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Large scale electricity storage can accelerate Mexico’s green transition, a study from the Danish Energy Agency and Mexico’s INECC finds.

The study finds that large scale electricity storage could contribute to a carbon emission reduction of 63 million tons in 2050 compared to a scenario without storage. This would correspond to a 45% carbon emission reduction from the Mexican energy system by 2050.

In particular, solar energy in combination with li-ion battery systems has the potential to deliver large emission reductions in the country. The potential is estimated at 194GW in 2050 with storage as opposed to 95GW without storage. Today, solar energy in Mexico is only 5.5GW.

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The study was undertaken as part of a Danish-Mexican cooperation by the Danish Energy Agency and the National Institute of Ecology and Climate Change (INECC) in Mexico.

“The Danish-Mexican energy cooperation has since 2014 focused on the green transition in Mexico. By sharing Danish experiences, the Danish climate effort can be multiplied, as the new study shows,” says Janni Torp Kjærgaard, deputy director general of the Danish Energy Agency.

“A reduction of 63 million tons is equivalent to almost double the current annual Danish CO2 emissions from energy consumption.”

The study reviewed seven selected storage technologies – pumped hydro, lithium-ion batteries, lead acid batteries, sodium-sulphur (NaS) batteries, vanadium redox flow batteries, molten salt and compressed air – considering their competitiveness on the services they provide.

Comparing the data for these technologies on the long term shows that Li-ion batteries are expected to be among the cheapest technologies for consuming excess renewable energy and providing it during low power supply. This is closely followed by NaS batteries, with compressed air the most costly in terms of projected levelised cost by 2050.

“The study showcases how new technologies can help accelerate a cost-efficient green transition and reach the Mexican targets under the Paris Agreement.” says Dr Claudia Octaviano Villasana, general coordinator of climate change mitigation at INECC.

Regulatory barriers

The study also identified several barriers to investment in storage in Mexico if the full mitigation potential is to be achieved.

Grid tariff design currently encumbers costs on stored energy both for charging and discharging.

Market barriers include inadequate requirements or lack of definitions for storage to deliver capacity and ancillary services.

There also is a high financial risk caused by short-term markets for services provided by storage as compared to longer term markets for conventional generation technologies.