Creating solutions to connect distributed solar PV projects to the Clean Energy Certificate market in Mexico

From November 21 to 23, 2018 the Solar Energy Programme in Mexico that is funded by the German Climate and Technology Initiative (DKTI) invited representatives from the Mexican solar energy market, such as government institutions, solar PV developers, and researchers, to join the lab of tomorrow innovation workshop. The lab tackled the challenge: How might we generate business models that enable distributed solar PV projects to access the Clean Energy Certificates (CEL) market?

The challenge

Clean Energy Certificates (CEL for their Spanish initials) are titles that certify a given source of power generation as being a clean source (e.g. solar, wind, geothermal). The CEL system grants a CEL for each MWh of electricity produced by a generator using clean energy technologies.

Large generators of solar photovoltaic projects are already benefiting from additional income from the sale of CELs. Although the Mexican legislation also allows distributed clean generators - such as solar roof tops in residential and commerce sectors - to obtain and to sell their CELs in Wholesale Electricity Market (MEM), in practice there are no profitable business models that allow small generators to receive the benefit from the income of these potential CELs.

Thus, the challenge is to allow Distributed Solar Generators to access the CEL market, to increase profits and to boost their growth. This should result in an accelerated growth of distributed photovoltaic systems in Mexico.

Within this context, the first innovation workshop of lot extended brought together representatives from the Mexican solar energy market such as government institutions, solar PV developers, and researchers on the topic.

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Photo: SENER

The workshop

During the three-day-workshop, 30 participants worked together in teams guided by Design Thinking Coaches from Green Momentum. The coaches ensured that during all brainstorming activities, creative exercises and team efforts each participant was in the right mind-set that focussed on creating sustainable business model innovation.

The participants engaged in interdisciplinary teams that tackled the following sub-challenges:

  1. General lack of knowledge about Clean Energy Certificates, “CEL Addicts” Team

  2. High expenses associated with the certification, “Econometering” Team

  3. Amount and value of the awarded Clean Energy Certificates, “CELing” Team

  4. Requirements for being represented in the market of Clean Energy Certificates, “CoopSol” Team

  5. Efficiency of operation and maintenance processes, “Plug-in Training” Team

Understanding was the guiding theme of day 1: understanding the challenge, sub-challenges, as well as the other participants and their background. The exercises supported building empathy towards the potential end users in order to be able to generate tailor-made and user-centered solutions. Country director of GIZ Mexico Marita Brömmelmeier and Joscha Rosenbusch, Energy Cluster Coordinator, welcomed all participants and encouraged creativity, enthusiasm and synergies to construct the solutions and business models.

At the end of day 1, the creative development phase was initiated with a “Brain Writing” session during which each team developed a great number of innovative ideas that they focussed on during the next day. The perception of the participants about the general challenge was weighted with a mobile app to check if it would change eventually, and it did!

During day 2 the teams consolidated all collected ideas, specified them, abandoned some, and finally decided to target one of them. At the end of the day each team presented an analysis on the needed requirements and possible risks to show how feasible the developed idea is. Inputs inside and outside the teams were taken into account with the help of the facilitators and the workshop dynamics.

Latest on day 3 every team decided on one business idea they wanted to focus on to go one step further and to turn their ideas into concrete business models. An inspiring moment of the day formed the human simulation, a method that allowed the workshop participants to evaluate necessary requirements and framework conditions of their business idea. It enabled the teams to formulate a concrete economic business model, value proposition, and implementation roadmap.

The workshop closed with final presentations of all teams in the presence of high-level representatives of the national political and economic environment. Marita Brömmelmeier’s final remarks about the workshop outlined the very “intense and impressive work” and the flourish of “brilliant ideas” of each team.

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Photo: GIZ

The teams and business proposals

Let us introduce you to our Mexican teams:

(1) Due to the lack of knowledge about Clean Energy Certificates, the CEL Addicts team came up with the idea to create “Info CEL”, a digital platform with useful information about all the aspects related to the CEL market. The platform also functions as an interactive space between relevant actors like users, suppliers, distributors, market regulators, among others to communicate with each other.

CEL Addicts stated: “(Info CEL) is a platform that informs, conglomerates and generates interactions between the most relevant solar PV industry actors. We’ll improve the conditions for all these actors to access the CELs at the most efficient market price.”

(2) Analyzing the problem of high expenses associated with the certification of solar distributed generation, the Econometering team decided to create a methodology and a platform that helps with the quantification and definition of distributed solar energy in small scale.

Econometering team: “The project is a very profitable business model because it aims for low costs to enter the CEL market through our methodology and to help the end users.”

(3) The CELing team approached the sub-challenge related to the amount and value of the awarded Clean Energy Certificates. The main problem they identified was the lack of interaction and general knowledge on the topic. They proposed a platform that helps generators and installers of solar distributed energy to communicate with the right suppliers, financial institutions, and creditors.

CELing:By paying a commission, this platform will connect the different relevant actors and help any installer and generator to access the CEL market.

(4) Because of the heavy requirements for representation in the market of Clean Energy Certificates, the CoopSol team developed the idea to create a 360 agency to represent small scale PV projects. They hope to become the link between users, generators, suppliers, and other relevant institutions.

CoopSol:Something important about our project is that it doesn’t need any regulation change to be implemented, we can start it now if we want to.”

(5) Finally, the Plug-in Training team proposed the establishment of a certification institution of different technical capacities about operation and maintenance of solar PV installations. The current Mexican regulation does not oblige any certification from PV installers, causing bad practices and limiting the efficacy and potential of the solar technologies.

Plug-in Training: “People who put their money on PV installation have no capacity to decide who keeps their money, our institution offers them certainty.”

Now, the teams have the chance to apply for the test phase that will start in January 2019. During the test phase the working groups will further develop the concepts and verify the utility and feasibility of their business models. The proof of feasibility is an important condition for entering a potential pilot phase which aims at implementing the most promising business models on a small scale in the Mexican solar energy sector.

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Photo: GIZ