In early December, officials from Grupotec and the Mexican government laid the foundation stone for a new solar PV project near La Paz at the southern end of Baja California. The Grupotec 1 will represent an investment of US$80 million, and feature 97,000 solar PV modules on an area of 44 hectares. The project will also incorporate an 11 MW battery storage system.

Present at the groundbreaking were officials from Mexican national utility CFE, with which the project has a 20-year power purchase agreement (PPA) through the Small Power Producer Program. Under this program CFE will purchase electricity from the plant at a fluctuating price based on local node prices.

This means that the project will operate on a basis similar to merchant power projects, despite holding a power purchase agreement. Another large PV project built near La Paz, the Aura Solar 1, was the first large “quasi-merchant” solar project in the world and also holds a PPA through the Small Power Producer program.

Grupotec expects the plant to meet 40-42% of the electricity needs of La Paz, a city of 215,000 persons and the capital of Baja California Sur. When the electricity supplied by the 39 MW Aura Solar 1 is included, solar is expected to meet 100% of the electricity demand of La Paz.

The southern end of Baja California has an isolated grid, and prior to the Aura Solar 1 the region was entirely dependent upon imported fossil fuels for its electricity generation. This resulted in very high and volatile prices.

It is rumored that the Aura Solar 1 was badly damaged during Hurricane Odile in September 2014, however developer Gauss Energía did not respond to pv magazine questions regarding the status of the plant. Additionally, the inverter stations at Aura Solar 1 caught on fire in April 2014, but since have been repaired.