Mexico is poised to become a major smart grid market over the next decade. Zpryme's research indicates that Mexico's smart grid technology market will grow from $1.23 billion in 2012 to $7.42 billion in 2020, according to research from Zpryme, at a compound annual growth rate (CAGR) of 25 percent and representing an attractive regional opportunity in a large market poised for aggressive investment to modernize their power grid.
The 25 percent CAGR indicates that Mexico is poised for a long cycle of sustained growth. This is a healthy environment for centralized planning, and if the levers for investment and policy change can keep pace with the growing need for energy, Mexico will serve as a model for other countries to follow for rapid and environmentally responsible modernization efforts, according to Zpryme.
Currently, however, Mexico faces problems such as power outages, electrical theft, and poor energy infrastructure, not unlike many Latin American countries, providing an unprecedented opportunity for Mexico to improve both functionally and economically with smart grid technology.
Currently, Mexico's electricity market is federally owned, with the Federal Electricity Commission (Comisión Federal de Electricidad or CFE) essentially controlling the whole sector. This level of control has stifled innovation to date, but Zpryme believes things will change with broader participation coming from the private sector.
Private power generation in Mexico is done on a self-supply basis, where players can only generate electricity for their own consumption, and can only sell excess electricity back to CFE. As modernization advances, private power producers will have new opportunities, thus bringing more secondary buyers into the market for smart grid technologies.
Zpryme concludes that these and other positive opportunities will drive overall growth for Mexico due to the confluence of several trends, including forward-thinking energy policies designed to raise the country's international competitiveness which entail the integration of renewable energy,energy efficiency and sustainability goals into broader programs driven by smart grid initiatives.
Initially, smart grid investment will be led by AMI, and as these deployments create a foundation for modernization, new growth will be driven by distributed automation and grid scale energy storage. Similar patterns are likely to unfold across Latin America, Zpryme predicts.
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| Credit: Zpryme |
Currently, however, Mexico faces problems such as power outages, electrical theft, and poor energy infrastructure, not unlike many Latin American countries, providing an unprecedented opportunity for Mexico to improve both functionally and economically with smart grid technology.
Currently, Mexico's electricity market is federally owned, with the Federal Electricity Commission (Comisión Federal de Electricidad or CFE) essentially controlling the whole sector. This level of control has stifled innovation to date, but Zpryme believes things will change with broader participation coming from the private sector.
Private power generation in Mexico is done on a self-supply basis, where players can only generate electricity for their own consumption, and can only sell excess electricity back to CFE. As modernization advances, private power producers will have new opportunities, thus bringing more secondary buyers into the market for smart grid technologies.
Zpryme concludes that these and other positive opportunities will drive overall growth for Mexico due to the confluence of several trends, including forward-thinking energy policies designed to raise the country's international competitiveness which entail the integration of renewable energy,
Initially, smart grid investment will be led by AMI, and as these deployments create a foundation for modernization, new growth will be driven by distributed automation and grid scale energy storage. Similar patterns are likely to unfold across Latin America, Zpryme predicts.
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