- Posted by: criss
- Category: Global PV Market Insights Report
1. Brief Intro-Mexico
The United States of Mexico is located in Latin America, bordering the United States in the north and Central America in the south. With a total area of 1.96 million square km, it is the third largest country in Latin America. With a total population of 123 million, it ranks 11th in the world. Mexico’s GDP ranks 13th in the world, second only to Brazil’s in Latin America. Since joining the north American free trade zone in 1994, the economy has developed rapidly, and it is also one of the earliest countries to recover from the financial crisis in 2008.
Mexico is in the tropics and has lower dimensions. 70% of the region is dry with little rain and plenty of light. The average annual solar radiation in most of its regions is above 2000KWH/square meter, which is almost twice that of major countries and regions such as China, the United States and Europe.
Mexico is rich in oil and gas resources and has long been dominated by fossil energy. In 2013, the Mexican government began to push forward the energy reform and set the renewable energy development target and solar installation target by 2050. Since then, the domestic renewable energy installation in Mexico began to increase rapidly, mainly with wind and solar power generation. By the end of 2018, the proportion of renewable energy generation was 15%, leaving a lot of room for further development from the planned goals of 35% in 2024 and 50% in 2050.
2. Mexico Power Generation Structure
Mexico’s oil and gas reserves are among the largest in the world, and more than 80 percent of the country’s electricity generation comes from fossil fuels. Natural gas accounted for the largest share of electricity generation, accounting for 60 percent of the total.
Mexico’s domestic statistics of renewable energy include: hydro power, geothermal, solar, wind power, the proportion of renewable energy power generation basically maintained at about 15%, there is no significant increase. The main reason is the internal structure of renewable energy: hydroelectric power is down, wind power and solar power is up.
Hydro power accounted for 65% of renewable energy generation in 2018, down from more than 80% in 2010. It remains the largest source of renewable energy.
The fastest growing renewable energy source is wind power, which more than doubled from less than 3% in 2010 to more than 20%t in 2018.
However, the development of solar started late, and the power generation was always less than 1%. 2018 was the first year that the domestic solar installation volume increased greatly in Mexico, and the solar power generation data was not reflected in the electricity generation statistics of 2018 yet.
Hydropower remains Brazil’s most important energy source. Brazil is the world’s second largest producer of hydropower after China. In 1998, hydropower accounted for nearly 90% of the country’s electricity power generation.
3. Related Policy
- Solar Development Policy
In 2013, former Mexican President Enrique Peña Nieto announced to actively promote the reform of renewable energy. In the same year released the development target of renewable energy. It is planned that the proportion of renewable energy generation will reach 35% by 2024 and 50% by 2050. To reduce greenhouse gas emissions by 50% from 2000 levels by 2050. The total installed capacity of solar is planned to reach 22GW during 2020-2030.
In 2015, the green certificate trade for renewable energy was launched.
In 2016, the long-term power auction plan was released, and the plan is to auction and invite bids for large-scale renewable energy power generation facilities every year. Since 2016, it has held three times, auctioning about 5GW of solar projects.
In May 2018, Mexico’s ministry of energy released the national power system development plan. In the next 15 years, it plans to invest us $106 million in the development of the national power system, of which $60 million will be used to support renewable energy generation, wind power generation accounting for 24% and solar power generation accounting for 13%.
In December 2018, a new government was elected and a new President Andrés Manuel López Obrador took office to adjust the existing renewable energy development policies.
In January 2019, the fourth long-term electricity auction was cancelled due to the change of government.
In July 2019, the Mexican government announced a private renewable energy auction, allowing small buyers to joint bidding for large projects.
- FEED-IN TARIFF
Mexico adopts the system of bidding and auction, and the feed-in tariff is determined by bidding. Thanks to abundant solar radiation resources, the price of solar facilities in Mexico is generally lower. The latest auction was the third one in 2017, and the winning bid for solar energy was us $0.02057 /KWH, the lowest feed-in tariff in the world at the time.
- Project Auction
Since 2016, 3 long-term power auctions have been held. The fourth auction, scheduled for November 2018, was cancelled due to the change of government. Auction time and allocation capacity are as follows
4. Solar PV Development Info
PV installations in Brazil began to increase rapidly from 2017, mainly due to the capacity of large-scale PV projects auctioned after 2014 and connected to the grid. Brazil has installed more than 1GW of new capacity every year since 2017.
The long-term power auction held in 2016 is the starting point for the vigorous development of the Mexican solar market. With the government’s installation target as the background, three long-term power auctions were held from 2016 to 2018, with a cumulative distribution of about 5GW of solar capacity.
The winner of solar projects in the auction began to be built and connected to the grid in 2018, making the new solar installations in Mexico in 2018 more than all previous years combined, with the annual new installations exceeding 2.5GW, becoming the super gigawatt market for the first time, ranking the 7th in the world.
In December 2018, new President Lopez took office and made some adjustments to Mexico’s renewable energy development policy, canceling the fourth long-term electricity auction conference scheduled for January 2019. The new President has not changed the goals of Mexico’s renewable energy program, and a replacement for the auction has not yet to be formally announced.
It is worth noting that about 80% of the 2.5gw of new solar installations in 2018 came from the allocated capacity projects at auction. By the end of 2018, the uninstalled capacity has been allocated to be about 2.7GW. These projects will be successively completed and connected to the grid in 2019, providing a strong guarantee for the installed capacity in 2019.
By the end of the first half of 2019, Mexico’s newly installed solar capacity is close to 1GW, and the newly installed solar capacity is expected to be about 1.5gw in the second half of the year. The new solar capacity is expected to be about 2.4gw in this year, making Mexico one of the most important solar install countries in 2019.
At the beginning of 2019, about 735MW large-scale photovoltaic projects are under construction in Brazil. It is estimated that the installed capacity of large-scale photovoltaic projects will be more than 960MW in 2019, and the installed capacity of distributed photovoltaic projects will be 500MW. The annual installed capacity is expected to exceed 1.4GW, and the total installed capacity will reach 4GW.
From the perspective of the distribution of solar installations, since long-term power auction projects are mostly large utility projects, centralized power generation projects account for more than 80% of the solar installations in Mexico, while distributed projects account for 17%, making Mexico a solar market dominated by utility projects.
5. Solar Module Import (from China)
According to the export volume data of solar modules of (GNEI) GesseyNewEnergyInfo, China exported about 4GW of solar modules to Mexico in the whole year of 2018, with the average monthly export volume of 330MW and the highest export volume of over 500MW.
In May 2019, the export volume of Mexican market was 223MW, ranking 11th in China’s pv module export volume.
|This Month Rank||Last Month Rank||Country||Export Volume(MW)||Export Amount(MillionUSD)||Export Percent|
According to the size proportion in the export solar module analysis report of GNEI , the Mexican market prefers 72 large size module, and the size proportion has been above 95% since 2018. It is in line with the characteristics of centralized ground power projects in the Mexican market.
In 2018, the Mexican market preferred poly modules. In 2019, the proportion of mono modules has been increasing and has exceeded that of poly modules.
Mexico’s solar market is a late start, starting from the long-term power auction in 2016. 2018 is the first year of a big increase in the number of installations, making it the top 10 market of new solar installations in the world. Judging from the remaining project stock at auction, the new solar installation volume of about 2.4GW will be maintained in 2019.
Long-term power auctions were halted after Mexico’s December 2018 election. The possible alternative policy is the private renewable energy auction scheme to be launched in July 2019, which needs to pay attention to the implementation results and allocation capacity of the new scheme.
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