+ Storage

At the second edition of Solar Power Mexico, special emphasis will be placed on the different types of energy storage technologies available, as these will play a revolutionary role in the adoption of photovoltaic systems on varying scales, thereby facilitating Mexico’s transition to renewable energies.

Towards a Renewable Energy Transition

1. Mexico is a solar power: Mexico is ideally positioned to make a rapid transition to renewable energies and become a global solar power. Ranked third worldwide in terms of solar irradiation, the country is also home to the world’s largest lithium deposit, has a mature photovoltaic industry and a pool of talented STEM graduates.

2. Advantages of storing energy: The development of energy storage technologies will disrupt the dynamics of the global energy market by doing away with the problem of intermittence, resulting in a more reliable, more diversified electricity grid, mitigating power cuts, reducing prices, and promoting energy self-sufficiency.

a) An industry that is growing exponentially: The sharp decline in the price of storage technologies—driven mainly by improvements in the efficiency of lithium ion batteries and increased consumption of electric vehicles—, coupled with technological progress in the development of materials, components and chemical processes, will lead to the exponential growth of the global energy storage industry in this decade.

b) New market of electricity prosumers: The marriage of photovoltaic and storage technologies will turn users into prosumers, i.e. que consumers who consume the electricity they produce themselves in the same place where it is consumed, which will translate into savings, greater efficiency and the democratization of energy.

C) Reliability and reduced prices: The flexibility afforded by energy storage technologies could help the sector realign periods of supply and demand, resulting in a more reliable, more resilient grid, better quality and lower cost electricity, more profits for users, and greater investment in infrastructure.

d) Paris Agreement goals: Energy storage technologies will be essential to reducing the greenhouse gas emissions associated with transportation and power generation in the short term, enabling us to comply with the 30% reduction in global emissions required to achieve the Paris Agreement goal of keeping the planet’s temperature below 2°C.

3. Energy storage value chain in Mexico: To capitalize on our strategic geographic location and natural resources, we need to create a four-helix platform—government, the private sector, academia and international organizations (GIZ, WEF)—, with a view to setting up a value chain for energy storage technologies in Mexico that will secure our transition to renewable energies and energy independence, and create thousands of well-paid “green jobs” in the process.

4. Smart electricity grid: To ensure our transition to renewable energies is viable on a large scale, we need to promote the creation of a smart electricity grid that is in synch with our new digital reality.

Fortunately, technological breakthroughs in the areas of artificial intelligence, blockchain and big data are producing aggregate solutions and innovative business models in the energy distribution segment.

5. Fusion between Industry 4.0 technologies and electric vehicles: Storage technologies will develop on a par with smart electricity grids, allowing for the creation of a new, renewable system that will power our industries, companies, homes, vehicles and smart devices with clean, unlimited energy.

The added value of energy storage

Due to their unique physical and operating characteristics, energy storage systems can provide a wide range of services throughout the energy value chain:

Operating advantages

Increased reliability, flexibility and functionality of the electricity grid.

Solution to the problem of intermittence, because storage allows for the future use of power.

Balancing out of sudden peaks in supply and demand.

Greater reliability because power can be supplied without the cost, inefficiencies and pollution of plants powered by fossil fuels.

Multiple value flows derived from participation in day-ahead and real-time power markets.

Greater energy security due to the mitigation of risks associated with dependence on fossil fuels.

Capacity to reinstate power supplies following interruptions caused by natural disasters or faults in the grid.

Economic advantages

Empowerment

of consumers by allowing them to play a more active role in their consumption and generation decisions, and offering them an additional means of reducing their electricity bills.

Reduced costs

and improved resilience capacity of power for commercial, industrial and residential consumers.

Saves

the final user financial losses due to irregularities in the electricity service.

Reduced

costs associated with upgrades in transmission and distribution infrastructure.

A new industry

that can provide additional economic benefits via the creation of a value chain (research, development, manufacturing, installation, etc.)

Social advantages

Storage technologies have the greatest potential to support the transition to renewable energies,

combat climate change and help us comply with the Paris Agreement.

They generate no direct emissions

and have no impact on air quality in the areas where they are located.

Are essential to providing

people in remote rural areas with access to electricity.

And contribute to energy security

by diversifying energy sources and reducing dependence on fossil fuels.

