Mexico could be a renewable energy champion yet wind and solar make up only about ten percent of the country's electricity mix. Rebecca Bertram has taken a closer look to find out why Mexico's energy transition is lagging behind. Contact online >>
Mexico could be a renewable energy champion yet wind and solar make up only about ten percent of the country''s electricity mix. Rebecca Bertram has taken a closer look to find out why Mexico''s energy transition is lagging behind.
Mexico is a country blessed with abundant natural resources and a rapidly growing economy. Yet given its economic strength and vast resources in solar and wind energy, the country is lagging behind in its efforts to transition away from fossil fuels. Mexico is clinging to its traditionally close ties with the fossil fuel industry instead of paving the way to become a global leader in renewable energy generation. This comes at a high cost for its economy, environment and population.
Mexico – the world''s 14th largest economy – has widely been criticised for not doing enough to incentivise investments in renewable energies. Currently, renewables including large hydropower make up just 10 percent of the country''s overall electricity mix. Hydro leads the way with 13 GW installed capacity, while wind and solar PV follow at a mere 7 GW and 8 GW in 2021, falling way short of its renewable potential of an additional 30 GW.
Getting Mexico on the climate track is of utmost importance: The country is the world''s 14th biggest emitter of greenhouse gases, 12th largest crude oil exporter and still lags behind a staggering 130 countries to formulate a so-called net-zero emissions goal. At the Paris climate conference in 2015, Mexico pledged to reduce its emissions by 35 percent by 2030, a goal that currently remains very much out of reach. Given Mexico''s steep economic growth trajectory, reaching a 35 percent reduction in greenhouse gas emissions requires a significant push from the government and private sector towards renewable energy and energy efficiency.
But such a policy push is pending. Under the current administration, Mexico has moved even further away from undergoing an energy transition than before its current President López Obrador took office in 2018. López Obrador has argued that Mexico is not yet ready for a green energy transition. Instead, he has used his time in office to make a name for himself as a proponent for a strong role of the state in the country''s energy mix leaving little space for private sector involvement.
Why then are Mexican policy makers so persistent in maintaining a strong presence of fossil fuels? One of the primary reasons for the country''s struggle to transition to clean energy is its heavy dependence on revenues generated by its oil industry. For decades, Mexico has relied on oil exports as a significant source of income, with state-owned petroleum company PEMEX playing a central role in the national economy. This reliance on fossil fuels has not only discouraged investments in renewable energy but has also made the Mexican government hesitant to embrace a full-scale clean energy transition, fearing potential economic instability.
Furthermore, transitioning to clean energy requires substantial capital investment in renewable infrastructure, which can strain the already limited financial resources of the Mexican government. Estimates suggest that capital investments needed could be as much as USD 350 billion by 2030. The challenge made more difficult by the fact that most wind and solar resources are located far away from demand centres and the associated need to update and expand the country’s aging electrical grid, which is essential for the efficient integration of renewable energy sources.
Mexico’s energy transition is a complex political and economic process. While the country possesses great potential for renewable energy development, significant political and institutional obstacles remain. To reach its full potential, the country must do two things: undergo serious political reforms to provide a space for the private sector in its energy mix and formulate an ambitious and serious commitment to sustainable development and greenhouse gas reduction. Mexico''s economy – and population – will benefit as a result.
The views and opinions in this article do not necessarily reflect those of the Heinrich-Böll-Stiftung European Union.
FILE - Pemex oil workers set the drill on the Centenario deep-water drilling platform in the Gulf of Mexico off the coast of Veracruz, Mexico, Nov. 22, 2013. The 1938 nationalization of Mexico''s oil sector from U.S. and British companies is a point of pride for millions of Mexicans.(AP Photo/Dario Lopez-Mills, File)
FILE - A mural of Mexico''s former President Lazaro Cardenas covers a wall alongside the words in Spanish "Pemex is not for sale," right, from the PRD political party in Mexico City, Friday, Aug. 16, 2013. Cardenas'' oil expropriation was the single most popular decision by a Mexican president in the 20th century, and the nationalization remains immensely popular. (AP Photo/Eduardo Verdugo, File)
FILE - Mexico''s President Andres Manuel Lopez Obrador, right, and Mayor Claudia Sheinbaum, greet supporters at a rally in Mexico City''s main square, the Zocalo, July 1, 2019. Obrador led a fight against energy reforms that were aimed at drawing private investment to the massive state-run oil company, Pemex, and in 2024, the frontrunner in the race to replace him, Sheinbaum, chose the anniversary of Mexico''s oil expropriation to announce her energy proposals. (AP Photo/Fernando Llano, File)
FILE - Presidential candidate Xóchitl Gálvez campaigns in Irapuato, Mexico, March 1, 2024. Gálvez has said she prefers to rely on the private sector to drive renewable energy investments and wants to bring back the energy auctions that had opened the electric generation market to more private renewables companies. (AP Photo/Fernando Llano, File)
The Olmeca oil refinery stands at the Dos Bocas port in Paraiso, Tabasco state, Mexico, Nov. 30, 2023. The 1938 nationalization of Mexico''s oil sector from U.S. and British companies is a point of pride for millions of Mexicans. (AP Photo/Felix Marquez)
FILE - Pemex security employees inspect an illegal tap into a state-owned pipeline in a cornfield in San Bartolome Hueyapan, Tepeaca, Mexico, July 11, 2017. Despite Pemex''s struggles, Mexico continues to be one of the world''s biggest oil producers. (AP Photo/Eduardo Verdugo, File)
FILE - Supporters of former presidential candidate Manuel Lopez Obrador attend a demonstration organized by Obrador to mark the 70th anniversary of the nationalization of the oil industry in the Zocalo of Mexico City, March 18, 2008. The sign shows Interior Minister Juan Camilo Mourino, right, and President Felipe Calderon, depicted as vultures The writing at left of the sign reads '' the oil belongs to the Mexican people''.( AP Photo/Marco Ugarte, File)
FILE - Members of the marine wildlife conservation organization Sea Shepherd monitor the fuel tanker Burgos, as it continues to burn a day after it erupted in flames off the coast of the port city of Boca del Rio, Mexico, Sept. 25, 2016. Mexico is committed to having 43% of the energy it generates come from non-contaminating sources by 2030. (AP Photo/Felix Marquez, File)
MEXICO CITY (AP) — Mexico''s taking control of its oil sector from U.S. and British companies is taught in schools and celebrated every year. The 1938 nationalization is a point of pride for millions of Mexicans including President Andrés Manuel López Obrador.
