Leonardo Beltrán
Undersecretary of Energy Transition and Planning
View from the Top

Building Complete Map of Mexico’s Renewable Energy Resources

Wed, 02/19/2014 - 16:20

Q: What are the administration’s priorities to create the required operating environment for emission reduction and clean energy generation goals to be reached?

A: The first target is to simplify the red tape that crowds the power generation process. Projects have to comply with 16 different permits, but without a roadmap showing them how to proceed or which institution to approach first. SENER is currently developing a website in which the process for developing a generation project will be clearly laid out, whether for hydro, wind, solar, bioenergy or geothermal. It will also list the specific requirements for the permit application process. President Enrique Peña Nieto launched the e-government initiative, a digital strategy which will create a one-stop shop for all activities within the federal government. This e-government website will have a dedicated sector for renewable energy. In the second stage of this simplification process, developers will only need to have one single permit, instead of having 16 different ones. That is our main plan to reduce the administrative costs of developing a project. We also have the transition fund which exists to promote projects that can demonstrate the benefits of clean technologies. Next year, we will invest around US$75 million in this fund. 80% of it will go toward energy efficiency and the rest toward renewables, mostly solar for residential purposes in rural areas.

Q: What would be the optimal impact of the Energy Reform on the renewable energy sector?

A: Mexico is the fourth largest geothermal energy producer but we are using only 10% of our resources. International experience has taught us that dedicated regulation is needed to promote geothermal activities. Right now, the government is developing such geothermal regulations and these were a priority in the Energy Reform. Secondly, an independent system operator, the National Center for Energy Control (CENACE), was empowered to oversee the national grid. It will have to comply with the rules of the market, including the incorporation of the externalities of using fossil fuels.

Q: What is this Undersecretariat doing to ensure that the availability of energy does not limit economic growth?

A: The role of this office is to make sure the country can plan ahead and guarantee its sustainable energy security. That is why we are developing a participatory process in which the private sector can provide its views. Based on that, we are developing forecasts for the energy sector, wherein we incorporate the expected growth of the economy with the level of available resources. We are about to complete the inventory of renewable resources in Mexico, which will quantify resources in each part of the country. There will also be a dedicated legal framework for geothermal activities to dispel all doubts about how geothermal resources can be exploited. Beyond that, the National Energy Strategy will provide a clear roadmap for the next 25 years. This might sound like a simple process but last year, Mexico faced critical alerts almost every single day while also importing increasing volumes of natural gas. If participatory planning had taken place, it is likely that other choices would have been made to meet the expected growth in energy demand. This is what we are now doing. We are beginning with a strong diagnosis. From there, we will coordinate with the relevant stakeholders to create a policy, including mandatory targets, as well as instructions on how to best reach those targets.

Q: What are the priorities for the development of the energy mix?

A: Our generation portfolio is mostly fossil fuel-based but we are shifting our hydrocarbon usage to natural gas, which has a lower CO2 content and is much more efficient. Utilizing more natural gas also lowers the generation cost, which will be directly reflected in the electricity tariffs. We see natural gas as a transition fuel. In early 2013, we announced an investment in exploration to quantify shale gas resources in the northern part of the country, but there is no conflict of opinion on what we should do with our natural resources.

Q: What are the main priorities for the expansion of the hydro, geothermal, solar and wind sectors?

A: We see clear potential for growth in each of these resources. We expect to find that Mexico is using about 10% or less of its cogeneration opportunities, 5% of its wind resources, 2% of its mini hydro potential and 1% of its bioenergy capacity. We have only 20MW of installed solar capacity nationwide while having one of the best solar resources in the world.