On the 6th March, Chamber partners Solar Plaza hosted their second Solar Future conference in Mexico City.
Mexico has an increasingly exciting renewables market with plenty of potential; however certain barriers to entry still exist:
Over half of Mexico has a global-mean average annual radiation of over kWh/m2 per day and some of the most expensive electricity in the OECD. The prices of solar energy have fallen by approximately 70% over the last couple of years. Various solar energy companies currently operating in Mexico were able to share their success stories demonstrating that solar energy can be a clean and competitive alternative to traditional sources. For e.g. Hector Olea from Gauss Energy talked about his company’s electricity island in Baja California which was funded in part by NAFIN.
However Mexico’s electricity subsidies are among the largest in the world covering about 30 percent of overall power costs and distorting prices and inflating demand. Conversely, Hector Olea, when acknowledging these limitations, admitted that they do mean that only the most cost-effective and sustainable projects can be successful. Approximately half of Mexico’s electricity is generated from natural gas but domestic production has fallen over recent years and insufficient pipeline infrastructure limits the amount of gas Mexico can import from its neighbour to the North.
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