China, Mexico to partner on wind farms

Updated: 2016-05-09 05:54

By MAO PENGFEI in Mexico City(China Daily Latin America)

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A Chinese-Mexican partnership is set to invest some $200 million to build two wind farms, the first on a windswept stretch of the Gulf of Mexico.

Mexican energy developer Vive Energia and Chinese turbine manufacturer Envision Energy have joined forces to work on the green energy projects in Mexico's booming southeast Yucatan Peninsula, through their joint venture firm Renewable Energy of the Peninsula (Energia Renovable de la Peninsula).

The first wind farm is to be built, with an investment of $120 million, in Progreso, a Yucatan port on the Gulf of Mexico.

Its 36 120-meter-high wind turbines will churn out 90 megawatts (MW) of energy, with most of it (85 MW) to be sold to the state-run Federal Electricity Commission (CFE) and the remainder to the private sector.

"This project represents the largest investment ever by any Chinese company in Mexico's wind energy sector," said Rafael Valdez, Envision Energy's director for Latin America.

The project is one of 16 wind farms and solar plants that 11 firms from five different countries will be building in different parts of Mexico after winning the rights at a federal government auction held in late March, Mexico's daily Milenio reported at the time.

In this way, Mexico's CFE aims to boost electricity to the national grid through renewable energy sources.

"We are very pleased, because out of the many investments we have seen in Latin America by the Asian country ... most have been in the extractive sector, in natural resources projects," Valdez said.

In contrast, this project represents "capital, technology and infrastructure that comes to Mexico to stay", Valdez said.

In addition, he said, the project will generate clean energy that will promote productivity on the peninsula, create jobs and boost revenue.

Construction is expected to get underway in the second half of 2016 and be completed sometime next year, before the March 2018 deadline set by the government for starting operations.

Valdez said the joint venture firm is in talks with multinational development banks and financial institutions in the two countries to drum up financing for the project, the only one in the auction that proposed a hybrid scheme to supply energy to both the CFE and the private sector.

Envision Energy, China's third-largest producer of wind turbines and among the top 10 in the world, plans to bring the 36 turbines, each measuring 110 meters in diameter and capable of generating 2.5 MW of energy, over from China, while the steel towers they are mounted on will be made in Mexico.

Along with the wind farm in Progreso, the joint venture is set to begin building a second wind farm in 2016 in Dzilam de Bravo, a coastal town located just more than 80 kilometers east of Progreso.

This $80 million wind farm will have 70 MW in installed capacity via 28 2.5 MW wind turbines and supply energy to various companies on the peninsula, which is home to the states of Yucatan, Quintana Roo and Campeche.

The head of Viva Energia, Jose Antonio Aguilar, said the decision to build the plants in the Yucatan Peninsula was based on the growing demand for electricity in the region's cities and tourist resorts, among them Cancun and the Riviera Maya, on Mexico's Caribbean coast.

"In the past 12 years, the demand for energy in the peninsula has grown by about 7 percent, according to figures from the Ministry of Energy, while the national average has been 3.2 percent," Aguilar said.

The two wind farms will be the first projects by the two companies, which partnered last year.

"Envision first entered the Mexican market in October 2015 with the purchase of a controlling stake in a 600 MW portfolio owned by Vive Energia," the company says on its website.

"That deal was said to be the biggest direct investment so far by a Chinese firm in Mexico's burgeoning renewables sector," the company added.

Until then, Envision's work in Latin America centered mainly on supplying wind turbines, starting in 2014, to Chile.

The venture hopes to develop similar projects over the next five years, with a target goal of generating up to 2,000 MW, Envision's Valdez said.

He said his company's presence in Mexico is the result of joint efforts by the Mexican and Chinese governments to promote the transfer of technology and boost Chinese investment in the country.

"We are very enthusiastic about the opportunity to enter the Mexican market and to see crystallize two projects that are practically ready to begin building this year," Valdez said.