giant has been focusing on for the past few years is AI. “We have implemented AI in all our products for a few years now,” Gutiérrez explained. Through AI, operations and maintenance (O&M) become much easier and safer to boot. Especially in smaller, scattered C&I installations, this provides advantages. “Here, we often see many small installations. Therefore, monitoring becomes crucial for efficient operations,” he said, highlighting that AI can detect faults, which in turn reduces costs and improves overall efficiency. Alejo López, Vice President Latin America of NEXTracker, said the trend to move away from the utility scale poses a challenge for the company’s solar trackers. “Our product is designed for larger scale projects,” he acknowledged, “although smaller projects have also found its characteristics attractive and beneficial.” Vertical panels are also quickly gaining ground in

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the market. Nevertheless, López points out, with the current situation this is not developing as fast in Mexico.

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from the

Q: How has Trina Solar experienced business lately? A: The company recently listed on the Chinese stock exchange, facilitating access to new financing toward ambitious future plans. Since Trina’s listing, the company has reinforced its intention to return as the global leader in photovoltaic panels. Shipments of modules in 2020 exceeded 15 GW. We are expecting to see a further rise in 2021. Furthermore, decided it will focus its new manufacturing investment on the newest and latest 210mm cell size that the market is deploying in solar modules, which is featured in our Vertex platform. Trina believes it is the correct size for the coming years because we can achieve higher power and efficiency at similar or cheaper costs. It is a long-term invest and Trina is the first big manufacturer to make a bet on this technology. The Vertex modules come in different sizes and power. Vertex S is specifically designed for distribution in the residential segment, with a power range of 400W. It has the right weight and size to maximize yield in the limited space available to customers in the segment. We have a product range from 500W peak up to 600W peak. In 2H21, we will manufacture and offer our new 660W Vertex modules. Trina Solar also completed the acquisition of a European tracker manufacturer in 2020. The company now offers its own tracker, designed to be compatible with our modules. Q: How should Mexico could make the best use of

Álvaro García-Maltrás

its distributed generation (DG) resources? A: We think that there has been a great deal of growth as well as opportunities for development in DG. Smart technologies

President of Latin America and the Caribbean of Trina Solar

and storage will become a part of it. It is a matter of bringing costs down, especially when Mexican consumers have to pay higher electricity prices. This makes sense, especially in areas like Baja California. Because this area is not connected to the main grid, battery storage is already viable. However, there are

Prospects Move to Distributed Generation

other efforts that can be taken to promote this segment, such as raising the cap for extensive permitting requirements. There is no real justification to set it at 0.5MW and there are already talks about increasing it to 1MW. If this can be achieved, it would open up many opportunities for the C&I segment. Another issue would be to get rid of the importation duties for solar modules, which are still the costliest part of a solar installation. The tax is aimed at protecting the local industry but it cannot sufficiently supply the local market. Our goal is to prioritize the security and quality of our products by bringing costs down and increasing project viability, as well as increasing the possibility to spend on storage. Q: How is the company’s utility-scale project progressing? A: The project, located in Zacatecas, has been developing and is nearly finished. We are also working on other projects of varying sizes. There are not many recent projects available and considering that 2020 was not a good year for utility-scale projects in Mexico, we were fortunate to supply our modules to three big Mexican projects in 2020: Calera Solar, together with Mitsui; Cañada Honda, together with Next Energy: and La Lucha (located in Torreon, Coahuila), owned by Northland Power. We

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consider that the number of projects in 2021 will be even lower. We are aiming to participate in one of the few that could be built this year. For this reason, we are increasing our efforts in the DG segment. It is the best use of our technology and is certainly a worthy cause.

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from the

Q: What was LONGi’s experience in 2020 in terms of demand and what specific goals has it set for 2021? A: We have had a great deal of demand, especially in Latin America. The impact of COVID-19 was, therefore, not that profound. Of course, some projects were pushed out to 2021 but, overall, 2020 was a good year for us. For instance, we provided modules for the Pachamama solar project in Aguascalientes, which has been a success so far. We already had some contracts negotiated in 2019 as well, which helped fill in the gaps. For 2021, we had to make some adjustments in our projections, considering the situation for utility scale projects. However, we see a big opportunity to increase our market share in the C&I segment. Our target for this year is to have at least a 25 percent market share in the distributed generation (DG) environment. We are negotiating with key distributors and already have a good-looking pipeline with C&I developers. Q: What advantages does the HI-MO4 module bring in the area of DG for the C&I segment? A: For utility scale projects, we see a different size of module being applied, from 500W up to 700W. The main problem is that these modules increase in size and weight but not necessarily in efficiency. This is not a problem for utility scale but the DG

Iván Reyes

market often uses rooftops, such as at industrial parks. Such a hefty module might not be suitable for a rooftop installation. Our HI-MO4 module is smaller in size and lighter, making it more suitable in this regard. This is why we believe that the technical

LATAM Utility Director of LONGi Green Energy Technology

characteristics of this module fit the C&I segment perfectly. Furthermore, the biggest size provides a high amount of current. Inverters designed for DG projects are sometimes not suited for this. Efficient, smaller modules that comply with all the technical market conditions are much easier to work with.

HI-MO4 Module Ideally Positioned for C&I

Q: How is LONGi planning to increase its manufacturing capabilities to meet such demand? A: We have a rather aggressive expansion plan for the next couple of years. Global demand is very high. We have noted reports stating it is over 130GW. By the end of this year, our goal is to surpass 50GW manufacturing capacity for our modules. For wafers, we want to increase this to over 80GW. We truly believe that demand for solar will continue to rise, so we want to be prepared. Q: How is the company adapting its strategy in regard to utility scale projects? A: We understand the challenges that the sector faces in Mexico under the government. However, there are still some ready-tobuild projects that comply with its regulations where we could supply the modules.We are also promoting our HI-MO4 modules aimed at distributed generation (DG) in Mexico for the C&I segment. This is a market where we see a great deal of demand, so we have adapted our strategy to these market conditions.

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In this case, we developed a proper module to provide to this market. We would love to deploy our cutting-edge utility-oriented module, the HI-MO5, in Mexico but looking for new projects might be a challenge under the government’s policy direction. In Mexico, it seems like we will have to focus more on the C&I market.

Solar inverters are crucial for every solar application, from

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What Inverter innovations are coming?

rooftops to utility scale. They are important because they turn DC power coming from PV panels into AC power, able to be distributed in the grid or go directly to homes and businesses. To get the best out of solar energy and mitigate any potential issues with intermittency, companies providing solar inverters are rapidly innovating and advancing their technological solutions. Mexico Energy Review asked key players about their most relevant innovations and technologies.

Our product lines for the residential segment range from 1.2KW to 6KW. In the Mexican market, we comply with UL certification. It is concerning to see other companies coming to Mexico without complying with official standards. The government should enforce these standards to ensure that only professional installers and equipment can operate in the country. In the C&I segment, our inverters range from 20KW up to 60KW for rooftop installations. We also have a 120KW product, which can be used in ground-mounted installations. For larger scale projects, we were recognized for “Most Innovative Product” at 2018’s Intersolar event in Munich for our PVS-175. This is a

César Alor

powerful string inverter that we used in several PV plants across the world, including Mexico.

