Americas

Mexico Could Supply Electricity to the US South, But Hurdles Remain

The Mexican government has an ambitious plan to generate solar energy in the northern state of Sonora, and potentially export it to the US Southwest. The plan, known as the "Sonora Plan," involves the construction of five massive photovoltaic solar facilities, new transmission lines, and a lithium mining venture.
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The first tangible result of this initiative is a 120-megawatt capacity photovoltaic plant in the Sonoran seaside city of Puerto Peñasco that began feeding the national grid last month, with another 300 megawatts expected to be online next year.
Mexican officials have hailed the Puerto Peñasco facility as the "first of its kind in Mexico, the largest in all of America due to its generation capacity and fifth worldwide when considering the storage system." The plant is owned and operated by the Comisión Federal de Electricidad (CFE), Mexico's state energy firm.
The CFE is overseeing the entire Sonora Plan, which aims to provide solar power to "the national electricity system where everything is interconnected," according to David Figueroa, Sonora's state government representative in Arizona.
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The second stage of the plan would involve transmitting part of the generated capacity to the Baja California circuit, which is entirely separate from Mexico's national grid. During this phase, the sizable boost in capacity could power some 160,800 homes in Sonora and Baja California.
According to Figueroa, the third stage would be "looking for the possibility of selling to the [southern] part of the United States," as Baja California and California are already linked through a binational electricity system. That network is part of the Western Interconnection, which stretches from Western Canada to Baja California in Mexico.
There are concerns that electricity produced at the plant could be expensive, but Figueroa believes that costs "will be low" in part because the land was "completely donated" by real estate magnate Daniel Chávez, who has apparent family connections to López Obrador. Figueroa also emphasized that the amount of solar energy available in this region is among the highest in the world, enabling any solar panel situated there to "produce much more than anywhere else on Earth."
Aerial view of the northern border state of Sonora where state electric utility CFE is building the largest solar plant in all of Latin America, in Puerto Penasco, Sonora state, Mexico on Thursday, Feb. 2, 2023.
Riccardo Bracho, a senior international program manager for the National Renewable Energy Laboratory (NREL), said that if Mexico can connect Baja California to the national grid, he expects that Baja California will end up with an "over-capacity" of electricity. That surplus "likely could be exported to the US," Bracho told US media.
Bracho, who has long been studying Mexico's clean energy potential, described the country in a 2022 report as "ideally positioned to become a clean energy powerhouse." By developing renewable energy across the country and increasing interconnections with the US and Central America, Mexico "could increase system reliability and resilience, and provide opportunities for clean energy exports," he wrote in the report.
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However, the question of whether the US will be involved in financing the project remains unclear. While Mexican President Andrés Manuel López Obrador has spoken with US climate envoy John Kerry about the "possibility of an investment of $5 billion," there have been no concrete commitments.
Another negative signal is the US Trade Representative's reaction to the current Mexican leadership's electric energy policy. In particular, the agency criticizes the large share of the state in this sector and insists on a greater role for private industry.

"[The measures that prioritizes CFE-produced electricity] undermine American companies and U.S.-produced energy in favor of Mexico’s state-owned electrical utility," USTR declared.

Luisa Sierra, energy director for Iniciativa Climática de México, also noticed "it’s fundamental that the market instruments are reactivated."
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