Background Articles and Features

Aura Solar III – Mexico’s First BESS

The Aura Solar III project, Mexico’s first utility-scale solar+storage facility, proved its high impact potential under a nascent and unclear regulatory framework. A fully project financed facility, Aura III takes advantage of the isolated nature of the electrical grid where it is located, a weak interconnection system, and extraordinary solar irradiation.

Developed by Gauss Energia, the Aura III project is located in La Paz, Baja California Sur (BCS), where the electrical grid has the distinguishing characteristic of being isolated from the national grid. In fact, BCS operates as a de facto electrical island. Power demand in the region fluctuates from 350 to 450 MW through winter and summer. Additionally, demand is highly sensitive to the fluctuations of the tourism sector, which makes the system vulnerable at peak load events when little headroom is available for fossil-fuel plant missteps. Historically, tourism has driven electrical demand, with a growth rate of approximately 3.5% per year.

Power generation in the region is primarily fossil-fuel based (mainly high-sulfur bunker fuel and diesel in peak load), holding the regional electricity sector liable for widespread pollution and its inherent health effects on nearby high-density urban centers. This makes Aura III, and its sibling Aura I, the sole current sources of renewable energy in the region through their combined 75 MWp installed capacity.

The project is a 32 MWp solar facility with an integrated 10 MW/5.5 MWh battery energy storage solution (BESS). Aura III’s 92,000 photovoltaic modules are sited on 50 hectares, where it produces 60 GWh/year since beginning operations in October 2018. The BESS is composed by lithium-ion (NMC) modules, with a lifetime of >3,000 cycles and a single-plant controller for both, PV and BESS systems.

Currently, the core functions of the BESS are primary frequency regulation (as much as 8 times the Grid Code requirement) and ramp-rate control (up/down buffer for unexpected weather changes). However, it has the capacity to carry out secondary frequency control, fast frequency response, and voltage control –ancillary services with very high value in the region. For instance, a battery-based frequency response outperforms a thermal-based one by far, given the former delivers 100% per second of installed capacity, while the latter can hardly achieve a 2% per second response, hence reducing the need for actual physical inertia within electricity grids.

In the mid-term, large-scale solar+storage projects are the most feasible strategy for a rapid boost of PV capacity in the grid. The storage related capex can be seamlessly integrated to the overall project, as long as its fundamentals are kept in line. In the case of Mexico, Grid Code compliance is expected to be further enforced by the ISO (Cenace), so we expect a BESS capex to be required even in projects interconnecting not only in BCS, but also to the national grid.

The current regulatory conditions may pose a challenging environment for developing standalone storage projects. Under this approach, storage assets have limited monetization opportunities, whereas several international markets have proven its high value by using them as virtual power lines (T&D infrastructure deferral) and as highly efficient ancillary services sources. To move forward on this track, further regulatory development will be required. Currently, the regulatory authorities do not seem particular attentive to this front.

In the short-run, current business opportunities in solar+storage may be at hand in distributed generation projects, which are still waiting for innovative solutions in the C&I market. For instance, given common frequency and voltage disturbances in the grid, some C&I customers may require fast-response BESS systems, while others would like to mitigate extremely high peak-hours costs. By working “behind-the-meter”, current regulatory uncertainty is tempered, and monetization opportunities may be more attainable.

In sum, the full potential of energy storage remains an untapped resource in Mexico. The Mexican energy market is a challenging business environment for storage solutions, notwithstanding the endemic underinvestment in transmission and the widespread node congestion across the country. Monetization of BESS systems remain aloof, and regulatory uncertainty is still a major hurdle for business developers who want to innovate in this market. However, at Gauss Energia, we remain optimistic in tapping some unattended markets and taking advantage of specific niches with very competitive and innovative solar+storage solutions.


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Author: Hector Olea, President and CEO of Gauss Energia, a business development firm based in Mexico City, and President of the Mexican Solar Association (Asolmex).


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