The popular president hails from the Mexican oil industry''s heartland, and 16 years ago he led a fight against energy reforms that were aimed at drawing private investment to the massive state-run oil company, Pemex. This year, the front-runner in the race to replace López Obrador chose the anniversary of Mexico''s oil expropriation to announce her energy proposals, which include maintaining large-scale petroleum production by Pemex.
Front-runner Claudia Sheinbaum also wants to make sure that the government-run Federal Electricity Commission, CFE, generates the majority of the power Mexico supplies to homes and businesses. Like the other two candidates to replace López Obrador, she only wants limited private energy involvement, but continuing to favor state-owned companies will make it harder for Mexico to meet its climate change commitments, experts say.
Despite Pemex''s struggles, Mexico continues to be one of the world''s biggest oil producers. None of the candidates are talking about reducing that. The Federal Electricity Commission has held the monopoly on electricity transmission and distribution since it was established by presidential decree in 1937.
Mexico is committed to having 43% of the energy it generates come from non-contaminating sources by 2030. Today about 22% of Mexico''s electricity production comes from clean sources, according to estimates from the Mexican Institute for Competitivity think tank, or IMCO.
The room for change in Mexico''s contribution to global warming appears to be in where the government monopoly gets its electricity and no participant in Mexico''s presidential debate Sunday discussed reducing Pemex production.
Opposition candidate Xóchitl Gálvez did say she wants Mexico to produce half its energy from renewable sources within six years and that Mexico once again become known for cheap energy "thanks to private sector participation."
Sheinbaum mentioned her climate science background and spoke vaguely of a need to reduce the emissions that cause climate change, advancing the energy transition and adapting to climate change. She also said a huge new refinery that López Obrador had built would help reduce Mexico''s gasoline imports.
The Olmeca oil refinery stands at the Dos Bocas port in Paraiso, Tabasco state, Mexico, Nov. 30, 2023. (AP Photo/Felix Marquez)
Sheinbaum has pledged to continue to increase refining capacity at Pemex, hardly a recipe for a concerted move away from fossil fuels from a climate scientist-turned-politician. The 61-year-old former Mexico City mayor has also said she wants CFE to keep generating the majority of Mexico''s electricity, complicating the country''s stated desire to contribute less to global warming.
López Obrador pushed laws to give CFE plants preference over private renewable and natural-gas generating plants, even though many of the state-owned plants burn dirtier fuels like fuel oil, coal or diesel. The courts blocked the changes, so last year López Obrador bought 13 power plants — most running on natural gas — from Spain''s Iberdrola for nearly $6 billion, calling it the "new nationalization," ensuring that CFE generates the majority of Mexicans'' electricity.
"It would be costly for her to move away from that official line," said Oscar Ocampo, energy and environment coordinator for IMCO.
FILE - Pemex security employees inspect an illegal tap into a state-owned pipeline in a cornfield in San Bartolome Hueyapan, Tepeaca, Mexico, July 11, 2017. (AP Photo/Eduardo Verdugo, File)
Gálvez is the candidate for a coalition of ideologically different opposition parties. When she was a senator, she caucused with the conservative National Action Party, which had earlier pushed the energy sector reforms that forced a greater opening to the private sector.
In 2008, leftist lawmakers allied with López Obrador — the PRD''s 2006 presidential candidate — took control of both chambers of congress in an attempt to prevent votes on reforms. Those reforms opened the industry to private contracting in the service sector, but Pemex kept its monopoly over exploration, pipelines and gasoline distribution.
Gálvez has said she wants to improve Pemex''s efficiency and profit and proposed closing two money-losing refineries. Longshot candidate Jorge Álvarez Máynez of the small Citizen Movement has also proposed closing two refineries.
About Energy transition mexico city
As the photovoltaic (PV) industry continues to evolve, advancements in Energy transition mexico city have become critical to optimizing the utilization of renewable energy sources. From innovative battery technologies to intelligent energy management systems, these solutions are transforming the way we store and distribute solar-generated electricity.
When you're looking for the latest and most efficient Energy transition mexico city for your PV project, our website offers a comprehensive selection of cutting-edge products designed to meet your specific requirements. Whether you're a renewable energy developer, utility company, or commercial enterprise looking to reduce your carbon footprint, we have the solutions to help you harness the full potential of solar energy.
By interacting with our online customer service, you'll gain a deep understanding of the various Energy transition mexico city featured in our extensive catalog, such as high-efficiency storage batteries and intelligent energy management systems, and how they work together to provide a stable and reliable power supply for your PV projects.
