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Complex regulations push wind developers to Mexico

June 2, 2010


Thanks to complex state regulations and lower costs, California could start getting its power from south of the border.
Half a dozen companies in Mexico want to provide wind-generated power to California.  A number of projects, including one with an indigenous community in Baja California Norte, Mexico and neighboring landowners to build 1 to 1.5 gigawatts of wind-power projects on 263 square miles of land.Ideally, the plant will be built in phases from 2013 to 2016.
Once generated, the power will be delivered to the large, lucrative California renewable-energy market just 70 miles to the north.
But developers going international face some other risks too, like losing any U.S. federal tax credits and having a whole new set of regulators to deal with.  So why so much interest?
Well, even though wind remains one of the world’s largest and fastest-growing sources of renewable power, and the DOE has suggested that wind could supply 20% of the nation’s total electricity needs, regulatory hurdles are often costly and extremely difficult to navigate in many US states.
California, for example, ranks 17th in the nation for wind, and has a progressive mandate to get 33% of its power from renewable sources by 2020.  But reaching that goal is a beaurocratic nightmare for solar developers. So, some developers are looking outside the state’s borders to build California power plants in order to avoid dealing with the state’s Fish and Game Department.
Some are going to neighboring Arizona, but others are looking south, to Baja, Mexico, where some say that there is enough wind to the entire state of California.
Providing energy is not a new issue between the borders. The United States and Mexico have traded electricity since 1905, when privately owned utilities in remote towns on both sides of the border helped meet one another’s needs with a few interconnected low-voltage lines. Today, Mexico has nine transmission interconnections with the United States.
However, there are some big hitches. “Developing a solar or wind project costs three times as much in California than in any other state in the U.S. So that is an advantage Baja California has. The disadvantages are that developers do not get any of the Obama Administration’s tax credits, and the environmental and cultural impacts that the installation of wind-energy infrastructure will have on the region.
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