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SUGAR LAND--November 30, 2017--Researched by Industrial Info Resources (Sugar Land, Texas--Italian utility Enel S.p.A. (BIT:ENEL) (Rome, Italy) has won the rights to develop four wind projects with a combined capacity of 593 megawatts (MW) in Mexico. Industrial Info is tracking $5.4 billion in active Enel projects, including $2.4 billion under construction in Mexico.
The latest projects were awarded to Enel's renewable-energy subsidiary, Enel Rinnovabile S.A. de C.V. (Mexico City, Mexico), by the National Center for Energy Control (CENACE) during the country's third long-term electricity tender since its energy reform four years ago. Enel said the win consolidates its position as Mexico's leading renewable-energy developer. Capital spending for the new facilities is expected to approach $700 million, in line with investments outlined in the Enel's current strategic plan. The windfarms are slated to enter operation in 2020, and once fully operational, are expected to produce 2.09 terawatt-hours and offset around 960,000 tons of carbon-dioxide emissions each year, the utility said.
Construction of three of the facilities--Amistad II, III and IV--is planned in Acuña, in the northern state of Coahuila. Amistad II and III are each 100-megawatt (MW) plants, while Amistad IV is expected to be 149 MW. Enel kicked off construction on the 200-MW Amistad I windfarm in March. Energia Limpia de La Amistad, S de RL de CV, a subsidiary of Enel Green Power Mexico S de RL de CV (EGPM) (Mexico City), is leading the $270 million project, which will have 95 Gamesa G114-2.1 MW wind-turbine generator sets and span more than 12,000 acres. It's expected to enter full commercial operation by early 2019. For more information on Amistad I, see Industrial Info's project report and related article - Construction Begins on 200-MW Windfarm in Coahuila.
A fourth wind plant--the 244-MW Dolores project--is planned for the northeastern Mexico municipality of China, in Nuevo León. Each project will be backed by a contract providing for the sale of specified energy volumes to Mexico's Cámara de Compensación exchange for a period of 15 years and of the associated Clean Energy Certificates (CELs) for a 20-year period. Long-term auctions for energy, capacity and CELs are designed to provide an entry point for new players on a competitive basis and in a cost-effective way to bring low-carbon generation into the mix. The Mexican government determines the CELs requirements on a yearly basis, three years in advance of the compliance period. The first compliance period will be in 2018 with a quota set at 5%.
In terms of installed capacity and project portfolio, Enel is the largest renewable-energy operator in Mexico. The company currently operates projects in the country with a total capacity of 728 MW--675 MW of that from wind and 53 MW from hydropower. The Acuña and China projects would nearly double Enel's existing 675 MW of wind power, but represent only a fraction of the renewable-energy capacity the company has in its pipeline.
Antonio Cammisecra, head of Global Renewable Energies and EGPM chief executive officer, said: "This is just another step of our strategy in the country that we will implement through organic growth as well as through the 'build, sell and operate' model that enables us to leverage on our global pipeline, accelerating our growth worldwide."
In its 2018-2020 strategic plan, Enel said it's targeting 24.6 billion euros (US$29.2 billion) in capital expenditure over the next three years, with a significant amount--5.3 billion euros (US$6.3 billion) versus 4.7 billion euros (US$5.6 billion) in the previous plan--earmarked for digitalization. The company also is aiming for earnings before interest, taxes and amortization (EBITDA) of 3.3 billion euros (US$3.9 billion) in 2020, a 32% increase from its EBITDA in 2017.
In the power and gas retail business units, Enel expects to deliver 21% EBITDA growth, reaching 2.9 billion euros (US$3.4 billion) in 2020, up from 2.4 billion euros (US$2.8 billion) in 2017, while increasing overall volumes sold by more than 30%.
Mexico's third electricity auction included five wind projects apart from 10 other renewable projects placed for auction. Those included nine solar plants and a turbogas project having a combined capacity of 2.56 gigawatts (GW), and are expected to see an overall capital investment of $2.4 billion.
Prior to its energy reform, the Federal Commission of Electricity (CFE) had dominated Mexico's electricity sector by providing generation, transmission and distribution services. However, reforms initiated by President Enrique Peña Nieto in December 2013 and adopted by Mexico's Congress liberalized much of the nation's electricity industry, and increasing the availability of renewable energy sources was a top goal.
Click on the image at right for an IEA graph showing projected power investments in Mexico through 2040.
The Energy Transition Law (Reforma Energética) established a target of 35% of electricity generation from renewable energy by 2024. To incentivize investment in renewables, the government introduced clean-energy certificates, a market instrument that is part of broader power sector, and designed to support the share of electricity consumption generated from clean-energy sources. Revenue from the sale of certificates is intended to be invested in other renewable-energy projects.
Click on the image at right for an IEA graph showing forecasted changes in Mexico's power generation.
Mexico's total wind-power potential is estimated at around 50 GW, with the strongest sites spread across the Isthmus of Tehuantepec in Oaxaca (which currently holds around 80% of total installed capacity), the International Energy Agency (IEA) (Paris, France) noted in its 2016 World Energy Outlook. The average capacity factor for wind power is currently more than 20% higher than the global average and is estimated to rise by nearly 30% over the projection period--reflecting the ample availability of suitable sites for turbines throughout the country, according to the IEA. By 2040, wind power is forecast to increase to more than 22 GW, making it the second-largest renewable-energy source in terms of capacity--after solar photovoltaic--in Mexico's electricity mix.
