Renewables advance in Mexico despite AMLO's mindset

Although the Mexican government under President Andrés Manuel López Obrador (AMLO) has set a goal that 35% of all power generation in the country should come from clean sources by 2024, the actual policy moves have been less than clearly aligned with that target.

In particular, the February decision to cancel the planned fourth long-term power auction and two major transmission line tenders sowed doubts about the government's real level of commitment.

Nevertheless, multiple projects are marching forward and Mexico already has some of the most ambitious renewables projects in the region, including the largest solar project in the Americas in Coahuila, Italian green energy company Enel's 2,000-acre, 3GW solar farm set to power millions of homes (pictured).

Earlier this month, French energy firm EDF Renewables announced the commissioning of Bluemex, its very first solar power plant in Mexico – a 120MW photovoltaic facility located in the northern state of Sonora, adding to EDF's existing 1GW of wind and solar capacity in the country.

Looking ahead, Mexico has around 8.3GW of renewable power projects under construction, 20.5GW of approved projects and a total of 1.5GW in planned projects, according to a July 21 update on renewables in the country from Global Energy Research.

In the mid-term, Mexico aims to add 20GW of renewables in the next 15 years.

After completion of the first three energy auctions (the third one took place in 2017), 7.5MW of new clean generation capacity will be added, involving close to US$9bn in investments, according to the research firm.

The government’s cancellation of the fourth and latest round, however, is forcing the industry to wonder about the government's mindset as the players begin to look at future projects and the required infrastructure with state power utility CFE.

“I think they see renewable energy, understood as solar and wind, to be part of the reform that they are trying to roll back,” said David Shields, energy consultant and the editor of Energía a Debate, in an interview with BNamericas, referring to AMLO's long-standing opposition to the 2013 and 2014 energy reforms carried out under former president Enrique Peña Nieto's administration.

 “The biggest boost for solar and wind was in the energy reform and they see it like that,” said Shields.

The comments arrive as AMLO has turned tremendous focus on struggling state oil company Pemex, with the company and officials last week announcing an ambitious business plan to boost production, exploration and refining, a plan many see as overly optimistic, if not wholly unrealistic.

Looking at the development of renewables, says Shields, “[The government] sees see it as private investment taking up market share that should be part of CFE.”

“They see renewables as intermittent energy that CFE has to provide backup to, and they [ask themselves] ‘Why does CFE have to support this kind of energy? Why does it have to back up intermittent sources? Why does the CFE have to build transmission lines for private companies doing renewable energy?” added the energy expert. 

READY BUT NOT WILLING?

In a interview with news outlet Infobae México, Luis Romero, the country’s lead on renewable energy for the World Wildlife Fund (WWF), stressed that while Mexico is “advanced in terms of regulation” to make the transition to use green energy, it has done little to promote its progress.

“We haven't yet found a program that seems positive, particularly in the [energy ministry]," said Romero.

Romero further suggested it could be a question of early administration disorganization, "personally, I think this administration is just getting started, I think they're not very informed,” Romero said.

He added, “in large part, I think it's because of the cuts that have taken place,” referring to the new government’s tough austerity measures that have hit the energy ministry hard, despite AMLO's push for Pemex.

The WWF recently held a presentation in Mexico of Ren MX, an independent non-profit that seeks to link buyers (companies) and renewable electricity generators. However, so far the organization has yet to find “anyone” at the federal level to express strong interest in using the platform.

Nevertheless, Romero added that the government looked to be developing more traditional power generation, pointing out the late-June announcement that the CFE had contracted the Coahuila state mining development agency (Prodemi) for the acquisition of 330,000t of coal in the Sabinas basin of that state.

The CFE has stated that it is looking to build five new combined-cycle power plants under the recently unveiled plan to expand energy infrastructure this year, though they have offered few new details.

However, Romero added that there does not have to be a contradiction between the CFE's efforts to develop other traditional electricity production.

For the WWF, he said, there is no contradiction between the decisions of the CFE or in wanting to promote a company like Pemex and at the same time wanting to bet on renewable energy.

“The energy sector is very broad," Romero underlined.