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Solar Market Potential in Mexico
Intersolar Europe 2016, Export forum: Energy Solutions Made in Germany
Munich, June 23, 2016
c Gauss Energia
Alberto Valdés
President
Mexican Solar Association
Joscha Rosenbusch
Principal Advisor GIZ
Programa Energia Solar a Gran
Escala en México (DKTI-Solar)
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Program “Energía Solar a Gran Escala en México”
German Climate and Technology Initiative - DKTI
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30.06.2016
Objective:
Improve the technological, financial and organisational conditions for
large scale solar energy applications in Mexico
Areas of work:
Market introduction of
innovative solar
technologies
Solar financing
capacities
Mecanisms for policy
coordination between
public and private
sector
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Solar Process
Heat
PV
Power Plants
Program “Energía Solar a Gran Escala en México”
German Climate and Technology Initiative - DKTI
Public
Private
Academia and
Innovation
Financing
On behalf of:
BMZ - Federal Ministry for
Economic Cooperation and
Development
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Power sector clean generation goals
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Clean generation
•
Fossil fuel based plant
with CCS
•
Hydro
•
Nuclear
•
Any renewable energy
source (wind, solar,
bioenergy, others).
•
Efficient cogeneration
(definition by CRE)
20% 25%
30% 35%
40%
50%
2015 2018 2021 2024 2033 2053
clean
conventional
Fuente: KPMG, Mexico Energy Conference
The new model of the
electricity market
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Reform implementation timeline (selection)
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30.06.2016
08/14 10/14 03/15 05/15 09/15 12/15 01/16 03/16 07/16 10/16 2018
Electricity
Industry
Law
Creation
of
CENACE
Clean
energy
certificates
(CEL)
guidelines
5% clean
energy
oblication by
2018
1st
PRODESEN
Energy
transition law
& legal
unbundling
CFE
Results 1st
long term
auction
Principles
power
market
framework
Pase 1
day ahead
and real
time market
Medium
Term
Auction
Rules
Real operation
day ahead,
real time an
CEL market
General
Provisions
Distributed
Generation
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Incentives & support for Solar
30.06.2016
Accelerated depreciation
100% of investments in machinery and equipment used for renewable energy generation. Include fixed assets, expenses and deferred charges. Min 5 years operation
Clean Energy Certificates (CELs)
Mandate to generate 5% of overall consumption by clean energy in 2018. All market participants that consume electricity in the system must comply with the mandate and can use CELs to meet obligations. Solar is a sources eligible for CELs.(1CEL=1MWh)
Net Metering Billing credit for excess electricity generated by RE facilities of retail electricity consumer
Sustainable Energy Fund
R&D Renewable energy and energy efficiency.
Projects and calls managed by SENER and CONACYT
Source: GIZ, BNEF, Ley del Impuesto sobre la Renta, SENER, Ley Federal de Derechos
Auctions Regulated Austions for Electricity suppliers (eg CFE) for clean energy, capaity and CELs
other Non-discriminatory network access; reation of wholesale markets, Improved
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Avarage end user electricity prices 2006-2015
30.06.2016
•
Subventioned prices
for Households and
Agriculture below
Industry, Business
and Service-sector
•
Average price higher
than in the USA
Source
:
CFE Household Business Industry Services AgriculturePhotovoltaic prices drop
1,8
1,5
1,1
0,9
0,7
0,6
0,5
2009 2010 2011 2012 2013 2014 2015COST PER WATT PV MODULE
US
$/ WpAño
359
248
157
125
97,5 84
64
47
2009 2010 2011 2012 2013 2014 2015 2016LEVELIZED COST ELECTRICITY
FOR PHOTOVOLTAIC SYSTEMS
US
$/ M WhAño
Fuente: Bloomberg
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Large Scale Solar Power
Market opportunities
Spot
market
• Merchant solar projects: selling electricity and clean energy
certificates (CELs) on the spot.
Bilateral contracts
• Medium- to long-term PPA contracts with large consumers or
qualified suppliers.
Auctions
• 15-year energy and 20-year CEL PPA contract with CFE.
• Depending on the technology, 15-year capacity contract may be
applicable.
