Future wind and solar energy projects in Mexico will be required to colocate battery energy storage systems equivalent to 30% of their capacity, a senior government official told the Senate on Tuesday.

“We’ve already changed the grid code and established that for each intermittent renewable generation plant, 30% will be batteries,” Jorge Islas, undersecretary for planning and energy transition, told the “National Strategic Plan: Perspectives and Strategies” Forum.

“The batteries will need to store energy equivalent to at least three hours of discharge,” he added.

With its energy storage market at a fledging stage, Mexico’s new regulation comes hot on the heels of a similar policy introduced in India. In late February, India’s Ministry of Power mandated renewable energy implementing agencies and state utilities demand two-hour-plus energy storage systems with at least 10% of the capacity of associated solar installations in future tenders.

Regulations introducing an energy storage mandate first appeared in China. Since 2022, policy mandates requiring solar and wind energy projects to include energy storage systems have been crucial in the acceleration of storage deployment in the world’s market. More than 20 provinces have issued such mandates and some provincial governments have upped their mandatory ratios for energy storage projects to 20%, up from 10% a couple of years ago.

These requirements have helped mitigate renewables curtailment in China. However, they have also increased operational costs for renewable energy projects, and many project owners have reported low utilization rates of their storage systems.

However, in a major policy shift announced in February and poised to go into effect on June 1, China redefined the way renewable energy plants in China are renumerated. It introduced contract for difference (CfD) auctions for renewable energy plants and removed its energy storage mandate, which has driven up to 75% of the nation’s demand to date.

Mexico’s energy mix

In his address to the Senate, Islas also said a total of 21.8 GW of new generation capacity will be connected to the grid in Mexico by 2030, with clean energy sources accounting for around 80%.

He presented two scenarios for the country’s energy transition though to 2030: a base-case scenario, where clean energy would make up 38% of the electricity mix up from the current 22%, and an ambitious scenario, aiming for 45%. The 2030 projected demand is estimated at 64,979 MW.

By 2028 alone, 1,673 MW of photovoltaic power will be installed in six colocated projects, alongside 574 MW of batteries, located primarily in the north of the country, Islas said.

It is estimated that 54% of new generation will be provided by state-owned entities. The remainder will come from the private sector, providing 6.4 GW of new generation capacity in the energy ministry’s base scenario, and up to 10 GW in a more ambitious scenario.

Islas said that the energy reforms, which went into effect earlier in March, provide a series of mechanisms for the private sector to participate in the electricity market.

The first option is for a private company to sell all the electricity produced by a renewable energy plant to Mexico’s state-owned utility CFE. Another option is for companies to create joint ventures with CFE to generate power, with a maximum 46% participation by the private sector. Finally, investors will also be able to install their own plants to sell electricity directly on the wholesale market or to a private company, Islas said.

Earlier in March, Mexico introduced administrative provisions regulating the integration of energy storage systems into the National Electric System. It also revealed that the incorporation of 8,412 MW of energy storage systems is planned for the 2024-2038 fiscal year.