Mexico has already developed substantial large hydro and geothermal resources. However, without policy changes and government-sponsored financial incentives, unconventional renewable sources are taking the equivalent of baby steps.
"Renewables" is on the tongue of every Mexican politician and business leader; however, talk hasn’t yet transformed into action. The energy mix remains dominated by natural gas and petrol (gasoline), and there has been no dramatic increase in the use of renewables. Alberto Escofet, formerly director general at the Comisión Federal de Electricidad (CFE), argues that renewables are very important but that it is difficult to expect countries such as Mexico to spend excess resources on what many still consider to be a luxury. While the U.S. and Europe may have the wealth to do this, Mexico cannot afford the penalty that more expensive energy would have on its industry.
Having said this, many in the sector do see renewables as the future. Giovanni Aloi, director general of GE Energy Mexico, argues that renewables are an area that his company can profit from and a key strategic aim for GE Energy: "GE Energy Mexico intends to invest considerably in building a Class 1 turbine factory in Mexico, aimed at serving both Mexico and exporting the wind turbines overseas. We are also working on wind turbine technology and trying to increase the efficiency."
However, apart from this investment by GE Energy, Mexico has many projects in development but few actually operational. There is certainly potential in Mexico, especially for wind energy, but various factors — most noticeably the lack of specific subsidies for renewables and the important obligation of the CFE to supply energy at the cheapest price, which prices out the majority of renewable energy options — hinder development.
Luis D’Acosta is director general of SEL Mexico (Schweitzer Engineering Laboratories), a multinational company that has developed complete product lines for the protection, control, automation, measurement, and monitoring of electrical power systems. He says: "Renewables aren’t necessarily quite there yet. At the moment we are focusing our energy on our expansion to the U.S. and the services we offer to the CFE, but we expect [renewables] to be a growth area."
Alejandro Ramirez, director general of Geo-Productos Mexicanos, a construction and engineering company, argues that there are three main drivers for the growth of renewables: the public, the government, and the opinion makers. The increasing interest of the public in the renewables sector will drive the two other factors and lead to a growth in renewables, he believes.
Government Aid for Renewables and Energy Efficiency
So far, there is no price subsidy, feed-in tariff, or other such interventionist help from the Mexican government to encourage renewable energy generation. Some elements of the government are, however, active in promoting renewable projects.
Francisco Xavier Salazar Diez de Sollano, president of the Comisión Reguladora de Energía (CRE), a regulator of the private electricity and gas industry, mentions that the CRE has changed certain price signals for renewable projects so that they can compete better with conventional fuels: "So what this new legislation did is to take into account the externalities of different technologies. By taking into account that fossil fuels have an impact on the environment (they produce greenhouse gases), they should cost more than the mere accounting cost which is currently attached to them. Renewable energies on the other hand, offer price stability, which is a positive externality. The idea is then to take into account the real economic cost of generating electricity from these sources, not only the accounting cost, but the social cost. If you take into account these factors, of course renewable energy is very competitive. These kinds of assessments are to be performed by the ministry. Based on the planning of the sector this will enable more renewable projects."
In addition to the CRE, Fideicomiso para el Ahorro de Energía Electrica (FIDE), an innovative trusteeship for energy saving and efficiency, is very active in bringing together the private and the public sector. Its purview extends to helping small and midsize enterprises increase energy efficiency by developing an energy efficiency culture in an oil-rich country.
Yolanda Valladares Valle, general director of FIDE and formerly social development manager for Petróleos Mexicanos (PEMEX), explains: "With current financial conditions our message of energy efficiency is even more relevant. Energy efficiency can save companies money, save resources, as well as [have] beneficial effects on the environment." She also highlights that reducing carbon emissions means more than just working on renewable energy. It also includes using other resources more efficiently.
Arturo Echeverria, president of Rolan Aislantes Minerales, a mineral fiber producer working both with the CFE and with PEMEX, concurs. He argues that sustainability and reduction in consumption could work hand in hand with investment in alternative generation sources, but he fears that the government is more focused on media-friendly wind farms (Figure 1) than insulation and other efforts that could reduce demand.
1. Independent wind. The CFE is initiating wind projects Oaxaca II, III, and IV in La Venta park, which will have a combined generating capacity of 304.2 MW, generating average annual net electricity of 1,129.29 GWh. They are operated under the independent power producer model. The Spanish company Acciona was awarded the three new projects, for presenting the lowest cost per kilowatt-hour compared with its competitors. Courtesy: CFE
He also points out that the tariffs (rates) are working directly against government policy by encouraging higher usage: "The CFE is promoting energy consumption, whereas other countries, and even our own current administration, is talking about savings in consumption." He argues that this spending on subsidies for electricity is bankrupting the government and working directly against government sustainability policies.
Rodolfo Flores, marketing and product manager for Lumisistemas (owned by Philips) also compliments the work of FIDE as important for the country but points out that the minimum wage in Mexico is 56 pesos ($4) per day, and Mexico has considerable problems with poverty. It is very difficult to persuade such workers to invest even a day’s wages on an efficient light bulb when they need to sleep, eat, and live off that money.
Email
Comments
Print
Reuse
