The Mexican solar revolution has become a reality with the first electricity power auction awarding several renewable energy developers power purchase agreements for 1,720 MW of power in Mexico.

Solar Energy in Mexico

After enacting dramatic reforms to the country’s energy regime two years ago, Mexico has set ambitious goals for making the country a vibrant and thriving home for renewable energy generation, particularly in the realm of the creation of a Mexican solar revolution. The country has invested heavily in the newly privatized energy sector, aiming to produce a third of its energy consumed from renewable sources by 2024.

Mexico’s currently installed solar capacity is less than 1 gigawatt, but this should triple within a few years, as the new energy vision takes flight with actual agreements and positive steps taken by the private sector to exploit this opportunity to the fullest. The Latin American country is currently ranked 43rd among other nations for solar favorability, and recent investment is gearing up for big things in the near future, as the country auctions off contracts to meet this demand.

First Electricity Power Auction

The first auction of this kind since Mexico opened up the energy industry to private competition was recently held in March of this year. On April 1, SunPower Systems announced they had been awarded power purchase agreements with CFE, Mexico’s state-owned electric utility, to deliver one terawatt-hour of energy, equivalent to approximately 500 megawatts – approximately 20% of the overall auctions offerings. Six other companies were awarded 15-year contracts to rights to provide the state-owned Comision Federal de Electricidad (CFE) with power beginning in 2018, including Enel Green Power, Recurrent Energy, and others. Both foreign and domestic firms will reap the benefits of participating in this Mexican solar revolution.

According to Cesar Emiliano Hernandez, Mexico’s deputy electricity minister, these contracts are expected to generate more than $2.1 billion in investment in the next two years. According to the National Electricity System Development Program released last year, Mexico is seeking to add 20 GW of clean energy in the next 15 years, much of which will come from the solar industry. Solar energy accounted for 1,100 MW sold in last month’s auction, and SunPower Systems was awarded the lion’s share with 25% of solar.

The auction is being heralded as a significant success as the Mexican solar revolution picks up steam. Nearly 85% of the power needed will be supplied through these contracts, and Mexico plans to hold another auction this month to meet the remaining 15%.