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Corporate PPA
30.06.2016 34 28 - 9 8 - 27 - 42 25 277 125 172 301 266 801 275 0 100 200 300 400 500 600 700 800 900 1999 2000 2001 2002 2003 2004 2005 2006 2007 20 0 8 2009 2010 2011 2012 2013 2014 2015Wind Biomass & Waste Small hydro Geothermal Solar
Source: CRE, Bloomberg New Energy Finance
Total clean energy capacity installed by
technology (MW) and commissioning date
(1999-2015)
•
2.4GW clean energy PPAs with
corporates
•
2009 increase: wind
•
Uncertainty by energy reform: 2015
•
Almost 1GW projects to be
commissioned until 2018
•
Industrials waiting for price development
•
Partner shy away from signing long term
PPA
•
Consumer to comply with 5% clean
energy by 2018 : significant cost of non
compliance
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Long Term Auction
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• 15-year contracts on offer
• Bids in $/MW
• Firm capacity, able to generate at the system’s 100 most-critical hours
• Projects sign a contract to have a given amount of capacity available at a determined zone and dispatch electricity to the spot market when required .
Capacity
• 15-year contracts on offer
• Bids in $/MWh
• Only clean energy
technologies to participate in the auction (both
baseload and intermittent)
• If the source is intermittent, hourly benchmarks
references (factores de
ajuste horário) will be
applied to determine final revenue
• Non-intermittent source pricing is much simpler with contracts paying at a
straight $/MWh rate.
• 20-year contracts on offer
• Bids in $/CEL
• Clean energy-only
• Projects may be located in any part of the grid system
Energy
Clean energy
Solar
85%
Wind
15%
Renewable power on first
auction in Mexico
Renewables distribution on 1
st
Auction
Solar
74%
Wind
26%
Renewable Energy on first
Auction in Mexico
Page 14 30.0 40.0 50.0 60.0 70.0 80.0 0.0 0.5 1.0 1.5 2.0 2.5 En e l Su n powe r Acciona Energ y JinkoSolar Inve st me nt Alarde En vi sion & Vive E ne rg ía Aldesa Recurre nt En ergy The rmi on En erg y Alte r En ersu n
Energy (TWh) CEL(m) Price $/MWh
Mexico’s 1
st
power auction winners by energy (TWh),
CELs (m) and price ($/MWh)
30.06.2016 USD1 = MXN 17.32
Source: CENACE, Bloomberg New Energy Finance
•
A total of 5.4TWh of
power and 5.4m CELs
was contracted
•
The auction’s average
contract price was
$47.6/MWh
•
The lowest bid of
$35.5/MWh came from
a solar project being
developed by Enel
Green Power
30.0 40.0 50.0 60.0 70.0 80.0 0.0 0.5 1.0 1.5 2.0 2.5 En e l Su n powe r Acciona Energ y JinkoSolar Inve st me nt Alarde En vi sion & Vive E ne rg ía Aldesa Recurre nt En ergy The rmi on En erg y Alte r En ersu nPotential market for DG
0 500000 1000000 1500000 2000000 2500000 3000000 3500000Instalaciones potenciales
Market Size for DG
Usuarios DAC
Instalaciones Comercios
Instalaciones Industriales
With a
penetration level
of 5% renewable
energies gets
installed capacity
of 3 GW
Fuente: CFE
Page 16 source: CFE-CRE
2,7
6,7
16,1
31,7
55,7
85,0
0
10
20
30
40
50
60
70
80
90
MW installed per year
PV Distributed Generation - Market Evolution
source: ANES / CFE-CRE
Fuente: Informe sobre la Participación de Energías Renovables en la Generación de Electricidad en México, al 30 de junio del 2015.
2015
Solar
41 MW
2028
Solar
1,2 GW
MW
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Guideline Solar Distributed Generation (02/2016)
DG Products Definition of DG Compensation model
Tarif regulation Business model CEL obligation
Page 18 30.06.2016
Source: IRENA Global Atlas
Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH
DKTI - Programa de Energía Solar a Gran Escala en México (DKTI Solar)
Joscha Rosenbusch
Asesor Principal / Programmkomponentenleiter
T +52 (55) 5536 0330 M +52 (1) (55) 4354 3898 E joscha.rosenbusch@giz.de I www.giz.de/mexiko