EDC exploring RE investments in Mexico

by Myrna Velasco – June 13, 2016

from Manila Bulletin

Lopez-led Energy Development Corporation (EDC) is exploring investments for renewable energy (RE) developments in Latin American countries, this time with particular interest in Mexico.

“There are invitations from other countries in the region (Latin America) to invest in RE, so we’re looking at it…for example in Mexico, we’re not doing anything yet but we’re studying,” EDC president Richard B. Tantoco has noted.

He qualified their interest in Mexico was somehow stimulated because of the deregulation and restructuring process the country’s energy market has been advancing on.

“Mexico’s energy sector is privatizing, deregulating, so we want to take a look. No concrete plans yet today,” Tantoco said.

For geothermal, he opined that it is already ‘ripe to invest’ in Chile in the next one to two years following their government’s move to cancel two new coal-fired power plant projects. But he said they are still examining the ‘pricing concern’ before proceeding with investment plans.

In this year’s gathering of global energy players in Houston, Mexican President Enrique Peña-Nieto stipulated that their new Law of Energy Transition intends to facilitate “the integration of clean energy into the electricity production matrix.”

Their goal would be to have 35-percent of their generated power in Mexico coming from clean sources by year 2024; and inching up higher to 40-percent in 2035; then to 50-percent toward 2050.

In the restructuring of their electricity sector, the Mexican president emphasized that they envision policy reforms “to offer more competitive tariffs for the industry, business and homes.”

To underpin the paradigm shift, he told an audience of global energy players that their new Wholesale Electricity Market kicked off operations January this year, which in Peña-Nieto’s view could “make possible free competition in the production and merchandising of electricity.”

The Mexican president explained that “the key principle of this new electricity market – in favor of the consumers – is that the lowest cost of electricity is dispatched first.”

To support clean energy investments to flourish in the Mexican power market, Peña-Nieto indicated that their Federal Electricity Commission is also set to tender this year, their first “great transmission line with private participation,” based on the dictum of the country’s Energy Reform Law.

“This important infrastructure project will allow clean energy – wind and hydro – from the Isthmus of Tehuantepec, to flow and satisfy the demand of the center of the country,” he said. This transmission project stretches roughly 600 kilometers or 372 miles.

“It will be the first line built in Mexico using high voltage direct current technology and an estimated investment of $1.2 billion,” Peña-Nieto said.