Bringing distributed energy to Mexico with community wind projects

July 25, 2018
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Ignacio López Martin

Mexico has seen an exponential growth of electricity generation projects through large scale renewable energy in the last few years. This, undoubtedly, has boosted the country’s sustainable development, and with these large scale renewable energy projects Mexico has been a good example for Latin American countries on how to transform and diversify the country’s electricity mix.

The rise of those large scale renewable energy generation projects, however, also creates a challenge for the country’s electricity distribution system. The system is not updated for renewable energy integration and remains very inefficient. Also, these large developments are often carried out by big international companies, bringing in their own personnel for the construction of these parks. Thus, having no or minimal impact on the local economy.

Distributed energy, however, could bring this much needed visible impact on the local economy. Distributed energy has a small footprint, utilizes local distribution lines, stabilizes the local distribution grid and brings local economic stimulus (e.g. revenues and jobs). From the environmental prospective it has a very small impact to the local environment. These small, local projects can blend with the great Mexican biosphere and environmental preservation guidelines.

In Mexico, distributed energy has mostly been executed with solar. Mexico has, however, a great mix of renewable resources and has many areas where wind energy has more potential than solar energy, due to factors such as lower solar radiation, high temperatures, limited available space, and high wind resources.

There are many countries that have implemented these types of projects all over the world (Europe has many factories, farms, water treatment plants and communities benefiting from distributed energy) and where the door opens to local investment, making local economies benefit from these projects.

 

Distributed Wind Energy – The Community Model

EWT has implemented innovative models to promote community wind projects and where local population has been the main beneficiary of these type of sustainable projects.

We see an immense potential for community wind projects in Mexico. For the implementation of these projects, however, regulation needs to be adapted for the model to work. New regulation should stimulate the development and implementation of community projects, where main problems for this type of projects dealing with challenges such as permitting process, access to finance and a clear legal framework

‘De buurtmolen’

In the Netherlands we have successfully implemented a community wind model, called the “Buurtmolen” project. The model works as follows

  • The Netherlands has two regulations that stimulates the model the “Stimulations for renewable energy generation” and the “postcode roos”, a reduced energy taxation scheme.
  • The wind turbine will be owned by an Energy Cooperative, which consists of the residents of the community that take part in the project.
  • The community from the dedicated ‘postcode roos’ area can subscribe to the cooperative and the project, giving all the participants the benefits of lower energy prices
  • The participants pay a small fee as contribution of the project and the cooperative via their electricity bill. Since the tax reduction (the energy generated by renewables is free of taxes via the postcode roos scheme) is still more than the contribution fee, the participants save 20-30% on their electricity bill.
  • The project is pre-financed partially by loans and crowd funding

This community wind model creates various benefits to the community. Not only does it provide cheaper energy, it also gives a more stable electricity distribution network and the community is able to take control of its own energy management.

To make community wind projects work in Mexico, we’ve put down some ideas:

  • A specific regulation for distributed wind projects should be implemented. E.g.
    • Facilitation of permits (same exception scheme as the current distributed generation law, but up to 1MW for wind energy, since the technology needs such extension to be competitive).
    • Net metering for all residential or industrial customers in the project area.
    • Specific legal model for this type of cooperatives.
    • Tax exemptions, accelerated depreciation, or other promotion mechanisms that have already been used in Mexico and other countries.
  • Formulas or funds that allows financing of these projects in an accessible way (soft credits), by federal entities or from the same municipalities.
  • Funds or options so that the municipalities themselves can implement this type of project
  • Regulation so that the municipalities themselves can be the promoters, managers and owners of these projects.

 

Community wind in Mexico

In Mexico, there is already a first initiative of a distributed wind project that is also community-based. It serves the community of Puerto Peñasco (Sonora) to reduce its energy cost.

EWT is committed to bring distributed energy to Mexico and actively supports the promotion of community wind. If you would like to hear more about who we are or what we do, please don’t hesitate to get in contact with our Mexican team!

Elie Villeda

Business Development Mexico

+52 (1)55 3399 19 61

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