'Latin America has enormous potential for energy storage'

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Tuesday, February 27, 2018

The boom in the unconventional renewable energy market in Mexico has increasingly attracted the attention of major energy players, such as GE. Due to its consolidated international experience, the US company is not only looking at the opportunities in energy generation, but also in markets that grow in parallel with renewables, such as energy storage.

GE has plans to install five energy storage projects in Mexico, which could be the first commercial-scale battery systems in the country. GE's Latin America director for digital grid solutions, Rodrigo Salim, spoke to BNamericas about the projects.

BNamericas: How will the energy storage projects in Mexico work?

Salim: These projects are still under discussion and development. The idea is to install five battery systems to provide frequency regulation in regions of the Mexican electricity grid in which intermittent renewable plants, solar and wind, have a very high penetration. These systems will perform ancillary services, directly connected to renewable plants.

BNamericas: When does GE expect to start commercial operations? And is the planned investment still US$5mn per battery system?

Salim: Each of the five projects has its commercial start-up date, which varies between 2018 and 2020 according to the schedule. About the investment, the figures may vary according to the size of the system, which is still being discussed.

BNamericas: GE has already installed energy storage projects on several continents, but in South America this is still recent technology. What is the goal behind investing in energy storage in Mexico?

Salim: Currently, GE has more than 130MWh of battery-powered energy storage systems that are either in operation or in the installation and commissioning phase in the Americas, Europe, Asia and Africa. Among them, in Latin America [sic] there is a micro-network project of 2.5MWh of energy storage capacity in Guadeloupe and Martinique, which is now under construction on site. We also have in the United States a hybrid gas-fired thermal plant of 100MW capacity and 4MWh of storage. This is the only thermal power plant that is operating in the world today in which the energy production system is completely integrated with the storage control system of the batteries.

In Mexico, renewables growth is highly accelerated, which requires more flexibility of the power grid to deal with the intermittency of these energy sources. Battery systems are appropriate equipment to provide more controllability to the grid. Due to the expected price drop of batteries in the global market, this type of project will become even more viable in Latin American countries. Most local authorities are aware of this trend and have been working actively to enable the growth of energy storage projects in the region.

BNamericas: How does GE assess the potential of Latin American countries for this technology?

Salim: Latin America has enormous potential for energy storage. Some countries, such as Mexico and Chile, are leading this process given the intense substitution of fossil fuels by renewable sources of power. Other countries, such as Uruguay, Argentina and Brazil, should enter the same process soon. Although these countries have seen great growth of renewable energy, there is flexible generation capacity that ensures the grid is robust and secure to operate. In Central America and the Caribbean, we see growth of small electric systems, and not long from now renewables will be replacing large-scale thermal plants. We believe that energy storage systems will be fundamental to allow the expansion of renewables in these countries in the short term. One example is Jamaica, which is already investing in batteries. The growth of renewables in the region is very promising and, therefore, opportunities for storage will arise.

BNamericas: Is GE planning to install more battery-powered projects in Latin American countries in the coming years?

Salim: Definitely, yes. The decarbonizing of the global energy matrix is inevitable: society is asking for it, governments are globally engaged, and the technology is becoming more and more economically viable. Energy storage systems, and mainly batteries, are a very welcoming technology for this process, since it helps the expansion of renewable energy sources.