POWER January 2017 - 20

ergy losses in the network, as well as to
increase fuel optimization to help slash
electricity rates.
As set out, the reform appeared complicated
and ambitious, he added. SENER
sought transparency of market demands,
calling for authorities to invest in technology
to improve databases, metering,
and accounting. It also assumed that
competition would drive more efficient
practices. For instance, " If true costs are
identified, prices and rates would be set
without distortions, " said Hernández.
SENER envisioned a flexible market that
would spur new services " tailored to the
needs of the consumer, " foster new generation
technologies and financial products,
as well as attract and develop local human
capital and development. This was critical to
attract investment-both domestic and foreign-necessary
to deploy the 57 GW of generation
capacity that SENER projects Mexico
will need through 2030. Such development
will cost up to $131.6 billion between now
and 2030, SENER estimates, including $98.7
billion for generation and $15 billion for
transmission lines, which for the first time
will be allowed with private financing.
Another mammoth challenge SENER
faced was transforming CFE-a vertically
integrated state agency that retained a
historic monopoly on the power industrial
chain, from generation to delivery-into
a profit-making competitor within the
market. In January 2016, SENER officially
unbundled CFE by function: generation,
transmission, distribution, basic supply,
commercialization, and procurement of
primary inputs. It also established five different
generation companies (and another
subsidiary to administer power purchase
agreement contracts) under CFE, as well
as 16 distribution units and a transmission
subsidiary, though these will remain under
state control (Figure 3). A key aim was to
make CFE " profitable, but have it not impede
a profitable market, " said Hernández.
" Now we are past the point of return, "
he said. The reforms are well underway,
and the country is seeing some unprecedented
changes. Before the reform, Mexico's
grid was patchy. While 98.5% of the
national population is electrified, 1.8 million
Mexicans still lack access to power.
Today, the grid has 65.4 GW of generation
capacity, nearly 35.6% of which is combined
cycle natural gas. About 19.7% is
fuel oil and gas steam capacity, and about
9% is from coal.
However, 26% is now from clean energy,
including hydro, wind, geothermal,
solar, nuclear, and biomass. That puts a
country that is rich in solar, wind, and
20
geothermal resources closer to its clean
energy capacity goals of 35% in 2024,
40% in 2035, and 50% in 2050. Forecasts
are astounding: By 2030, SENER projects
that Mexico will have effectively tripled
its clean energy capacity and increased its
combined cycle gas-fired capacity by 75%.
Solar has been particularly successful in
Mexico's auctions, winning 74% of contracts
in the first and 54% in the second,
followed closely by wind power. " Solar was
practically nonexistent in Mexico before
the auctions, " Hernández noted.
The challenge that remains is to create
supporting infrastructure, including
a natural gas market. " The 2015 to 2019
five-year expansion of the natural gas
transportation system will capitalize on
our strategic position through 13 projects, "
he said. Plans are also underway to
complete three high-voltage direct-current
transmission lines and a number of
reinforcements over the next five years to
reduce congestion. " Through investment
and expansion, the transmission network
will guarantee the delivery of cheap and
clean resources to the regions of high demand, "
Hernández said.
One area of focus continues to be crossborder
interconnections with the U.S.,
Hernández noted, though he did not address
how plans may change with the incoming
Trump administration, which has
promised to reassess existing trade policies.
Currently, Mexico-U.S. trade occurs in
two main regions: Baja California/California
and Tamaulipas-Coahuila/Texas, with
five interconnections of 1,096 MW in permanent
operation and eight interconnections
(788 MW) for emergency backup. As
Mexico evaluates participation in the California
ISO imbalance market, SENER projects
that new interconnections of 6,000
MW could produce an annual net savings
of between $125 million to $300 million.
Readying for New HVDC
Line, U.S. Lags Behind
Rest of World
The U.S. may be getting its first overhead
600-kV high-voltage direct-current (HVDC)
line in more than 20 years. Developers are
advancing the Plains and Eastern Clean
Line, a 720-mile (1,150-kilometer [km])
project that could deliver 4 GW of renewable
power from the Oklahoma Panhandle
region to states in the Southeast. The
project is spearheaded by Clean Line Energy
and GE Energy Connections, though
the U.S. Energy Department is also a participant.
Construction on the line could
begin in the second half of 2017.
www.powermag.com
4. A timeline. ABB in June 2016 completed
an upgrade of the Celilo converter station
in Oregon (shown here), a facility that is
integral to the Pacific DC Intertie. The intertie
became the first major high-voltage directcurrent
link in U.S. transmission history when
it was commissioned by ABB in 1970. The line
extends 845 miles from the Pacific Northwest
to the greater Los Angeles area. Courtesy:
ABB
The project is a big deal in the U.S.,
which has 20 HVDC transmission facilities,
because it would be its most advanced. The
nation's most lauded HVDC project is the
500-kV Pacific DC Intertie, which has been
in operation for over 30 years (Figure 4).
HVDC is a system that interconnects two
alternating-current (AC) networks, converting
AC voltage to DC voltage and vice versa.
Ultra-HVDC (UHVDC) lines can operate at
voltages of up to 800 kV, enabling bulk
transport of power over longer distances.
One much-emphasized benefit is that HVDC
systems have lower losses than AC systems,
which makes them more economical. In addition,
the use of insulated cables along
with HVDC in submarine and underground
applications allows more power to be transmitted
across long water crossings.
According to GE, the need for HVDC
lines is becoming increasingly prominent
globally as the utility environment becomes
more complex. Utilities are managing
new challenges such as increasing
demand for electricity, connection of
remote generation, growth of distant
offshore wind, integration of variable renewable
generation, the need for security
of supply, increasing costs for land,
and permits for new right-of-way access,
which are increasingly difficult to obtain.
Yet the U.S. lags far behind a number
of countries in installations, if operating
voltage and capacity are compared. China
leads the world's efforts in advanced
HVDC installations. Sixty years ago, ABB
pioneered the technology in the world's
first commercial HVDC link, a 150-kV line
that today transmits 320 MW at a distance
of nearly 100 km-from Västervik, on the
east coast of mainland Sweden to Ygne
on the island of Gotland. In 2010, State
POWER | January 2017
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POWER January 2017

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