US, Mexican border states seek cooperation on renewables projects, including financing

Governors of four US border states and six Mexican border states on August 15 agreed to collaborate on a US-Mexico renewable energy program that includes identifying financing opportunities for at least one renewable project by year end.

Several Mexican states have the potential for developing wind, solar, and some geothermal resources, and they are interested, said California Energy Commission commissioner Jim Boyd. "We're trying to broker that interest into identifying projects."

According to developers' estimates the northern-most area of Baja California has the potential for 4,000 MW to 5,000 MW of wind power.

For instance, both Sempra Energy and Union Fenosa have expressed interest in extending current projects under development to 1,000 MW each.

Within the next year, Boyd said, the energy working group needs to meet deadlines for infrastructure information and for working with North American Development Bank to finance projects in Mexico.

The US states signing the joint declaration were Arizona, California, New Mexico and Texas.

The Mexican states signing were Baja California, Chihuahua, Coahuila, Nuevo Leon, Sonora, and Tamaulipas.

The states in Mexico lack resources, said Boyd, but have worked hard to create energy agencies.

For example, the state of Baja California created its energy commission last November and has promoted its desire for a memorandum of understanding to develop renewable projects with California, said Boyd.

In an interview, David Munoz Andrade, director of the Baja California Energy Commission, said the commission would soon sign a construction contract for a $40 million, 23.8-MW hydro project and is planning a 10-MW wind project that could be expanded to 90 MW.

That public/private partnership project is being coordinated with Mexico's national utility, Comision Federal de Electricidad, and with the country's secretary of energy, he said.

The commission is seeking financing with the World Bank. Revenues from the projects will be invested in community energy savings programs.

The Baja California Energy Commission was formed with an initial $10 million designated for projects.

The state is eager to sell power into California's market, said Munoz. The La Rumorosa area in Baja southeast of San Diego County has proven wind resources, he said.

In addition to Sempra Energy's 250-MW wind project announced in June 2007, enXco and Fenosa hold leases in the area, and Iberdrola has expressed an interest in developing a project there, Munoz said.

The MOU between Baja California and California is still being finalized. Its introduction at the August 15 meeting caused a minor stir because the governors of the two states had not yet seen it.

However, the representatives attending the meeting agreed its goal was consistent with goals of the broader agreement.

Boyd explained in a later interview that the MOU has to be done with the knowledge of the governors of both Baja California and California.

He and his representatives and California Governor Arnold Schwarzenegger's representatives are now working to create such an agreement to call for delivering renewable resources across the border and to lay out the issues involved.

Boyd said Mexican nationalism has created some difficulty on cross-border energy policy.

While states across the US-Mexico border have 25 years' experience working together, issues at Mexico's federal level have revolved around the perception that "people north of the border want power without the emissions that go with it," said Boyd.

However, the Mexican states have shown more willingness to develop resources in their regions as long as environmental rules are observed, but they lack financial resources.

The federal government has most of the power so "we will also engage with the Mexican federal agencies," Boyd said.

Created: August 21, 2008

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