Country Manager Mexico of FIMER

We have been increasing our portfolio for this market. Originally, we only had 480v AC solutions for utility-scale projects but we are expanding with new products, such as residential inverters, which we started delivering in 4Q20. We will also introduce a 220v inverter for small, commercial installations in 1Q21. Huawei has followed the same strategy almost from the very beginning, focusing on string inverter technology. This has allowed us to position ourselves well within this technological framework. Over time, our strategy has proven to be the right one: string inverters have demonstrated to have more advantages than

Kevin Gutiérrez

central inverters for large projects.

Vice-President of Sales for Inverter Business at Huawei

We are the largest 3-phase string inverter supplier in the North American market, and No. 1 in the US with 800MW shipped last year. Even during the pandemic, we experienced significant growth in this market. Our smart inverters support the grid. These are supported by the US UL 1741 SA. These inverters still inject energy into the grid, even if there are unexpected variances in the energy supply. New policies and requirements demand that inverters be smart enough to handle such issues. Chint Power Systems has this capacity available for commercial and industrial applications.

James Qiao General Manager of Chint Mexico

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from the

Q: How did the company adapt its operations in the last year? A: Last year was indeed tumultuous, despite our ability to adapt to different circumstances. 2020 was a year of many changes but it also brought new opportunities. We were able to apply a variety of strategies during the pandemic that benefited us. An example is our focus on investment into projects that use to be turnkey oriented. This has become a main business line for ForeFront in Mexico. Distributed generation in general has become a much wider market for the company here. Q: How have the pandemic and regulatory uncertainty accelerated the sector’s move toward distributed generation? A: While it may not have increased demand per se, these factors impacted the flow of money that companies were contemplating to invest in renewable projects or other external updates to improve their efficiency and reliability. Instead, companies are now realigning these budgets towards their own energy production, which has opened up the opportunity for external investors to provide the entire solution, including investment, construction, and O&M over the long term. Q: How does the company approach these projects? A: In general, our business has two types of projects: on-site and

Pablo Rivero

off-site. We develop both types from the greenfield stage until they are operational. As a third party, we operate and maintain the projects.

Country Manager of ForeFront Power

One important benefit is that our clients do not have to invest in the solution themselves; instead, they just sign a power purchasing agreement (PPA) with ForeFront. Second, the regulated energy prices available to users are very high, and will remain that way for some time. We know that energy generation

Ability to Persist Through Crisis Gives Strength to Bounce Back

in Mexico is more focused on sources such as fuel oil and other fossil fuels. This does not allow reduction in energy prices so customers could find more competitive opportunities with our solar solutions. Since adaptability is a strength of ForeFront, we can offer tailored solutions, addressing our clients’ needs and finding a solution that works best for both parties. Q: Are local energy users shifting toward sustainability? A: In all honesty, we have noticed that Mexican companies are more interested in energy savings, which is normal for a developing economy. I do see that international companies, especially large corporations, have a higher interest in environmentally friendly solutions, even though they are also looking to save costs rather than just cut down on emissions. Whether this trend affects Mexican companies more deeply will depend on changes in regulation. If there is not a clear regulation that demands companies to decrease CO2 emissions and become greener or that provides incentives for these actions, I do not think it will be a priority for companies, especially right now, in an economy hit by the pandemic and marked by lower sales. Companies will prefer to decrease costs and focus on their own economics rather than the environment. Hopefully, there will be room for both. Q: How do you assess a project’s potential below the utility-scale threshold but bigger than DG?

A: Such projects can be of value because they are not big enough to cause problems for the grid and can be better positioned in specific areas. Smaller and on-site projects are the future of renewable energy. Unfortunately, updating and improving electrical infrastructure is not a priority in many countries, including Mexico. Smaller projects that are closer to customers and boosted by storage is the future for power generation. Q: How do you assess the viability of adding battery storage in Mexico’s energy sector? A: While there are few situations in which you could add storage to a project, there are still opportunities, in my view. There is no additional support for companies to motivate them to add storage into the mix. However, I think that storage can no longer be ignored by the market. Many companies operating outside of the grid are supported by diesel generators, which is too expensive and could be replaced by batteries. In some areas of the country that are outside the reach of the national grid, it is already a possibility. Q: What are the main challenges the company faces? A: Everyone is facing similar challenges. Mexico is dealing with an economic situation that has never been seen before. The country will need to experience greater economic stability before companies feel confident to move ahead with projects regarding their energy use and supply. At the moment, companies are looking to reduce costs and switching their energy supply might not be on the top of their list. In addition, market uncertainty is an issue in the energy sector. Since we do not know what will happen next, any reported rumor causes a great deal of turbulence and uncertainty. This incites potential clients to hold off any business decisions they might have wanted to take. Q: What are ForeFront’s objectives for the year? A: Any crisis also opens up opportunities. If you are able to persist during the crisis, you can come back and rise again because your company will be at the forefront of a new opportunity. In my opinion, players that stay in the market until this crisis is over will be better positioned. We simply have to move past these challenges, there is no other way around it. Despite potential obstacles, renewables are the future. We will keep fighting for this and look for opportunities wherever they may be. Eventually, the market will stabilize and open up. We should all believe in its potential.

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SPOTLIGHT

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Solar Panel Solution Meets C&I Demand Even though module sizes for utility-scale projects continue to expand, ranging from 500W up to a whopping 700W, this also means size and weight increase as well. This is no issue for giant solar parks but Mexico’s fast-developing distributed generation (DG) market often relies on rooftops and other limited spaces. LONGi Solar’s Hi-MO 4m modules are smaller, lighter and comply with all the technical market conditions as well, making them ideally suitable for environments found in the C&I environment. The Hi-MO 4m series offers three different module types: 60C, 66C and 72C, covering power ranges of 370-385W, 410-420W and 450-460W, with maximum efficiency of up to 21 percent. At maximum power, the current of the Hi-MO4m module remains below 11A, perfectly matching string inverters, power optimizers and micro inverters of any brand. LONGi’s modules are renowned for their performance, yield and sustainability. In addition, PV Magazine tests have shown that their outdoor energy yield significantly outperformed similar products. LONGi has also won awards in tests done by TÜV Rheinland’s “All Quality Matters” and the Renewable Energy Test Center (RETC) PV Module Index report. LONGi has also introduced gallium-doping on its wafers, which decreases first-year degradation of the module and increases its useful life. To serve its global customers more efficiently, LONGi is expanding the capacity of its dedicated DG production line to 10GW in 2021.

Renewables Developer Brings Diversity, Inclusion to Solar Camilo Serrano General Manager Mexico Atlas Renewable Energy

Pause in Development Following Versalles and TAI Solar Farms Oscar Bernal Director General of Eosol Energy Mexico

Increase Portfolio, Growth in Distributed Generation Kevin Gutiérrez Vice-President of Sales for Inverter Business at Huawei

Acquisition of ABB Division Boosts Global Inverter Player César Alor Country Manager Mexico of FIMER

A More Holistic Approach for C&I Solar Carla Ortiz Development Director Mexico of RER Energy

Opportunities Abound for Solar Panel Producer Simon Zhao President of Solarever

Breaking Ground on the 130MW La Lucha Solar Farm Carlos Egido Country Manager of Northland Power

A Focus on Solar Development to Help Prevent Climate Chaos Mauricio Rincón Country Manager of Solarcentury

Unique Value Proposition for 269MW Solar Project Mario Pani Regional Manager Latin America at BayWa r.e.

