Baja California, Mexico -- Gamesa, the expansionist
Spanish wind-power company, is stepping up its forays
into Mexican with hopes to sell as many as 2,000 wind
turbines to Baja California. Its plans come at a time
when observers expect the windy state bordering Southern
California will attract $6bn of wind investments by 2015.
A string of industry heavyweights including Cannon Power,
Union Fenosa and Sempra Energy are already pursuing ambitious
projects in the region and others are on their way, sources
say. The companies hope to export the bulk of future
production to the sunny state, which is having trouble
meeting its renewable energy targets.
Wind Resource Map of Baja California. Purple, Red and
Dark Blue areas are rated Excellent, Outstanding, and
Superb, respectively. Credit NREL.
Gamesa's regional sales director William Robinson says
developers are so enthused about Baja's prospects that
the region could attract 5,000 MW of generation capacity
by 2017. This will require around 2,000 turbines, which
Gamesa hopes to supply from its US factories.
Already, Gamesa has a 10-year contract to sell turbines
to Cannon Power, which is on track to build as much as
1,000 MW of wind parks by 2016.
$6 Billion by 2015
Cannon is just as excited about the region's wind potential.
According to president Gary Hardke, the area stretching
10 miles wide and 80 miles long could lure as much as
$6bn from a wide range of wind players in five years.
This is mainly because California's saturated wind market
and difficult permit environment is making it increasingly
hard for developers to expand there. In contrast, Baja
has a huge untapped wind resource and permits are much
easier to procure, observers say.
"There are no wind resources available in California
like we have in Baja," Hardke confirms. "There
is a huge corridor along the mountain range that is still
Overall, Baja has 10,000 MW (and possibly even 20 GW)
of commercially viable wind-power potential, experts
say. So far, there are 70 MW in operation but this is
about to change as Cannon and several and the other utilities
break ground on over 2,000 MW of projects. While Mexico's
grid is expected to consume some of the production, the
majority will be exported to California, which has fallen
behind in its ambitious green agenda.
Apart from Cannon's project, Spain's Union Fenosa and
US-based Sempra Energy are developing an 800 MW park
while Mexico's Fuerza Eolica also plans to install 400
California is working to install as much as 5,000 MW
of wind generation by 2015 and as much as 8,000-12,000
MW by 2020, according Nancy Rader, executive director
of the American Wind Energy Association (AWEA).
Rader acknowledges some of this capacity could come
from Baja California as the projections are based on
in-state and out-of-state power stemming from inter-connection
grids. If the developers' predictions are right, the
upcoming 5,000 MW slated for Baja would mean California
could have nearly 10,000 MW of wind capacity in six years.
But Rader said it's too early to predict whether that
While California's difficult permit environment will
make Baja a more attractive production destination, "it's
not quite on the map yet," she notes, adding that
hardly any power purchase agreements have been signed
to import its power and that the international transmission
network needs to be widened. California is also planning
to install 6,000 MW of solar thermal power by 2012-15,
which could leave less room for wind permits, depending
on whether such targets are met.
Overall, California hopes to meet 33% of its energy
demand from renewables in ten years with as much as 12%
of this coming from wind. So far the state has 3,731
MW of installed wind power capacity.
But Hardke says Mexico's permit process is "a lot
more efficient and quicker" than California's where
multiple agencies have "overlapping and contradictory" requirements.
"California's legislature is working hard to streamline
the process and they ought to be applauded for it. Still,
the permitting process remains very laborious," Hardke
notes, adding that permit approvals can take years in
the US and just months in Mexico.
Individuals can also easily appeal permits in the U.S.,
while this is in uncommon in Mexico. Mexico doesn't provide
wind-production tax credits like the U.S. but it does
grant tax incentives to foreign suppliers including exemptions
on equipment imports and schemes to lower a project's
depreciation and amortization costs over its first ten
While selling tariffs are not as high as California's,
production costs are significantly lower, making projects
just as profitable in Mexico as in the U.S., Hardke says. "When
you take into account lower sale, transmission and construction
costs, the projects are just as economically viable," he
Hardke hopes Mexico will raise its future wind-power
incentives to make foreign projects more appealing.
Honduras and Nicaragua
Meanwhile, Gamesa is also building a wind park in other
windy Mexican region Oaxaca where developers are working
to install as much as 2,000 MW.
The company also wants to establish a Mexican manufacturing
site in the next 12 months, which could take the form
of a wind turbine and or tower factory, company officials
Gamesa is also beefing up in Central America. It recently
won a contract to sell turbines for Honduras' 105 MW
Cerro de Hula (south of the capital Tegucigalpa) wind
park, which the country boasts will the region's largest.
Honduras also plans to build a hydroelectric power plant
in Patuca this year as part of other undisclosed projects
to diversify its energy matrix.
Neighboring Nicaragua is also jumping into the renewables
bandwagon. This week it announced plans to install 600
MW worth of wind, hydroelectric, geothermic an wind energy