With Yet Another Wind Farm, Mexico Dims Hopes For US Gas

Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!

Wind power is off to a roaring start in 2018, and among the highlights is a new wind farm in the state of Tamaulipas, Mexico. Okay, so new wind farms are a dime a dozen these days, but if you know your maps of the world you’ll see that Tamaulipas is in northeastern Mexico, hard by the major US oil and gas export hub of Corpus Christie, Texas, which means that this particular news is not good news for US natural gas stakeholders who are banking on the Mexican market for long term support.

Got all that?

Yet Another New Wind Farm For Mexico

Mexico’s recent energy reforms include a big, fat cookie for US natural gas producers, and exports from the US to Mexico are on the rise as the country looks to wean itself from coal.

However, the new wind farm, dubbed Salitrillos, shows that the bright outlook may be short-lived.

The new wind farm is just one of four awarded to Enel through its subsidiary, Enel Green Power México.

Salitrillos will account for 93 megawatts of a total of 593 among the four farms.

At a cost of $120 million, Salitrillos will produce about 400 gigawatt-hours of electricity per year by 2019, under a 20-year contract with Mexico’s Federal Electricity Commission (CFE, for Comisión Federal de Electricidad).

There, done and done.

Mexico Refines “Clean” Energy: Less Room For Natural Gas

Compared to CFE’s overall portfolio of 52,505 megawatts, 593 is a drop in the bucket.

However, Tamaulipas is a bellwether for energy production in Mexico. The state formerly known as Mexico’s top conventional energy producers is now touting its wind and solar resources.

In addition to the new Enel announcement, last summer Vestas let out word that it is supplying turbines for one of the largest wind power projects in Latin America, the 424 megawatt Reynosa Wind Farm.

Here’s Vestas’s Angélica Ruiz Celis enthusing over the opportunity:

Tamaulipas has a leading position in the country within wind energy and we are proud to be part of this by installing the Reynosa project. The blades for V136-3.45 MW projects in Latin America will be produced in Mexico which underlines our long-term localisation strategy in Mexico and Vestas’ strong commitment to support Mexico´s renewable target of 35 percent of clean energy by 2024.

The new burst of activity is framed by Mexico’s 2012 General Climate Change Law. Though the law left the door open to “clean” energy sources like natural gas and nuclear, other recent actions have steered policy toward a stronger focus on renewables, primarily wind and solar.

Last summer, Mexico produced a 15-year planning document for the National Electric System calling for a public sector investment of $107 billion along with “significant” private sector investment.

If all goes according to plan, about 81% of the total investment will involve power generation focusing on clean energy, with a heavy emphasis on wind and solar.

That rather optimistic outlook for renewables is supported by Mexico’s favorable climate for foreign investors. Here’s a snippet from the US Department of Commerce’s export.gov portal:

…Between 2010 and 2015, Mexico’s renewable energy industry attracted 44 foreign direct investment projects from the United States, Germany and Spain totaling USD 13.5 billion.

As described by energy.gov, there is still some wiggle room for natural gas:

…57,122 MW of capacity will be added to the national electricity system, of which 37.8 percent will be from conventional technologies (21,590.3 MW) and 62.2 percent from clean technologies (35,532.0 MW). Twenty-one percent of the additional capacity will be from wind, 12 percent from solar, 7.9 percent from hydroelectric and 1.67 percent from geothermal.

As Mexico gets serious about a coal-free future, its demand for natural gas will rise. However, Mexico Daily News teases out some hints that wind power will exceed expectations. Natural gas has a window now, but it may start closing sooner than expected:

AMDEE [Mexican Wind Energy Association] president Leopoldo Rodríguez told the newspaper El Financiero that private investment projects had added 480 megawatts to the sector in 2017, 20 megawatts more than what was added in 2016, but 2018 is shaping up to be much better.

The Business Case For Renewable Energy

In the same article, Mexico Daily News finds a red flag for natural gas:

According to El Financiero, the production of wind power in Mexico was initially motivated by environmental concerns but that has now largely been superseded by commercial interests.

Do tell!

One example is Mexican multinational beverage and retail company Femsa. It announced that it will get 45% of its power from wind this year and that figure will grow to “around 80% in 2019.

Meanwhile, Mexico’s solar industry is no slouch. Last fall Bloomberg noted that “Mexico has potential to be the seventh-largest solar photovoltaic (PV) market in the world by 2021,” bested only by Australia, Germany, Japan, the US, India and China.

As for natural gas, the fuel’s impact on global climate change, community health and local air and water resources has been coming into sharper focus, which means that companies looking for “clean” energy are beginning to zero out interest in natural gas.

That means the pressure is on, in Mexico and elsewhere, to tamp down natural gas for power generation even while reducing coal dependency.

Over the shorter term, US gas stakeholders still have plenty of incentive to bank on exporting to Mexico, as illustrated by the recent announcement of a new 500-mile Kinder Morgan pipeline from West Texas to the Corpus Christie hub.

So far uncertainty over President Trump’s NAFTA (North American Free Trade Agreement) position hasn’t put a damper on the rush to build new pipelines. If the President does decide to pull out, that will most likely push Mexico to re-think the idea of depending on US natural gas to decarbonize its power generation sector, and create all the motivation to ramp up investment in its own renewable energy resources.

In any case, shutting natural gas out of Mexico’s power generation market will not necessarily put a crimp in US production. With ExxonMobil in a leading position, the US natural gas industry has been making big moves into petrochemicals and plastics.

Follow me on Twitter.

Photo (screenshot): Enel Green Power.


Have a tip for CleanTechnica? Want to advertise? Want to suggest a guest for our CleanTech Talk podcast? Contact us here.

Latest CleanTechnica TV Video


Advertisement
 
CleanTechnica uses affiliate links. See our policy here.

Tina Casey

Tina specializes in advanced energy technology, military sustainability, emerging materials, biofuels, ESG and related policy and political matters. Views expressed are her own. Follow her on LinkedIn, Threads, or Bluesky.

Tina Casey has 3276 posts and counting. See all posts by Tina Casey