R&D, Varied Portfolio Make Solar Inverters a Success Jorge Visoso Marketing Manager for Americas and MENA Region of GoodWe

The Clear Advantages of Mexican Solar Panels Javier Romero Executive Director of AMFEF

Wind Of all renewable energies in Mexico’s energy mix, wind has one of the longest and most reliable track records. After hydroelectricity, wind energy represents the second-largest renewable capacity, according to PRODESEN. With exceptionally strong potential found in the Isthmus of Tehuantepec, Oaxaca, many states continue to reap the benefits of strong wind resources. Other energies, such as solar, are rapidly increasing capacity development. Uncertainty, which is stalling new project development, presents a further hurdle. Nevertheless, wind will remain a staple of Mexico’s power production, and new technologies are helping to further boost its advantages. The development of wind projects, the turbine technology behind them, social initiatives to enhance community engagement and future technological opportunities in the areas of O&M and battery storage, are all part of the discussion in this chapter. Experts in Mexico’s wind industry outline their vision, expectations and areas of focus.

Wind

Analysis Stability Can Help Neutralize Headwinds

View From the Top Julio Valle | Deputy Director at AMDEE

Conference Highlights

View From the Top Ralph Wegner | Founder and President of the Board of Mexion Corporation

View From the Top Albert Sunyer | Country Manager Mexico of The Nordex Group

View From the Top Rafael Valdez | Managing Director Latin America and the Caribbean at Envision Energy

View From the Top Jack Weisz | Commercial Director Latin America of Onshore Wind at GE Renewable Energy

Analysis New Developments Ease Operations, Maintenance

View From the Top Jorge Mediavilla | Director General Mexico of Ingeteam

View From the Top Alejandra Domínguez | Managing Director of SOWITEC

Roundtable What Distinguishes One Social Approach from Another?

View From the Top Gustavo Ortega | Director General of Grupo México Energía

Spotlight Benefits of Photogrammetric Aerial Surveys in Renewable Projects | SOWITEC

Content Links

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Stability Can Help Neutralize Headwinds PRODESEN 2020-2034 shows that Mexico’s installed wind capacity made up 5.88 percent of the total capacity in 2020. As several wind farms have become operational, the figures provided by PRODESEN are slightly outdated: Zumma Energy Consulting highlighted this number at 6.69 percent in October of 2020. Even though wind energy did not grow as much as solar energy between 2018-2020, wind energy will remain a staple of Mexico’s energy mix. For the 2020-2024 time period, of the total renewables capacity, wind represented 28.4 percent. PRODESEN predicts wind energy to grow by 14.81 percent. It is expected to increase to 16.46 percent between 2024 and 2035. Development of wind energy had been highly driven by Mexico’s energy auctions, which have been put on hold indefinitely. PPAs remain an option, although experts highlight that the uncertainty in the private energy sector caused by the López Obrador administration’s state-centric measures in the sector are scaring off companies that might be interested in these long-term commitments. Mexico’s excellent fundamentals, however, offer many benefits for the country’s companies in the future, believes Jack Weisz, Commercial Director Latin America of Onshore Wind of GE Renewable Energy. “We truly believe in the country’s potential because of the superb natural resources,” he said. “Even if this transition does not accelerate in the short term, we believe it will happen in the medium term.” Weisz stresses that there are many other reasons to stay in the market. “We are seeing cases around the world where renewable energy can offer the most cost-effective solutions for a clean energy transition, plus the incredibly positive impact it has on the environment and sustainability in general.” Renewable technologies are still far from reaching their peak in terms of efficiency and levelized cost of energy (LCOE). Wind energy is no different, and various developments are pushing the sector forward. Yet, some components remain mostly the same, such as wind turbines. Why fix something that is not broken, companies rightfully argue. Therefore, innovations in the latest turbines are built upon existing platforms, expanding the capacity and increasing the size of rotor turbines. Not everything in the wind sector builds on old but reliable recipes, however. This is the case with battery storage, which was incorporated into a wind project for the first time in Mexico’s history at the Eolica Coromuel project. Experts argue they prefer to wait until there is a more robust regulatory framework to back up their solution, as well as a fair recognition of added storage capacity. But the potential of storage may be starting to outweigh such concerns, especially in the isolated grid of Baja California Sur, where developments Read the complete article More about this topic

such as Eolica Coromuel will likely open the door toward more storage in the renewable energy sector.

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from the

Q: You have already stated that the latest energy legislation is “destructive.” How is AMDEE responding? A: As we have already announced, AMDEE will use the legal mechanisms available to safeguard our rights as investors. We are bound by our fiduciary responsibility. The legislative changes violate fundamental rights established at the constitutional level, in addition to violating a series of obligations that Mexico assumed at the international level, provided for in investment protection agreements and international treaties. We are in constant communication with all our associates and, at the same time, they are communicating with their clients to maintain a clear flow of information and prepare the next steps. Q: How will the need of companies to source clean energy translate to opportunities for wind companies in Mexico? A: In Mexico and around the world, the need to move toward generating energy through renewable sources is a reality. More and more countries have promoted this transition for the benefit of the environment, the economy and a better future for the next generations. Mexico has great potential for this transition, it has all the natural elements and the willingness of many organizations to join this change. Wind energy companies have helped steer the country toward sustainability.

Julio Valle

Q: How can new technologies such as energy storage benefit wind companies and their projects?

Deputy Director at AMDEE

A: As markets and technologies evolve, new solutions are presented to overcome grid challenges and better support the system’s operation. Even though there is no storage policy or regulation in Mexico, we know that this technology presents solutions to multiple challenges that a grid may face. We have

Safeguarding Investor Rights

actively participated in the dialogue to set the policies and framework for different solutions and we will gladly continue to do so when the authorities are ready. Q: How have wind companies adapted their social approach during the pandemic? A: During this pandemic, wind energy companies have continued to work with the best practices and with respect and attention to the communities where wind farms are installed. Likewise, each of the companies has done their part and has contributed to the well-being of the communities through different initiatives; from the delivery of medical equipment and food pantries, to the reinforcement of sanitary measures and support for local hospitals. Q: What Will AMDEE’s main focus be for this year? A: At AMDEE, we will always be committed to promoting an industry that benefits our environment and millions of Mexican families. This year, we hope to continue with this purpose, completing the projects under construction and keeping the

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rest in operation. Given the political panorama, we trust that an energy transition toward clean energies will continue to be prioritized and that decision-makers in the government will reconsider the need for Mexico to ensure a better future for the next generations.

