BMI View: Our optimistic outlook for Mexico's non-hydro renewables industry is underpinned by the country's strong commitment to developing renewable energy sources, large project pipeline and sound industry fundamentals. Growth will be driven primarily by the wind and solar sectors, with smaller contributions coming from geothermal and biomass projects. We note that continuously declining electricity prices in Mexico present a downside risk to our forecasts , as they may gradually erode renewables' competitiveness relative to traditional thermal generation sources.
|e/f = BMI estimate/forecast. Source: EIA, National sources, BMI|
|Generation, Non-Hydropower Renewables, TWh||13.090||16.960||21.310||26.260||30.520||33.180||35.650|
|Generation, Non-Hydropower Renewables, % y-o-y||22.420||29.520||25.680||23.230||16.220||8.700||7.450|
|Capacity, Non-Hydroelectric Renewables, MW||4,546.5||6,036.7||7,900.3||10,089.8||11,261.7||12,383.5||13,493.9|
|Capacity, Non-Hydroelectric Renewables, % y-o-y||20.0||32.8||30.9||27.7||11.6||10.0||9.0|
Latest Updates And Structural Trends
This quarter, we have maintained our forecasts for Mexico's non-hydro renewables industry. Supported by strong industry and country-specific fundamentals, we forecast non-hydro renewables capacity to average 15.5% growth during 2016-2025, reaching a total of 18.6GW. By 2025, we believe non-hydro renewables' share in the country's total generation capacity will reach 10.4%, up from 4.2%.
We hold our view that wind power will be the technology of choice in Mexico's non-hydro renewables industry. The wind sector is set to grow at the fastest pace (in absolute terms) over the coming decade, accounting for more than 58% of total non-hydro renewables generation and nearly 72% of total capacity by 2025.
Solar power module manufacturer Canadian Solar has signed a power purchase agreement (PPA) with the Federal Electricity Commission (CFE) for the 63MW solar power plant in Aguascalientes. The project is expected to generate electricity by September 2018.
Dutch pension fund service provider PGGM has decided to quit the 396MW Eolica del Sur wind power project in Oaxaca. PGGM will withdraw the EUR250mn (USD285mn) it had allocated for the scheme. The 132-turbine project, which was approved in 2015, has seen several years of delays after a court placed the development on hold due to community resistance.
We hold optimistic prospects for Mexico's energy transmission & distribution infrastructure. In July 2016, the country's government reportedly launched a tender for two transmission lines and three substations for the states of Chihuahua and Durango. Moreover, the government aims to award the construction of other two new major power transmission lines between 2016 and 2017.
The Mexico Renewables Report researched at source contains BMI Research's assessment of the current renewables market in Mexico. The report also contains historical data together with forecasts to end-2018 covering electricity generation (TWh) and electricity capacity (MW).
The renewables sectors covered in the report include Wind, Solar, Geothermal, Tidal and Wave, and Biomass (See Table of Contents for exact coverage). The report also features details on government green energy agendas and funding opportunities, as well as presenting a detailed list of key renewables projects currently being planned or undertaken in Mexico, their capacity, the timeframe of construction and their current status.
The report discusses the various energy policies currently in force, including targets, subsidies and the relevant infrastructure developments or limitations which might impact on renewables growth, analysing the potential effects of regulatory changes in conjunction with the background macroeconomic outlook. Finally, there is a general overview of the competitive landscape in Mexico, together with a detailed summary of the main utilities and manufacturers present and their business operations.
BMI's Mexico Renewables Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with unique independent forecasts and competitive intelligence on the Mexico renewables industry.
- Benchmark BMI's independent renewables industry forecasts for Mexico to test other views - a key input for successful budgeting and planning in the renewables market.
- Target business opportunities and risks in the Mexico renewables sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in the country.
BMI Industry View
Summary of BMI's key industry forecasts, views and trend analysis covering the renewables market in Mexico, regulatory changes, major investments and projects and significant multinational and national company developments.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the renewables sector and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series (2010-2012) and forecasts to end-2018 for electricity generation (TWh) and electricity generating capacity (MW) for each individual renewables sector present in the country.
These in turn are broken down into:
Electricity Generation: Overall capacity (TWh), growth % change year-on-year, KWh per capita, % of Total Non-Hydropower renewables generation, % of total electricity generation.
Electricity Capacity: Overall capacity (MW), growth % change year-on-year, % of non-hydroelectric renewables capacity and % of total capacity.
These forecasts are in turn supported by explicit assumptions, in conjunction with analysis of the key risks to the main forecast.
Business Environment Rankings
BMI's Renewables Business Environment Rankings provide fully comparable Risk-Reward Rankings aimed at investors in the regional renewables market.
The rankings methodology makes sophisticated use of various industry, economic and demographic data point.