Businesses Are Key to Mexico’s Renewables Targets

President Claudia Sheinbaum has set a national target of 45% clean energy in Mexico by 2030, yet wind and solar currently account for just 13% of Mexico’s electricity generation. With only four years to go, how can Mexico achieve its ambitious goal?  

The answer lies in business and government working better together, accelerating energy security and economic growth in the process. Governments can create a business-friendly energy market to boost competitiveness, and in return companies need to be open about the renewables challenges they face. The alternative is something both government and business can’t afford – quite literally, given rising energy prices.

A Big Challenge

Mexico is facing a big challenge. The government's clean power target requires a tripling of renewable power generation by 2030, meaning 46GW of new renewables capacity needs to be added in the next four years. And spiking international fossil fuel prices, fragmented geopolitics and intensifying climate impacts have all made the switch to renewables all the more urgent. 

Any delay in the energy transition would be a costly gamble. Countries winning the race to renewables are already leading on energy security, with renewable power providing locally sourced, cost-competitive energy. For companies, renewables use has become core to their competitiveness, key to winning contracts to supply big international corporations. By investing in renewables, companies slash their energy bills and demonstrate to customers, funders, and employees that their business is cost effective, resilient, and future-proof.

Put simply, renewables are central to Mexico’s future industrial competitiveness and energy independence. By contrast, failing to decarbonize the grid puts economies at a disadvantage, risking large companies choosing to invest in more pro-renewables markets. 

The good news is that Mexico obviously has immense renewables resources, ranking among the world’s Top 20 countries for solar power potential. Wind power is also a promising option in high-resource regions such as Oaxaca and Tamaulipas. What’s missing is a greater focus on collaboration between policymakers and business leaders, helping companies to invest in the green technologies needed to harness these resources.

Working Together

Climate Group’s RE100 initiative works with large, multinational companies like Siemens, NIKE, General Motors, and Grupo Bimbo to accelerate Mexico’s renewables roll out. Our members, over 160 international businesses operating in Mexico, want to use 100% renewable electricity by 2050 at the latest. They’re keen to work with the government to speed up the switch to renewable electricity to meet their targets.

This requires adding new renewables capacity to the grid in a straightforward and economical way, and raising business awareness around how to increase their renewables use in line with the latest regulations, which in today’s energy landscape is complex and frequently changing. For example, the government recently streamlined permitting procedures to encourage more corporates to generate their own renewable electricity on-site, introducing simpler procedures for projects up to 20MW. This is a very welcome step, but some of the companies we work with were not aware of this change and the details around it, for example how to submit a renewables planning application under the scheme.

A Powerful Change in Approach

Improved and more frequent dialogue between government and businesses is critical. We’ve seen the enormous benefits in action in other countries. For example, after closer conversations between corporates and policymakers around renewables in both Vietnam and Malaysia, these countries recently attracted multi-billion-dollar investments from global tech giants. 

Around the world we’ve seen how corporate investment boosts the renewable energy market and creates new green jobs, driving down the costs of future renewables installations. This price drop brings yet more renewables investment, and drives down renewables costs even further. 

RE100 members in Mexico currently only get 38% of their electricity from renewables, compared to 53% for RE100 members globally. To enable companies to get to a higher percentage the right conditions for renewable growth need to be in place. 

The alternative is Mexico remains exposed to unpredictable fossil fuel markets and becomes less competitive than its neighbors and peers. To meet its 2030 target, the country has an opportunity to create a renewables market fit for businesses ready to invest.