Conference

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Highlights

Wind Energy Now Reaching Full Growth Veronica Zapata

ind energy is beginning to adopt the characteristics of a resilient and wellestablished industry at a global scale. This notion was the recurring theme during the panel titled, “Opportunities Across the Wind

Industry Project Lifecycle.” The panel was moderated by Veronica

Kino Asset Manager at Enel Green Power

Zapata Oviedo, Kino Asset Manager at Enel Green Power. Zapata

Enric Català

process of maturation. “Technology has allowed us to constantly

Senior Sales Director of LATAM at Vestas

Albert Sunyer Country Manager Mexico of The Nordex Group

David Martínez Director de SPV’s Mexico at Envision Energy

Grisell García Head of Marketing at Acciona Mexico

Oviedo said wind energy technology was at the tail end of a long improve wind power. Today, we have a better acquisition portfolio and fewer interruptions in this alternative energy.” David Martínez, Director of SPV’s Mexico at Envision Energy, explained that wind energy is still very new to Mexico when compared to Europe, with the first wind turbine being installed in 1994. For Martínez, the prevailing challenges in the industry are more about technological implementation rather than culture. Martínez argued that upcoming onshore turbine projects in Mexico still need to adopt the latest characteristics in terms of size, which could reach up to 200m of rotor diameter and challenge the usual limit of 164m. Martínez believes that technology that is classified as “modern” is perhaps not innovative or disruptive enough, so more up-to-date technologies need to be implemented to embrace advantages like integrated data management and IoT systems together with storage solutions. “Storage systems are not the future but the present.” Turbine dimension was an important issue for panelist Albert Sunyer Folch, Mexico Country Manager of Nordex & Acciona Windpower, who made clear that new turbine sizes and technological capabilities had to be adopted. This included not just larger towers and rotor diameters but also hybrid turbines. He also explained that turbines needed to be designed to take advantage of a variety of wind conditions. “We have launched rotors for areas that are favorable for wind power and also for areas that are not so favorable. We have managed to optimize resources despite their limitations.” Industry best practices were discussed by panelist Enric Català Roig, Senior Sales Director for Latin America at Vestas, who said safety came first. Moreover, Catalá said those practices could be divided into traditional best practices and the more recently developed practices that depend entirely on technology, such as remote monitoring and asset integrity management. “We believe that in recent years, there has been an important revolution in

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the sector. With new technology, we have been able to optimize operations and maintenance of our equipment,” said Català.

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Q: What is the history of Mexion Corporation (MexCo) in the Mexican market and what issues does it generally solve for wind farms? A: MexCo has been around for the past 15 years, establishing business along the value chain of wind energy. Climatik is a well-known trademark under this umbrella. Climatik carries out measurement campaigns for the operations and maintenance (O&M) as well as for the prospection of wind and solar power plants. Our business line Mexion focuses on maintenance, repair and consulting services of wind turbine blades. Furthermore, MexCo has been successfully involved in a variety of wind farm developments. Q: How is the Mexican wind sector adapting to datadriven solutions for O&M and optimization? A: Cloud-based inspections reports as well as WTG blade datasets are becoming more of a trend worldwide but are not much demand in Mexico. Here, the sector is still fine-tuning the maintenance and not yet implementing further optimization of power generation. The market is becoming more professional every day in a steady path, but manual inspections work is preponderant. New tools for big data acquisition with artificial intelligence-based reports are already available in the market.

Ralph Wegner

When it comes to optimization, these processes can be implemented to help a wind farm achieve a 3 to 5 percent energy production surplus. It is just a matter of time: the technology is already available. The data measurement tools

Founder and President of the Board of Mexion Corporation

have very attractive paybacks. But, as the last wind power plants from the long-term energy auctions have wholesale prices around 20 USD/MWh, the O&M budget is rather focused to maintain than to optimize. In other markets like Europe or the US, the situation is different. Both energy prices and market

Adapting to the Wind Sector’s New Reality

maturity play a role on that. Q: What objectives will MexCo be working on for 2020 and 2021? A: The main objective is to adjust the company and its mindset to the new reality that we all have to face. It is not only the pandemic issue behind this but the ongoing transition of the Mexican energy sector. Some companies have left the country, others with stronger commitment to the country, like MexCo, are staying. The electricity sector’s breach between power generation and demand is growing. In my opinion, the public sector will not be able to fill this gap on its own. Therefore, sooner than some might expect, there will be an opening toward private investment and industry again regarding power generation and transmission. The production and export of renewables fuels like hydrogen and ammonia, as I mentioned before, represents a huge opportunity for the Mexican renewable energy sector, as their global demand increases significantly.

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Meanwhile, we are working to expand our operations into other Latin American countries and see if we can cushion the downsize of sales in Mexico by upselling in other markets. Many of our customers do operate outside of Mexico and we want to offer them our value propositions in this region.

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Q: How did Nordex handle 2020 in terms of demand and undertakings? A: 2020 was a very interesting year for Nordex because it was perhaps our best year so far in terms of installations in Mexico. We had four projects under construction simultaneously with an aggregate capacity of 402MW. This can perhaps be interpreted as a contradiction against what is happening in the market; nevertheless, most wind turbine manufacturers would likely say something similar. We are seeing the results of what has been done properly by our customers in the past two years. Following the policy changes the government is pursuing, it is unlikely that we will see similar results in the next two years from now. Last year, we finished the installation of the Dolores wind farm for an international utility, awarded in the third energy auction with the lowest LCOE. We also finalized Santa Cruz wind farm and started San Carlos, both with Acciona Energía. Furthermore, we are involved in a project in Central Mexico called Mesa Morenos, with a new customer for us. This project started construction last year and will be finished by mid-2021. All of the projects use the AW3000/3300 platform. However, with Nordex’s technology, we have developed the Delta4000 platform, with new products in the segment of 4 to 5.XMW.

Albert Sunyer

Since this is where the industry is headed, all new projects we are selling in Mexico from now on will use the Nordex platform. Q: What distinguishes the Nordex platform in

Country Manager Mexico of The Nordex Group

terms of design and characteristics? A: In 2017, Nordex launched its Delta4000 platform, the most powerful platform the company has pushed since its merger with Acciona Windpower in 2016. The first product in this

US Renewable Demand and O&M Expansion Grant Certainty

segment was the N149, a 4.5MW product that had great market demand. We then increased the rotors twice, with the N155 and the N163, applying different configurations from 4.5 to 5.X, meaning that under some conditions, the output can grow to 5.8MW. The first important factor was to design a product according to the needs of the market, targeted to great on-site performance. The N155, for instance, was optimally designed for conditions in Northeast Mexico. Furthermore, we use mostly concrete towers instead of steel, which sets Nordex apart. We have a standard tower height of 120m, which is very competitive in pricing because concrete is cheaper than steel and just as efficient. By operating a local manufacturing facility in Mexico, we can bring down costs even further. Q: What are the company’s manufacturing opportunities regarding US exports? A: Since we started, our factories have increased their capacity every six months. The biggest factor making this possible has been US demand. This demand was already sizeable but with

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the new administration, we are expecting a further increase. As a result, although we are concerned about lower demand in Mexico, we expect US demand to maintain our facilities in full production. US demand can be met by our facility in Matamoros, Tamaulipas.

