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Understanding Variability is Key to Mexican Wind Investment

​Vaisala Corporation                Press Release               February 25,2015

Vaisala study of Mexico shows significant performance fluctuations in 2014 and demonstrates importance of long-term climatology for wind investors

The 2014 Mexico Wind Performance Map, released today by Vaisala, a global leader in environmental and industrial measurement, delivers positive news for much of southern Mexico where above normal wind speeds boosted performance at many of the country's operating wind projects. Conversely, wind speeds below the long-term average in Mexico's interior negatively affected overall production at wind farms in that region.

These departures from mean wind speed highlight the importance of gaining a deep understanding of how much seasonal and year-to year variability is possible at a location prior to major investment. This is critical as Mexico looks to encourage a substantial influx of international capital to grow its domestic wind energy sector. Since wind speeds have a direct impact on wind production, an increase or decrease of 5% can have a 5-8% impact on power production, depending on the wind sensitivity of the region.

 

Last year, wind speeds were 5% below normal in Mexico's interior, from the U.S. border south to Mexico City, which had an adverse effect on the performance of a number of operating projects, including the 50MW Los Altos wind farm in Jalisco, owned by Grupo Dragón. Fortunately, southern Mexico, where the vast majority of the country's wind assets are located, did not follow the same trend - and the dense wind development area around coastal Oaxaca experienced wind speeds 5% higher than average.

The Oaxaca region - in particular the cluster of projects around Juchitán de Zaragoza - is of key strategic importance to international wind energy investors. Acciona has 550+MW of operating wind farms in Oaxaca and Iberdrola owns several other large projects in the vicinity. Oaxaca's Isthmus of Tehuantepec boasts one of the strongest wind resources in the country due to unique topography that creates a natural wind funnel through a break in the Sierra Madre mountain ranges to the North and South for air traveling from North America and the Caribbean.

However, while the meteorological reasons behind the strength of the wind resource in the region are well understood, it is important to note that strong climate anomalies, both positive and negative, such as those experienced in Mexico last year, are by no means isolated or uncommon events. Should Oaxaca experience a low wind year, a large number of operating assets would experience substantial dips in production and corresponding reductions in their owners' revenue streams.

Vaisala's study underlines a growing need for ongoing operational reconciliation to better understand the root causes behind performance fluctuations and better diversify a portfolio of assets. Through its wind performance analysis, Vaisala provides valuable insight for financiers and operators, by translating meteorological and forecasting data into energy investment decisions - enabling them to perform regional portfolio analysis and quickly view the effects of weather anomalies on both existing and proposed investments.

"The ongoing growth of the Mexican wind market, particularly in important regions like Oaxaca, is exciting," said Nic Wilson, Vaisala's Regional Segment Manager for the Americas.

"But given the financial impact of underperformance, it's essential that investors, developers, and operators fully understand the possibility and underlying reasons for both above or below normal performance. This information feeds directly into long-term production estimates and helps the industry formulate strategies to diversify production sites and prepare for and better safeguard itself against unanticipated and unavoidable drops in generation."

Vaisala is currently working with the U.S. Department of Energy on a $2.5 million, 3-year study to improve the reliability of wind forecasting in complex terrain. The results of which will make significant advancements to the weather models used to predict both long-term and short-term wind energy production as well as reduce the cost of grid integration.

For more information about the range of services offered by Vaisala to the renewable energy sector, please meet with us at Stand 514 at Mexico Windpower, February 25-27, or visit www.vaisala.com/energy.

Click here to download a copy of the 2014 Mexico Wind Performance Map 

For further information please contact:

Francesca Davidson
Energy Communications Expert, Vaisala
Phone: +1 206 708 8544
Email: francesca.davidson[at]vaisala.com


Vaisala Energy
Weather impacts the operations of energy providers all over the world. Energy customers use Vaisala products and services to measure, forecast, and integrate weather information into their operations to improve the effectiveness and reliability of electrical energy systems. In order to ensure efficient and continuous energy production, customers rely on Vaisala's real-time and historical lightning information to increase the reliability of the electrical transmission systems. Renewable energy developers utilize our wind resource assessment offering to understand the future performance of their investment. Renewable energy operators use our high accuracy forecasts to integrate their clean energy into the electrical grid efficiently.

About Vaisala
Vaisala is a global leader in environmental and industrial measurement. Building on 79 years of experience, Vaisala contributes to a better quality of life by providing a comprehensive range of innovative observation and measurement products and services for chosen weather-related and industrial markets. Headquartered in Finland, Vaisala employs approximately 1600 professionals worldwide and is listed on the NASDAQ OMX Helsinki stock exchange. www.vaisala.com www.twitter.com/VaisalaGroup