BMI View: Mexico is making considerable progress in its renewables expansion and we are maintaining our largely positive 10-year forecasts for the growth in renewables capacity owing to the positive fundamentals across the industry. That said, we believe that the expansion in the country's solar sector will remain below its considerable potential until the government takes steps to mitigate regulatory uncertainty and improve the sector's operating environment.
|e/f = BMI estimate/forecast. Source: EIA, National Sources, BMI|
|Generation, Non-Hydropower Renewables, TWh||13.091||15.193||17.339||19.865||25.058||28.750||31.183|
|Generation, Non-Hydropower Renewables, % y-o-y||22.409||16.051||14.124||14.570||26.145||14.733||8.461|
|Capacity, Non-Hydroelectric Renewables, MW||4,756.5||6,359.6||7,663.1||9,107.3||9,976.9||10,918.7||11,887.3|
|Capacity, Non-Hydroelectric Renewables, % y-o-y||25.5||33.7||20.5||18.8||9.5||9.4||8.9|
Latest Updates and Structural Trends
Growth in Mexico's non-hydro renewables industry continued to accelerate in 2015, registering 25.5% year-on-year (y-o-y) expansion in capacity and 22.4% rise in generation. We anticipate non-hydro renewables capacity to grow by annual average rate of 13.5% between 2016 and 2025, more than tripling the total installed capacity base to 16.4GW in 2025. However, this will still account for just 16.9% of the country's total generation capacity.
Expansion in the Mexican solar power sector will remain below its considerable potential until the government takes steps to mitigate regulatory uncertainty and improve the sector's operating environment, which is clouded by a 15% import tariff on solar panels and the country's currency depreciation. In light of these hurdles, our growth forecast for Mexico's solar power capacity through 2020 is conservative relative to the pipeline of projects holding power generation permits.
According to reports in December 2015, private equity firm First Reserve Corporation will partner with Mexico Power Group (MPG) to build the 130MW La Bufa wind farm in Zacatecas, Mexico. MPG will build the facility in collaboration with US-based Cannon Power Group and Spanish wind turbine maker Gamesa. Construction of the project has already started, with completion expected in early 2017.
In November 2015, Mexico's Grupo Dragon, via its unit Geotermica para el Desarrollo, secured a concession licence to develop a 50MW geothermal project in San Pedro Lagunillas in the Mexican state of Nayarit. The government noted the licence, the first for a private firm, is for 30 years and consists of two water re-injection wells and 18 production wells.
In late 2015, Mexican mining group Industrias Penoles and Spain-based renewable energy company EDP Renovavei started building a USD350mn wind project in General Cepeda Municipality, Coahuila, Mexico. The 180MW wind farm will initially be installed with 97 turbines, which will eventually be increased to 400. The facility will supply power to Industrias Penoles' zinc mining operations in Coahuila.
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.