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Q: What is the company´s biggest success story in Mexico? A: The 90MW Peninsula wind farm in Yucatan is a strong contender. It features 36 WTGs of the EN110_2.5MW platform. The Peninsula and the company’s other project, the Dzilam 70MW wind farm, generate 10 percent of Yucatan’s energy. Envision is neither an IPP nor a developer. Our core business is to be a technology and services supplier. However, to do business in Mexico, we needed to take on a different role: that of the investor, taking on development risk and investing money to build projects. The goal is to generate a positive track record, which then can demonstrate to customers, partners and investors that we can deliver projects and secure financing on a non-recourse project finance basis. Therefore, we came to Mexico to invest, develop, finance and build. We were able to accomplish all of this at the Peninsula project. The project was in a very early state when we launched our JV with Vive Energía. Together, we secured PPAs when participating in the long-term auctions. The project operates with attractive energy prices and is located in a very good area. This project was considered to be one of the top wind projects in Mexico, exemplified by the multiple investors trying to arrange partnerships with us. We brought in a strategic partner to construct the project, Avanzia, which is the Mexican subsidiary of the Spanish Grupo ACS. The company participated with equity as well, helping us to diversify

Rafael Valdez

our investment. Our goal is to operate the project and in a couple of years, we will close the successful cycle by finding an investor to take the project off our hands.

Managing Director Latin America and the Caribbean at Envision Energy

Q: How has further regulatory uncertainty in Mexico affected Envision’s pipeline of projects? A: There is uncertainty in the market due to changes that have been made to contracts and agreements with CENACE and

The Ability to Deliver Wind Success no Matter the Challenges

CFE. It has made us more cautious as we assess the implications of recent measures and present injunctions. We are trying to change our strategy and adapt to this new reality that features novel regulations. We are still bullish and positive about Mexico in the medium to long term because of its fundamentals. In Mexico, the demand for electricity is growing. In areas such as Yucatan, the demand percentage is growing in double digits annually. There is simply not enough installed capacity to match the demand. Because of expected demand growth in the decades to come, there must be investment in new power generation. This needs to come from somewhere, which is reason for confidence. Q: How has the pandemic affected the company’s efforts to develop its projects? A: The situation is complicated because we are facing a sanitary pandemic, an economic pandemic and a regulatory pandemic, all at once. 2020 will be remembered as a turning point, with a clear before and after. COVID-19 was a difficult challenge to overcome, specifically because Envision was in the middle of constructing two large-scale projects in Mexico and Argentina.

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Both countries were hit heavily, and this came with a number of challenges, restrictions and limitations. In Mexico, we continued our work under very strict sanitary measures to ensure the safety of all involved. This meant we had to deal with certain incremental costs but we finished just in time.

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Q: Which project does GE consider to be its main success story in the Mexican renewable sector? A: Our first project in Mexico was the Santa Catarina wind farm, dating back several years ago. It is a small project just west of Monterrey. The biggest project we have had to date is El Mezquite, located in the state of Nuevo Leon as well. It is a 250 MW project, which has been operating for a couple of years now. It features 100 units of our 2.5MW 116 m-rotor turbines. The project is running very well. Cubico, an important customer, won that project in the second long-term energy auctions. Having the ability to compete on a lowest cost of energy basis and helping our customers deliver extremely cost-effective energy to Mexico is one of the reasons we are so proud of GE. Q: How does the company assess opportunities within Mexico’s renewable energy environment? A: GE is aware of the situation regarding Mexico’s renewables sector. We truly believe in the country’s potential because of the superb natural resources. There is a need to be a part of the energy transition that takes us away from fossil fuels. Even if this transition does not accelerate in the short term, we believe it will happen in the medium term. We have been in Mexico for more than 120 years and expect to be here at least 120 years more. We are seeing cases around the world where renewable energy

Jack Weisz

can offer the most cost-effective solutions for a clean energy transition, plus the incredibly positive impact it has on the environment and sustainability in general. This has taken place throughout Mexico’s auctions as well, and we believe there will

Commercial Director Latin America of Onshore Wind at GE Renewable Energy

be great returns in the future. All of this means that we remain committed in Mexico and will stay engaged with our customers and different stakeholders because there is still significant development happening now.

Energy Giant GE is Here to Stay, Whichever Way the Wind Blows

Q: What does GE think about the viability of potential hybrid projects in Mexico? A: The viability of this is assessed on a case-by-case basis. GE has a hybrid team, which specializes in understanding the proper combinations of hybrid technologies. This could be any combination between wind, solar and various storage types. We see potential in implementing this in Mexico, although it might be some time before we see a deployment of this type of solution in the country. To develop storage solutions, more robust investment in transmission and distribution, along with a robust regulatory framework, are needed. Once this happens, the market can start implementing more complex solutions in the country. Q: How does GE approach R&D and what are some of the company’s recent key developments in this regard? A: At its core, GE is a huge R&D company. As an example, one of our specialized research centers is located in upstate New York is dedicated exclusively to the development of these efforts. In renewables in particular, we have made significant commitments to R&D in the past few years. One key example is in offshore wind, especially with the development of the Haliade-X turbine. At the time it was launched, it was considered the largest offshore technology in the world by a long shot. The competition still found itself in single-digit MW capacity, whereas the Haliade-X offered double digits with its 12MW turbine. It has

a massive rotor, north of 220m. Since then, GE has invested more in the technology to upgrade it to a 13MW turbine. We have seen many GWs of sales around the world for this development as a return on the US$400 million investment in the program. This took the offshore segment to another level, and we saw our competitors take similar strides in order to elevate their portfolio’s competitiveness. In the area of onshore wind, we continue to invest every year in the development of our technology. The latest example of this is our Cypress platform, which is now in the 5.5MW nameplate capacity with 158m rotor turbines. It has a wide design envelope that fits in many different wind regimes. Many of these are highly suited for the Mexican wind profile. We will continue to increase the capacity and the rotor turbines in this platform. If you want to be competitive in the renewable market, you need to be committed to investing in R&D and introducing new technologies to reduce the cost of energy. This is the primary way to increase the penetration of renewables and allow it to compete with other forms of energy generation. Q: What do you predict will be the future trends regarding platforms? A: GE is the largest player in onshore wind in the Americas We will soon achieve around 450MW of the multiple GWs installed in Mexico. Nonetheless, the 2.5MW is our largest platform in Mexico. We are building a 50MW project in Baja California Sur which features 20 turbines of the 2.5MW 127m rotor, the next generation of the 2.5MW platform. However, we do envision a future where it is likely that the higher nameplate turbines will take precedent in the installed capacity of Mexico’s wind market. Ultimately, the selection of the right turbine model for each site depends on a number of factors in which the most important one ought to be levelized cost of electricity that each solution provides. Q: How can GE provide value through its grid and storage solutions? A: The company has solutions that can enable the grid system to operate more efficiently and to complement the construction of a wind farm, for example. At the El Mezquite wind farm, GE supplied not only the technology but also took part in the construction of the farm’s substations, as well as some of the mediumvoltage solutions that were needed on the turbine level. Storage is also becoming an increasingly viable business in the world. Mexico already has some solar and wind projects that have incorporated battery storage technology. GE can offer this technology if clients wish to incorporate them.

