September 13, 2013

Wind prospectors delve into Mexico

By Morgan Lee | San Diego Union-Tribune | Sept. 12, 2013 |

A wind energy company with ties to San Diego has brokered a deal to supply electricity at two Volkswagen auto plants in Mexico, highlighting opportunities for renewable energy prospectors there.

Baja California-headquartered Mexico Power Group, which spun off from San Diego-based Cannon Power Group in 2011, signed an agreement this month to supply wind-generated electricity to Volkwagen’s decades-old assembly plant in Puebla and and a VW engine manufacturing facility in Guanajuato state.

The source of the electricity will be a new wind farm hundreds of miles away in Zacatecas state. The arrangement takes advantage of generous transmission rates for renewable energy projects introduced by Mexico in 2010, said John Prock, CEO of Mexico Power Group on Wednesday.

“For renewables basically we can generate electricity in rural parts of Mexico and wheel that power – transmit it – across the street or across the country for the same price,” he said. “So, a big incentive for renewables.”

The same regulations help reconcile the variable power of wind turbines, that fluctuate with the weather, with the steady demands of an auto assembly line.

“We supply a set number of gigawatt hours into the grid and they have a year to take it out,” Prock said.

The deal fit neatly into Volkswagen initiative to reduce the carbon footprint of global operations, and represents a significant milestone for Mexico Power Group, the Tijuana based company in the midst of developing a large wind power plant along the high central ridge of Baja California just south of the U.S. border outside the town of La Rumerosa, among other projects.

It also burnishes Mexico’s allure among wind developers, at the same time the country’s president has proposed opening the electricity sector to greater outside investment.

“I think the wind energy industry is now recognizing Mexico as the next global powerhouse in wind energy development,” said Gary Hardke, president of Cannon Power Group, citing the country’s rapidly increasing demand for electrical generation and ambitious policy goals for renewable energy. “It’s very clear that Mexico is quite serious about having renewables playing a significant role in the electricity industry on a going forward basis.”

Hardke foresees other wind developers that have focused on wind resources in the southern Mexican state of Oaxaca exploring vast tracts in other regions.

Cannon, with employs about 25 people out its Del Mar offices, is likely to collaborate with Mexico Power Group in completing the Zacatecas wind farm, he said.

The two companies are each co-owned by Gerald Monkhouse, who founded Cannon in 1979 and now resides in Puerto Vallarta. Over the decades, Cannon has built and operated more than 30 utility-scale wind facilities, including one of the largest U.S. wind farms, located along the Columbia River in Washington state.

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