Mexico and the energy storage value chain

Mexico is a solar power: 85% of the country is located within the “solar belt”, which receives annual daily solar irradiation of between 4.4 and 6.3 kWh/m², meaning Mexico can generate twice as much photovoltaic energy as countries like Germany with the same installed capacity.
We are one of the countries best positioned to make the transition to renewable energies. Ranked third worldwide in terms of solar irradiation, Mexico boasts the world’s largest lithium deposit, a mature photovoltaic industry and talented STEM graduates. In other words, we have the capacity to be competitive throughout the entire renewable energies value chain.
Due to the low cost of photovoltaic and wind energy in Mexico, storage systems are a means of meeting growing demand for electricity without a proportional hike in prices, while bringing us closer to compliance with the targets stipulated in the Paris Agreement.
In the case of countries like Mexico that have competitive component industries, participating in the energy storage value chain opens up attractive opportunities, such as:
- Creation of jobs in the manufacture, installation and operation of energy storage systems.
- Development of new industrial structures.
- Export opportunities for the storage and components industries.
- R&D to boost the industry’s competitiveness.
- Reliable electricity supplies.
- Benefits for other directly related industries, such as electric vehicles, Industry 4.0, software, telecommunications and finances.
The de-carbonization of the electricity sector is an unstoppable trend worldwide. Energy efficiency and renewable energies will be the strategic pillars for de-carbonization, particularly in countries like Mexico, whose renewable energy industries have huge potential.
Battery storage systems are an interesting alternative for island systems like Baja California Sur, where the grid is powered by expensive, highly polluting fossil fuels that are transported to the peninsula, and systems that are not connected to the central grid, like Yucatán.

The energy storage industry

The electricity industry is experiencing a rapid transition. The declining cost of distributed solar generation, combined with commitments to increase the amount of electricity generated from clean sources with a view to reducing pollution caused by power plants, is changing the way electricity is produced.
Storage systems will revolutionize the solar energy industry. In the decade ahead, these technologies will grow exponentially and hand-in-hand, resulting in the rapid adoption of solar energy systems of varying scales, the realignment of periods of supply and demand, improved grid reliability, better quality electricity services, reduced prices and new business opportunities.
The sharp decline in the cost of storage technologies in the last decade and projections of continued price reductions are driving the adoption of these systems.
Energy storage systems are the only technology potentially capable of addressing all the integration challenges associated with electricity generation, such as variability, uncertainty, specific location, non-synchronic nature and the low-capacity factor.
A unique feature of battery storage technologies is that they can be installed near generation centers, helping mitigate or defer the need to upgrade transmission lines and the distribution system.
Storage technologies have several attributes, such as rapid response times and net-zero emissions, all of which can help improve the flexibility of the grid.
To the extent that renewable energy costs continue to decline, distributed photovoltaic and wind energy are becoming feasible alternatives to replace expensive and polluting diesel.
Several studies indicate that the battery storage value chain will generate profits of $300 billion USD, attract global investment of $440 billion USD and create 10 million well-paid “green jobs” worldwide by 2030.
Transportation and energy consumption will change drastically in the next two decades. Storage technologies will enable us to decarbonize these sectors, reducing global emissions by 30% and bringing us one step closer to achieving the main goal of the Paris Agreement, which is to maintain the planet’s temperature below 2°C.
Storage technologies also have untold social benefits, not least the potential to provide 600 million people who currently don’t have access to electricity or who live in remote communities where electricity services are deficient with access to this service, thereby fostering the democratization of energy worldwide.
The marriage of renewable energies and storage technologies will be central to the energy transition and to building a future in which most of our power is obtained from unlimited clean local sources.

Number facts

Mexico is guaranteed to play a predominant role in the energy storage industry following the discovery of the world’s largest lithium deposit in Bacadéhuachi, Sonora. Reserves are calculated at 243.8 million tons.
In the medium term, the Sonora mine could produce 35,000 tons a year, positioning Mexico as one of the world’s leading lithium producers.
Demand for electricity is growing rapidly in Mexico. The International Energy Agency projects annual demand will rise from 300 to 470 TWh between now and 2029.
According to a study by BloombergNEF, between 2010 and 2018, the price of lithium ion batteries fell 87% to $156 USD /kWh, while sales increased 232% in 2019 alone. Prices are expected to drop to $87 USD/kWh by 2025 and to $62 USD/kWh by 2030.
The installed capacity of storage systems will continue to grow exponentially, climbing from 9GW/17GWh in 2018 to 1,095GW/2,850GWh in 2040, according to projections by BloombergNEF.

The World Economic Forum’s Global Battery Alliance predicts demand for batteries will increase at an annual rate of 25% through 2030, reaching an installed capacity of 2,600 GWh and resulting in:
- Production profits of $300 billion USD.
- Global investment of $440 billion USD throughout the entire value chain.
- The creation of 10 million well-paid “green jobs” worldwide, over 50% of which will be in emerging economies.
- A 30% reduction in greenhouse gas emissions associated with transportation and power generation—essential if we are to achieve the Paris Agreement goal of maintaining the planet’s temperature below 2°C.
- Services for 600 million people who currently don’t have access to electricity.

BloombergNEF estimates sales of electric vehicles will reach 10 million by 2025, rising to 28 million in 2030 and 56 million by 2040, pushing demand for lithium ion batteries up to 1,748 GWH a year by 2030.
By 2050, an estimated 14 TWh produced by batteries installed on electric vehicles could be available to provide grid services. (IRENA)