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Wind | 72

New Developments Ease Operations, Maintenance Innovations in O&M are allowing market players to turn issues into opportunities. In the O&M realm, more than one type of company can generally be found competing for the same space. These players include wind turbine original equipment manufacturers, suppliers of components, independent service providers and asset owners. Demand for these services is increasing, because wind capacity is growing as well, especially since several gigawatts of new capacity has been installed in recent years, increasing from 3.9GW in 2017 to 6.977GW in 2020, according to PRODESEN 2020-2034. Many of these wind projects have passed the original warranty periods that provide opportunities for companies to either sign on for longer periods or to look elsewhere in the market. “In the case of our first wind farm, the company that provided the turbines also took care of the operation and maintenance of the project. This contract lasted for five years and we have recently decided to renew it,” said Gustavo Ortega, Director General of Grupo México Energía to MBN. As project portfolios expand, an increasing number of renewable developers might become interested in beginning their own O&M arm. Despite the uncertain environment in Mexico’s energy sector, some key players in the O&M area see a great deal of opportunity. “Although we are concerned about the development of new energy projects, the O&M area involves long-term contracts and recurring activity, which provides stability in regard to our work in Mexico until more renewable projects materialize or other opportunities arise,” said Jorge Mediavilla, Director General Mexico of Ingeteam in an MBN interview. For power producers competing to offer the cheapest prices, O&M is essential. “Our clients are constantly looking to increase their value proposition and become stable power producers in the country,” Mediavilla added. As wind developments that stem from auctions enter into operation, companies have more projects within their portfolio to deal with. “When I joined Nordex in 2018, we had one project under O&M. However, we ended 2020 with almost 1,300MW under O&M, almost 10 times as much. All of it is with our new customers, although we had to adapt our business structure to ensure a smooth process to meet the new demand. O&M is among the business lines we expect will help maintain our operations when markets become unstable,” said Albert Sunyer, Country Manager Mexico of The Nordex Group. In countries like Mexico, O&M is no easy task. Wind projects can, at times, be far removed from the usual citybased infrastructure, and the terrain can be tricky as well. Technological innovations, such as drones and remote monitoring, can help. These technologies enable predictive Read the complete article More about this topic

maintenance practices instead of the traditional corrective approach. And with a drone, one single skilled operator can do all the work, without having to take a foot off the ground.

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Q: How important is Mexico in the company’s international portfolio? A: Mexico is one of our biggest market and represents a significant percentage of Ingeteam’s global portfolio for both sales volume and staff. We have 4000 employees worldwide and almost 450 employees in Mexico. As for the market’s potential, although we are concerned about the development of new energy projects, the O&M area involves long-term contracts and recurring activity, which provides stability in regard to our work in Mexico until more renewable projects materialize or other opportunities arise. Q: What is Ingeteam’s vision regarding the potential effects of the government´s restructuring of the energy sector? A: Last year, we were already perceiving a halt in opportunities that we could identify in the renewable energy environment. With the measures that CENACE and SENER have taken this year, many projects that were close to development have now been paused or canceled definitively. From our point of view, the measures that SENER has taken have not been helpful. The image of the Mexican energy market for investors has been somewhat damaged. Mexico’s regulatory framework is not the most attractive anymore. Instead, companies are looking at other Latin American for long-term investment stability.

Jorge Mediavilla

Q: What are the biggest challenges Ingeteam has identified in O&M in Mexico?

Director General Mexico of Ingeteam

A: One of the biggest challenges Mexico faces in the area of O&M is the difference in geography. In countries like Spain, geography differs much less because it is a smaller country. In Mexico, different areas represent significant differences in geography. There are cultural differences as well. In this regard,

Energy’s O&M Leader Sees Opportunities Despite Challenges

Mexico presents very different challenges depending on the region. Due to our international experience, we can bring knowhow to Mexico and adapt faster to situations. The company can also provide Mexican clients best practices that have been applied successfully in more than 20 countries. Q: What are Ingeteam’s goals for the short and medium-terms? A: On a global level, we will continue to execute our strategic plan, aligning the Group’s strategic objectives with those of the Sustainable Development Goals. We will also try to consolidate our line of progress trying to achieve double-digit growth in sales of our different business opportunities. In Mexico, we would like to maintain our O&M market share or grow it even further. We already provide services for around 3.5GW for wind energy and 1GW for solar in this regard. We also want to collaborate more with CFE through its tenders for transmission and distribution by supplying control and protection systems. Our general goal is to consolidate our position in the market.

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One of the main characteristics of Ingeteam is its involvement in the area of innovation. We dedicate around 5 percent of the group’s income to R&D to continuously improve our equipment or offer better alternatives tailored to the specific needs of the client.

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Q: What sets SOWITEC apart from other renewable energy developers? A: SOWITEC has excellent technicians who can analyze everything related to field development, including geographical studies that use advanced drone technology, electrical engineering, environmental studies and anthropological research. What sets SOWITEC apart from the competition is its team’s passion for the work it delivers. We are a developer company highly recognized for the collaboration that we have had with multinationals such as Santander, ENGIE or Enel. Since we started working in Mexico in 2008, we have always demonstrated our enthusiasm for renewable energy. We are committed and will continue our work in this sector, despite the challenging times it is going through. Q: In light of these changes, where does SOWITEC identify the best opportunities for business development? A: Vestas is a large company with global representation and it has been a part of the SOWITEC Group for a while. This has helped us to organize ourselves differently in regard to looking at the situation and analyzing projects from a sustainability and financing point of view. We have implemented internal tools to

Alejandra Domínguez

be able to shift toward projects that can be invested in the short term and that quickly yield returns as well. When we started working with Vestas, our main focus was on

Managing Director of SOWITEC

long-term auctions and utility-scale projects. Afterward, we started eyeing smaller private projects with PPAs under 100MW. These projects are tailored directly to the needs and demands of our potential clients, mostly located in central Mexico. After the auctions ended, our clients approached us to do projects there,

Large Projects Hibernate While Small PPA Projects Gain Traction

as this is where they needed energy. We got involved in this area, but soon after the government started to place limitations. Now, we are looking to work ore with Vestas in the shorter term. We make sure that the projects we develop meet criteria that allow us to gain returns in the short to medium term, while still focusing on client needs. We are also hopeful that the long-term energy auctions will return in 2021, which Minister of Energy Rocio Nahle alluded to in 2019. This is where our portfolio is the broadest. SOWITEC has also been examining new technologies. Mexico is rich when it comes to solar and wind resources. We continue to scout opportunities to diversify our pipeline, despite an uncertain environment in Mexico for renewables. This situation could still change, however. Q: How does SOWITEC view hybrid technologies? A: We are focusing on the combination of solar and wind. We look for sites where the two resources can be combined. Knowing that the sun shines during the day and wind blows

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at night, we are looking for these opportunities, which is challenging. We are also promoting new technologies, such as floating solar and Power-to-X. However, our main objective is conventional renewable energy and this is where Mexico has strong potential.

Renewable energy projects are likely to have an impact on

Wind | 75

What Distinguishes One Social Approach from Another?

their direct environment. This is especially true for wind farms, which cover substantial land area. Before these projects can be developed, companies need to implement an appropriate social approach to obtain permits. If renewable developers go above and beyond, rather than doing the bare minimum, companies and communities can reap the benefits. Mexico Energy Review asked companies developing and operating wind farms what sets their social approach apart from others.

We have a team of historians and anthropologists that focuses on social issues. When we first visit a site, we seek to establish contact with members of the community. We have never had any interactions with indigenous communities, but we research how people might react to us before we start a project. This strategy needs to be done before any contract is signed. We assess the local community and we identify the leaders. For instance, you would think local leaders or treasurers have the most influence over people, but in reality, it is often the doctor, priest, or even shop owners whom people look up to and respect their opinions. It is essential to find out who leads the community. We develop

Alejandra Domínguez

workshops with local communities and schools to educate them about renewable energy and its technology.

