Experts rank the quality of Mexico's photovoltaic (PV) and solar thermal resources among the world's best. In terms of photovoltaic resources, the country has significant advantages:
- Average Global Horizontal Irradiation (GHI) is approximately 5 kWh/m2/day, the energy equivalent of 50 times Mexico's annual national electricity generation
- 70% of the territory has GHI values greater than 4.5kWh/m2
- Just 0.06% of the Mexican national territory would be sufficient to generate the overall electricity consumption of Mexico in 2005 according the GTZ report "Nichos de mercado para sistemas fotovoltáicos en conexión a la red eléctrica de México" (June 2009).
Global Horizontal Solar Radiation
Mexico's average solar resources for PV (5 kWh/m2/day) are more than 60% higher than the best solar in Germany (5.4 GW of installed PV). Spain and Germany are the global PV leaders, with a total of 8.7 GW, 67% of the world's PV installed capacity, according to the IEA Photovoltaic Power Systems Program 2008 Annual Report.
Comparative Solar Resources, PV Performance, Energy Pay-Back and Energy Return (GHI kWh/m2)
Sources: GTZ (2009) "Nichos de Mercado Para Sistemas Fotovoltáicos en Conexión a la Red Eléctrica en México," June 2009; International Energy Agency Photovoltaic Power Systems Programme (2006), "Compared assessment of selected environmental indicators of photovoltaic electricity in OECD cities," April 2006.
Higher than Germany and Spain
According to the study Solar Energy Sector (2009) for the Mexican Secretaría de Energía (SENER, the Energy Department), PV installed in many cities across Northern and Central Mexico has an "energy payback time" (EPBT) of less than two years. This represents the time required for these PV systems to produce the amount of energy needed to manufacture all the PV components.
The EPBT is based on a figure of 2,525 kWh, the electrical energy required to manufacture 1 kW of a complete PV system. This kWh figure includes PV panels, wiring and electronic-connection devices. The EPBT varies according to the PV location's solar resources. This 2,525 kWh figure was used by the International Energy Agency in a 2006 report titled "Compared assessment of selected environmental indicators of photovoltaic electricity in OECD cities."
The "energy return factor" (ERF) for PV installed in most of Mexico produces 17 times the electricity required to manufacture the PV system, 1.5 times higher than the ERF for Germany, equal to most of Spain. The ERF refers to the amount of electricity produced over a 30-year period, minus the electricity required to manufacture the complete system. The ERF is the number of times the embodied energy from the PV manufacturing is produced over the life of the system. The average ERF for PV systems in Mexico is 1.7 years compared to 2.6 years for Munich.
Two facts emerge from the Solar Energy Sector study:
- Northern Mexico's Direct Normal Insolation is equivalent to the best in the U.S. Southwest and in the North African deserts
- Assuming a net system efficiency of 15%, a square of 25 km in Chihuahua or in the Sonora desert would be sufficient to supply all of Mexico's electricity (based on information provided by Energy Department and GTZ (2009) at the "Renewable Energy for Sustainable Development in México" study).
Direct Normal Solar Radiation
Mexico's extraordinary solar resources have largely gone untapped but the solar sector is emerging with a promising future.
Mexico Solar Installations by Type, 2007-2008
- There are no solar thermal electricity plants in Mexico
- 80% of PV installations in Mexico are for rural electrification and are off-grid ("Renewable Energy for Sustainable Development in México" study)
- 78% of all solar hot water installations is for swimming pool heating
"Huge" Potential Solar Market
According to the study IDB Public/Private Sector CTF Proposal, México Public/Private, undertaken by the Inter-American Development Bank (2009), Mexico's photovoltaic and solar thermal market potential is 45 GW, approximately 75% of Mexico's 2008 electricity generation capacity. In 2008, Mexico had approximately 59.5 GW of total installed electricity generation capacity and expects to add 10.8 GW in new capacity additions by the end of 2017, of which 20% could be from renewables.
One estimate presented at the "Global Renewable Energy Forum: Scaling Up Renewable Energy" conference in León in October 2009 indicated that solar thermal and PV electricity will account for up to five percent of the country's energy supply by 2030 and up to ten percent by 2050. Solar thermal is expected to play a greater the role in heat generation rather than generating electricity with five percent to ten percent of Mexico's heat expected to come from solar thermal in 2030 and ten percent to 15 percent by 2050.
Solar thermal potential in Northern Mexico
The quality and quantity of northern Mexico's solar resources are as good as anywhere in the world. Mexico's best solar thermal resources are in the states of Baja California, Sonora and Chihuahua. Baja California has 5 GW of solar thermal generation capacity, with the potential to generate 11.6 GWhs of solar electricity annually, as the Solar Thermal Resources Inventory undertaken as part of the Western Renewable Energy Zones Project revealed.
Despite the extensive wind development planned for Northern Baja for export to the U.S., there are considerably greater solar thermal resources in the country than wind resources.
According to BSRIA, a consultancy organization, the Mexican solar thermal market is growing strongly. Traditionally, it has been a flat-plate collector market, but the last few years have seen a substantial increase in the number of small companies directly importing vacuum-tube systems from China.
Solar Thermal Market Size in the Americas
New Renewable Energy Law
The "Renewable Energy Development and Financing for Energy Transition Law" (LAERFTE in Mexico) became effective in November 2008 and mandated the country's Secretaría de Energía to produce a National Strategy for Energy Transition and Sustainable Energy Use and a Special Program for Renewable Energy. The law's main objective is to regulate the use of renewable energy resources and clean technology and to establish a national strategy and financing instruments to allow Mexico to scale up electricity generation based on renewable resources. SENER and Comisión Reguladora de Energía (CRE) are responsible for refining those mechanisms and establishing legal instruments to allow Mexico to increase renewable power generation.