Click on the image at right for an IEA graph showing projected growth of renewable energy in Mexico.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
The latest projects were awarded to Enel's renewable-energy subsidiary, Enel Rinnovabile S.A. de C.V. (Mexico City, Mexico), by the National Center for Energy Control (CENACE) during the country's third long-term electricity tender since its energy reform four years ago. Enel said the win consolidates its position as Mexico's leading renewable-energy developer. Capital spending for the new facilities is expected to approach $700 million, in line with investments outlined in the Enel's current strategic plan. The windfarms are slated to enter operation in 2020, and once fully operational, are expected to produce 2.09 terawatt-hours and offset around 960,000 tons of carbon-dioxide emissions each year, the utility said.
Construction of three of the facilities--Amistad II, III and IV--is planned in Acuña, in the northern state of Coahuila. Amistad II and III are each 100-megawatt (MW) plants, while Amistad IV is expected to be 149 MW. Enel kicked off construction on the 200-MW Amistad I windfarm in March. Energia Limpia de La Amistad, S de RL de CV, a subsidiary of Enel Green Power Mexico S de RL de CV (EGPM) (Mexico City), is leading the $270 million project, which will have 95 Gamesa G114-2.1 MW wind-turbine generator sets and span more than 12,000 acres. It's expected to enter full commercial operation by early 2019. For more information on Amistad I, see Industrial Info's project report and related article - Construction Begins on 200-MW Windfarm in Coahuila.
A fourth wind plant--the 244-MW Dolores project--is planned for the northeastern Mexico municipality of China, in Nuevo León. Each project will be backed by a contract providing for the sale of specified energy volumes to Mexico's Cámara de Compensación exchange for a period of 15 years and of the associated Clean Energy Certificates (CELs) for a 20-year period. Long-term auctions for energy, capacity and CELs are designed to provide an entry point for new players on a competitive basis and in a cost-effective way to bring low-carbon generation into the mix. The Mexican government determines the CELs requirements on a yearly basis, three years in advance of the compliance period. The first compliance period will be in 2018 with a quota set at 5%.
In terms of installed capacity and project portfolio, Enel is the largest renewable-energy operator in Mexico. The company currently operates projects in the country with a total capacity of 728 MW--675 MW of that from wind and 53 MW from hydropower. The Acuña and China projects would nearly double Enel's existing 675 MW of wind power, but represent only a fraction of the renewable-energy capacity the company has in its pipeline.
Antonio Cammisecra, head of Global Renewable Energies and EGPM chief executive officer, said: "This is just another step of our strategy in the country that we will implement through organic growth as well as through the 'build, sell and operate' model that enables us to leverage on our global pipeline, accelerating our growth worldwide."
In its 2018-2020 strategic plan, Enel said it's targeting 24.6 billion euros (US$29.2 billion) in capital expenditure over the next three years, with a significant amount--5.3 billion euros (US$6.3 billion) versus 4.7 billion euros (US$5.6 billion) in the previous plan--earmarked for digitalization. The company also is aiming for earnings before interest, taxes and amortization (EBITDA) of 3.3 billion euros (US$3.9 billion) in 2020, a 32% increase from its EBITDA in 2017.
In the power and gas retail business units, Enel expects to deliver 21% EBITDA growth, reaching 2.9 billion euros (US$3.4 billion) in 2020, up from 2.4 billion euros (US$2.8 billion) in 2017, while increasing overall volumes sold by more than 30%.
Mexico's third electricity auction included five wind projects apart from 10 other renewable projects placed for auction. Those included nine solar plants and a turbogas project having a combined capacity of 2.56 gigawatts (GW), and are expected to see an overall capital investment of $2.4 billion.
Prior to its energy reform, the Federal Commission of Electricity (CFE) had dominated Mexico's electricity sector by providing generation, transmission and distribution services. However, reforms initiated by President Enrique Peña Nieto in December 2013 and adopted by Mexico's Congress liberalized much of the nation's electricity industry, and increasing the availability of renewable energy sources was a top goal.
The Energy Transition Law (Reforma Energética) established a target of 35% of electricity generation from renewable energy by 2024. To incentivize investment in renewables, the government introduced clean-energy certificates, a market instrument that is part of broader power sector, and designed to support the share of electricity consumption generated from clean-energy sources. Revenue from the sale of certificates is intended to be invested in other renewable-energy projects.
Mexico's total wind-power potential is estimated at around 50 GW, with the strongest sites spread across the Isthmus of Tehuantepec in Oaxaca (which currently holds around 80% of total installed capacity), the International Energy Agency (IEA) (Paris, France) noted in its 2016 World Energy Outlook. The average capacity factor for wind power is currently more than 20% higher than the global average and is estimated to rise by nearly 30% over the projection period--reflecting the ample availability of suitable sites for turbines throughout the country, according to the IEA. By 2040, wind power is forecast to increase to more than 22 GW, making it the second-largest renewable-energy source in terms of capacity--after solar photovoltaic--in Mexico's electricity mix.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