Managing Director of SOWITEC

We have definitely not abandoned our community approach during the pandemic. We continue to carry out our social programs. We communicate with our communities throughout digital channels such as Facebook live events, because we are not hosting any events at the moment. If we do, we ensure social distancing at all times. We have also put the company’s volunteers to work manufacturing face masks. The company then buys the face masks and donates them to the communities. For the most vulnerable people, we have arranged handouts. Grupo México donated protection equipment, ventilators and even an entire functional hospital which is being used to treat

Gustavo Ortega

COVID-19 patients.

Director General of Grupo México Energía

As it turns out, the social license is as important as getting the project financing or signing the PPA. It is essential. Therefore, our success story is that we have been able to put together, construct and bring into operation 100 percent of the projects we have committed to in Yucatan. We achieved this because we prioritize the company’s sustainability considerations. We have a sustainability direction which conforms our largest department, both in budget and human resources. This department is divided into two areas, environmental and social sustainability, each with their own department head and teams.

Benigno Villareal Director General of Vive Energía

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Q: How did Grupo México become involved in the country’s energy sector? A: Grupo México got involved for the very first time in the energy sector with the construction of a combined cycle power plant in Sonora. The company began to generate its own energy with a 255MW power plant. During the construction of the first plant Grupo Mexico decided to construct a second plant next to it. Today, we have a combined cycle plant with a total of 500MW. A natural gas pipeline was built to bring the gas in directly from the US to the plant. Fortunately, the project is located close to the border, meaning that a relatively short pipeline of 110km would be enough. This was the company’s first venture in the energy sector: a successful combined cycle power plant under the self-supply scheme. Q: How did the company get involved in renewable energy? A: While we were building this power plant, the company goal was to innovate and get involved in renewable energy generation. Clean energy is the future and we wanted to reduce our carbon emissions by supporting our Oaxacan projects with a wind farm. This resulted in the construction of a 74MW wind farm. We also built a small solar system to provide energy to our corporate offices in Hermosillo. It has a capacity of 80KW and it is the first solar system to include heliotrope technology. This

Gustavo Ortega

means the system follows the sun in two directions. It was an extremely innovative solution at the time, around seven years ago. Soon after, the company donated photovoltaic systems to public schools in Sonora and some other places.

Director General of Grupo México Energía

We are now building a second wind farm in Fenicias, which is located in Nuevo Leon. The farm represents an investment of US$250 million and will have 144MW capacity that will be used for our own supply.

Self-supply is the Name of the Game for Grupo México

Q: How does the company form alliances with other players to make its projects a success? A: In the beginning, we did not have much experience in the development of energy projects. We started by looking for renowned, experienced and internationally-oriented developers operating in Mexico. In the case of our first wind farm, the company that provided the turbines, Gamesa, also took care of the operation and maintenance of the project. This contract lasted for five years and we have recently decided to renew it. Q: Where does the company see the best opportunities to generate its own energy? A: I consider that with the changes we have been seeing in the energy regulation and the current uncertainty, identifying opportunities is somewhat limited. Grupo México Energía is still growing but we are focusing on the idea of self-supply. Entering the WEM to sell energy did save us money at the end. However, we would like to see this area more regulated. Currently, our operations continue but they are all under amparos and legal actions. Unfortunately, due to the situation brought on by the pandemic and the regulatory changes, we still have pending matters with CENACE and CRE, whose operations have been affected for several months now. With all

the surprises we have faced, uncertainty has taken root in the sector. Q: How has the company been adapting its strategy to the challenging times in the sector? A: We are under the self-supply scheme and, therefore, we mainly consume our energy ourselves. We intend to keep that position. We are not considering to switch to the WEM (Wholesale Electricity Market). We know that other companies in the sector have had success there. Nonetheless, our goal is to be our own energy generator and provider under our own terms. However, if there were to be projects in collaboration with CFE, that would allow for some greater clarity regarding investment and we would be inclined to participate. This could be a significantly interesting opportunity in the area of transmission, which requires both new infrastructure and substantial reinforcement. Q: How does the company assure safety regarding the operation of its power plants? A: From the very beginning, we have taken a series of measures and have enforced strict protocols focused on taking the temperature of employees, wearing face masks and providing antibacterial gel. In workspaces, such as our control center, we continuously sanitize working areas. Since we provide transportation for our employees, we had to almost triple it in some cases in order to maintain a safe distance inside the vehicles. Working schedules also were adapted to avoid any congestion in working areas. Furthermore, talking to our employees has been important. Although they are protected at work, they could find risk elsewhere. Regardless, our entire team has taken the pandemic seriously. This has yielded very good results: all our power plants have continued to function as usual. Q: How does Grupo México Energía define its social approach? A: We have definitely not abandoned our community approach during the pandemic. We continue to carry out our social programs. We communicate with our communities throughout digital channels such as Facebook live events, because we are not hosting any events at the moment. If we do, we ensure social distancing at all times. We have also put the company’s volunteers to work manufacturing face masks. The company then buys the face masks and donates them to the communities. For the most vulnerable people, we have arranged handouts. Grupo México donated protection equipment, ventilators and even an entire functional hospital which is being used to treat COVID-19 patients.

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SPOTLIGHT

Wind | 78

Benefits of Photogrammetric Aerial Surveys in Renewable Projects SOWITEC, Mexico’s technologically renowned renewable project developer, has added drones into its mix, using drone photogrammetry to take pictures needed to enable efficient civil engineering and simplify the work to obtain environmental and social permits. Photogrammetry is the science of making accurate measurements and models based on photographs. It lets companies accurately capture and model giant land parcels. SOWITEC’s drone approach takes the pictures needed to generate data simply, safely and cost-effectively. Information taken from the photographs can be used to create virtual models. These models are completely identical to the explored territory. Users can then implement a software created specifically for infrastructure design in urban areas and beyond to manipulate and alter the environment to gauge the potential impact from their equipment and vice versa. Through this approach, SOWITEC identifies environmental factors, studies bodies of water and analyzes human settlements in a short time frame. With a drone, one single skilled operator can do all the work. By using this innovate method in its own project development, SOWITEC is able to comply with strict security protocols and ensure high-quality standards in its execution. The approach allows the company to revolutionize the sector in new ways, especially by adding value to the social benefits of its renewable projects. In addition, it is a path that contributes to Mexico’s environmental sustainability.

