35 percent of Clean Energy in 2024 to Be Achieved: Rocío NahleBy Cas Biekmann | Tue, 10/12/2021 - 17:51
Mexico’s Ministry of Energy (SENER) asserts that the country will achieve its clean energy goals, set at 35 percent capacity by 2024, considering that 32 percent is already in place. Analysts continue to worry over Mexico’s energy transition amidst controversy caused by President López Obrador’s proposal to reform the sector.
Minister of Energy Rocío Nahle confirmed on October 12 that Mexico is set to reach its clean energy goals the country established during the 2015 Paris Agreements and anchored in Mexican legislation. The controversial constitutional reform that would put the balance firmly back into the hands of CFE while hampering private efforts, thus far the main drivers of renewable energy development in Mexico, is paramount according to Nahle. “Mexico produces electricity through via sources. At this time, electricity generation through hydroelectric power plants is 9 percent. However, the CFE has capacity for more than 18 percent, in hydroelectric power generation alone we can increase this by 10 percent,” added Nahle, referring to the government’s plans to revamp CFE’s existing hydropower capacity.
Energy efficiency will be a further critical component for Mexico’s energy transition. “CFE will also work to improve its power plants through energy efficiency. We also need to talk about this topic: the energy transition is not just carried out with [power producing] technology, but also with energy efficiency. CFE, PEMEX and private companies are adapting their equipment so that it becomes more energy efficient,” said Nahle.
Some analysts question the government’s capability to add an impressive 10 percent of hydroelectric capacity to the mix by improving existing capacity, seeing that this goal complicated further by looming droughts, they do agree that adding significant MWs should be within the realm of possibilities. With the additional focus on energy efficiency, Nahle’s statements suggest that SENER and CFE are not necessarily looking toward new energy developments. Nevertheless, a 1000MW solar farm as well as possible wind and nuclear energy projects remain in the cards for the government, although it appears to focus on combined cycle projects first.
Mexico’s already argus-eyed private energy industry is watching the government’s proposal closely. If voted through, it would change the status quo of the energy sector brusquely and put their future in the market in doubt: all existing permits and contracts would be pending to be cancelled, and CFE would become the only offtaker in the market to sell to. A hard cap on private participation would be set at 46 percent, which does suggest that private companies will remain essential to the sector. Many industry analysts and insiders involved in the private sector nonetheless believe that the reform would harm past investments, discourage future ones and deal a massive, counterproductive blow to renewable energy development in the country.