With LAERFTE, the Mexican Congress took the first key steps to address the lack of regulatory and pricing certainty for renewable-energy project implementation. Perhaps of greatest significance is that the LAERFTE shifts responsibility from the CFE to the CRE for developing a clear and transparent tariff system for power producers.
Nowhere in the world is there more evidence of the explosive growth in utility-scale solar than in the southwestern U.S. There has been a literal 'land rush' since 2007 by solar developers and speculators who have made massive filings for rights-of-way to lock in large tracts of U.S.-government owned desert lands to site central solar projects.
In November 2008 there were approximately 119 applications before the California and Arizona BLMs requesting land for some 83 GW of solar projects. Since then, 81 of these applications (representing 60 GW of projects) have moved forward in development and advanced to the stage of filing required "Plans of Development" as of October 2009.
The step between filing a BLM right-of-way application and submitting a major technical and engineered document such as the "Plan of Development" requires resources and filters out land speculators. The project developers for most of these 81 projects have demonstrated commitment and have gone through the additional step of submitting the required 'recover fee' deposits to compensate BLM for application processing. Projects that have filed "Applications For Certifications" to CEC and the other projects that have announced PPAs that involve BLM lands have been screened out of the 81 projects. The table below represents a reasonable profile and inventory of potential new capacity additions, showing the enormous scale of the solar thermal electric market in the Southwest deserts.
Utility-Scale Solar Projects with Active BLM Applications
California and Arizona, as of October 2009
('Active' means projects that have advanced by filing a "Plan of Development" with the BLM)
U.S.-Mexico bilateral framework
The "U.S.-Mexico Bilateral Framework on Clean Energy and Climate Change" agreed to by Presidents Calderon and Obama in April 2009 builds on co-operation in the border region, promotes efforts to reduce greenhouse-gas emissions and strengthens the reliability and flow of cross-border electricity grids, while enabling neighboring border states to work together to strengthen energy trade.
Perhaps the largest near-term solar opportunity for Mexican companies is to initiate the development and construction of utility-scale solar power plants in Mexico to export electricity to the United States.
Sonora's government has been doing this since 2006, when the World Bank announced the funding of a $50 million grant for a Hybrid Solar Thermal Power Plant Project at Agua Prieta, Sonora. The project was initially approved in 1999 with the construction contract expected to be awarded in 2010. The project will demonstrate the benefits of integrating a 31 MW parabolic-trough solar field with a 535 MW conventional thermal facility, using combined-cycle gas turbines that will contribute to reducing the long-term costs of the technology to reductions in greenhouse gas emissions, as the 2008 report "Eco‐Innovation Policies in México" documented.
The project grant is funded through the Global Environmental Facility Trust Fund of the World Bank.
Also, Universidad de Sonora is developing a utility-scale solar system with a U.S. company. TxTec AC is the Institute for Technology Transfer at the University of Sonora, which has a long history of cooperation with industry in aquaculture, agriculture, metallurgy, geology, energy and the environment. TxTec promotes university/industry collaboration for mutual support of technology development and technology transfer to improve the socioeconomic conditions and productivity. TxTec has experienced faculty and researchers, as well as equipped laboratories in multiple specialties, such as the National Laboratory of Solar Concentration Systems in collaboration with Universidad de Sonora and Universidad Nacional Autónoma de México (UNAM), and provides confidential industrial-research facilities as well as economic and business consulting to nurture successful new technology developments in the region.
In 2008, TxTec and Utility Scale Solar, Inc. (USS), of Palo Alto, California, announced a joint agreement to develop advanced CSP power-plant designs. The systems feature TxTec's contributions to tower receiver designs and USS's breakthrough heliostat (sun tracker) technology. Under the agreement, TxTec and USS will jointly develop CSP plant designs suited for Mexico's Sonoran Plateau, one of the best solar regions in the world and one ideally suited for the CSP plant configuration known as "power tower." TxTec will deploy and test USS's next-generation heliostat technology at TxTec's CSP lab plant, in conjunction with advanced tower receiver designs developed and tested by TxTec. The two parties are also collaborating on a 50-megawatt power-tower plant that will supply enough power to the Mexican grid to power more than 53,000 households.
The Mexican federal government has recognized the contributions of solar and other renewable energies in terms of greenhouse-gas mitigation. Translating that into concrete reforms remains the challenge, but the last decade has seen substantial progress on that front. IPPs, for example, are now permitted to sell power to CFE for the industrial sector.
To date, Mexico's solar sector has concentrated on off-grid photovoltaics (PV). The federal government has identified PV as one of the most cost-effective solutions for providing power to the three percent of rural Mexicans not currently connected to the grid. Approximately 60,000 to 80,000 PV systems are now in operation across rural Mexico.
Moisés Gómez Reyna, Economy Secretary of the Sonora state government, explained the policy, law and infrastructure arrangements that their administration is creating to start a joint-venture to rent the desert at San Luis Río Colorado to produce energy and sell it to California or Arizona.
"Boundary states in Mexico have been betting on renewable energy since 2005. We want to be considered providers of wind and solar energy inside the country and to our foreign neighbors," Gómez explained.
To gain credibility as energy providers, the Sonoran state administration has been establishing relationships with other Mexican states to build an 'energy corridor' to produce solar and wind energy to serve California and Arizona since 2009. The opportunity is there -- three of Mexico's sunniest cities are in Sonora. It is just a matter of finding the necessary government backing.
Solar power in all its forms amounts today to less than one percent of Mexico's energy matrix, according to CSP Today. For all its potential, utility-scale concentrated solar power (CSP) remains very much in its infancy. But Sonora wants to grow up fast.