Social License, Key to Unlocking Yucatan’s Wind Projects Benigno Villareal Director General of Vive Energía

Renewable Energy Projects Require Adaptability Alejandra Domínguez Managing Director of SOWITEC

Setting the Cornerstone in Tamaulipas Adrián Katzew CEO of Zuma Energía

Adaptability, Flexibility to Help Sector Survive Tough Times Jorge Ochoa Country Manager Mexico of UL Renewables

Hydropower’s Real Benefits Remain Undervalued Jacobo Mekler Weisburd Partner at COMEXHIDRO

Integral Solutions for Lower LCOE Jack Weisz Commercial Director Latin America of Onshore Wind at GE Renewable Energy

Manufacturing in Mexico as a Must Albert Sunyer Country Manager Mexico of The Nordex Group

Standardizing Data-Based Decision-Making Ralph Wegner CEO of Mexion Corporation

Setting the Stage for Energy Storage Lionel Bony Regional Director Mexico, Central America And The Caribbean at Neoen

Auction Winner Strikes Again Miguel Alonso Mexico Country Manager of Acciona Energía México

E-Commerce Connects Wind Farm Operators and Suppliers Jochem Sauer Owner and Managing Director of Spares In Motion

Acronyms 3PLs

Third Party Logistics

GNV

Vehicular natural gas

Alternating current

Gigawatt

AMDEE

Mexican wind energy association

IEA

International Energy Agency

AMGN

Mexican natural gas association

IRENA

International renewable energy agency

ASOLMEX

Mexican solar energy association

Joint venture

C&I

Commercial and industrial

LCOE

Levelized cost of energy

CAPEX

Capital expenditure

LIE

Electrical industry law

CEL

Clean energy certificates

LNG

Liquefied natural gas

CENACE

National energy control center

MBN

Mexico business news

CENAGAS

National gas control center

Megawatt

CFE

Federal electricity commission

O&M

Operations and maintenance

CNG

Compressed natural gas

PEMEX

Petróleos Mexicanos

CRE

Energy regulatory commission

PPA

Power purchase agreement

Direct current

PRODESEN

Distributed generation

National electricity system development program

EIA

Energy Information Administration

Photovoltaics

EMAT

Electromagnetic acoustic transducer

Qualified Suppliers

R&D

Research and development

EPC

Engineering, procurement and construction

SENER

Ministry of Energy

ESG

Environmental, social and corporate governance

USMCA

United States-MexicoCanada agreement

ETRM

Energy trading risk management

WEM

Wholesale electricity market

GDP

Gross domestic product

WTG

Wind turbine generator

GEMS

Grid energy management system

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71 MexicoView

33 Naturgy Mexico

77 Grupo México

Index Acciona 66, 68, 79

Eosol Energy 60

Acclaim Energy 6, 7, 15, 17

FIMER 56, 60

AMDEE 63, 65

ForeFront Power 44, 52, 57

AMFEF 60

Fotowatio Renewable Ventures (FRV) 15, 45

AMGN 25, 27

FrontierView 12

ASOLMEX 44, 45, 46

Generac 25, 35

ATA Renewables 9

Genesal Energy 41

ATCO Group 41

GE Renewable Energy 18, 63, 64, 70, 79

Atlas Renewable Energy 60

González Calvillo 28

Avanzia 69

GoodWe 60

BayWa r.e. 18, 60

Google 17

BBVA Mexico 12

Grupo ACS 69

BloombergNEF 15, 17

Grupo México Energía 63, 72, 75, 76, 77

CENACE 7, 45, 48, 69, 73, 76, 80

Hartree Partners 37, 41

CENAGAS 30, 32, 80

Huawei 48, 53, 56, 60

CFE 2, 7, 9, 15, 16, 20, 26, 37, 45, 47, 48, 49, 50, 51, 69,

Iberdrola 41, 44, 47

73, 77, 80 IEnova 25, 26, 28, 38, 39, 40 Chint Mexico 56 Ingeteam 63, 72, 73 Citi 6, 7, 11 Institute of the Americas 12 COMEXHIDRO 79 International Energy Agency (IEA) 45 Dynapower 18 International Renewable Energy Agency EDF Renewables 9

(IRENA) 17, 46

Edison Energy 15, 44, 49, 52

Jinko Solar 53

Enagás 25, 26, 30, 37

LONGi Green Energy Technology 44, 55

Enel Green Power 9, 66, 74

MAN Energy Solutions Mexico 25, 28, 36

Energy 2 Market (E2M) 6, 16, 52

Mexion Corporation 63, 67

Energy Agency of Puebla 41

Mirage Energy 25, 26, 29

Energy Information Administration (EIA) 26

Mitsui & Co. Power Americas 6, 8, 9, 13, 14

Énestas 41

National Hydrocarbons Commission 28

Engie Mexico 9, 74

Naturgy Mexico 25, 32

Envision Energy 63, 66, 69

Neoen 79

Eon Energy 15, 37, 41

NERA Economic Consulting 12

Index Next Energy 54

Solarever 60

Nextracker 53

Sowitec 63, 74, 75, 78

Nordex Group 63, 66, 68, 72, 79

TC Energy 38

Northland Power Energía 50, 51

Thompson & Knight 12

Pemcorp 19

Trina Solar 44, 54

PEMEX 2, 16, 29, 36, 37, 80

TÜV Rheinland 59

PRODESEN 2, 7, 26, 34, 45, 52, 61, 64, 72, 80

UL Renewables 79

Promotora Energética E3 41

Vera & Asociados 22

RER Energy Group 53

Vestas 66, 74

ROSEN Group 31

Vive Energía 69, 75, 79

Santander 74

Von Wobeser y Sierra 22

SENER 7, 18, 26, 34, 48, 73, 80

Wärtsilä 6, 19, 21

SEO Tribunal 17

World Economic Forum 8

Siemens Energy Mexico 28

Zuma Energía 79

Solarcentury 60

Photo Credits Cover Array Technologies

41 Iberdrola

1 E2M

42 Fluke Dominion

4 ATCO Group

43 Edison Energy

5 Iberdrola

46 Balam Fund

47 Iberdrola

Mitsui & Co. Power Americas

9 MBP

48 FRV

10 Enel Green Power

49 Edison Energy

11 MBP

50 Northland Power Energía

12 MBP

51 Northland Power Energía

13 Mitsui & Co. Power Americas

53 MBP

14 Mitsui & Co. Power Americas

54 Trina Solar

16 MBP

55 LONGi Solar

17 Acclaim Energy

56 FIMER, MBP, Chint Mexico

18 MBP, Dynapower, GE Renewable Energy

57 ForeFront Power

19 Wärtsilä

58 ForeFront Power

20 Wärtsilä

59 LONGi Solar

21 Wärtsilä

60 LONGi Solar

22 Iberdrola

61 Iberdrola

23 ATCO Group

62 Envision, Vive Energía

24 Rosen

65 AMDEE

27 AMGN

66 MBP

28 MBP

67 Mexion Corporation

29 Mirage Energy

68 MBP

30 Enagás

69 Envision

31 Rosen

70 GE Renewable Energy

32 Naturgy

71 MBP

33 Naturgy

73 Ingeteam

35 Generac

74 SOWITEC

36 MAN Energy Solutions

75 SOWITEC, Grupo México, Vive Energía

37 EON Energy, Enagás, MBP

76 Grupo México

38 IEnova

77 Grupo México

39 IEnova

78 SOWITEC

40 IEnova

79 Envato

Credits Journalist & Industry Analyst: Cas Biekmann Senior Editor: Mario Di Simine Senior Writer: Daniel González Senior Editorial Manager: José Escobedo Publication Coordinator: Mirjam Schipper Graphic Designer: Marcela Muñoz Graphic Designer: Tania Aguiñiga Senior Graphic Designer: Mónica López Design Director: Marcos González Web Development: Omar Sánchez Collaborator: Pedro Alcalá Collaborator: Paloma Durán Director General: Jeroen Posma

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Mexico Energy Review 2021

Articles inside

Natural Gas

Solar

State of the Industry

Introduction