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News Article

Clean Energy Not a Fad, It’s Good

Wed, 02/15/2017 - 10:45

Speaker: Leonardo Beltrán, Deputy Minister of Planning and Energy Transition at the Ministry of Energy

Mexico is committed to producing 50 percent of its energy requirements from clean sources such as solar PV and wind power by 2050, as it becomes increasingly clear that reducing carbon emissions and using clean energy sources is simply good business, Leonardo Beltrán, Deputy Minister of Planning and Energy Transition at the Ministry of Energy, said on Wednesday at the start of Mexico Energy Forum 2017 at the Sheraton Maria Isabel in Mexico City.

“It makes sense to be clean, it makes sense to be sustainable,” Beltrán said during prepared remarks to open the forum. Since the launch of Mexico’s Energy Reform in 2013, the Latin American country has shed a decades-old monopoly in energy generation and distribution and focused on improving the participation of renewable energy sources, culminating in 2016’s electricity generation tenders by the National Energy Commission (CRE).

The areas of transportation and energy generation, heavily dependent on fossil fuels, are the two with the most opportunities to increase their usage of clean power sources, he added. The country also has stated goals to reduce its energy intensity by 1.9 percent yearly from 2016 to 2030, and to accelerate that rate to 3.7 percent every year until 2050, without reducing business activity.

Mexico has a pipeline of around US$130 billion in energy-related investment projects for the next 15 years to diversify its energy matrix and increase efficiency, the government official added.

The country itself has invested some MX$15 billion (around US$700 million) during President Enrique Peña Nieto’s government on research and development of technological developments toward this aim, he said. “This is not just a fad or a government commitment. This a business decision.”

The Ministry of Energy and other government agencies, Beltrán said, are not just handling the regulatory framework needed for Mexico’s energy transformation but also actively working on setting the scaffolding and incentives. The first thing, he said, is the long-term vision and then the legal framework to bring certainty to national and international investors entering the industry.

Judging by the interest shown by international investors so far in the newly liberalized sector, the country is on the right track, Beltrán said. Solar projects in Mexico, for example, are much more competitive in Mexico than in most other latitudes, creating large business opportunities and attracting the attention of international financiers despite the risks involved. And Mexico’s development banking system can also help with reducing the perceived risks, he said.

During a question and answer session after his remarks, Beltrán said that among the projects the government itself is considering to increase its energy diversity is doubling the capacity of Mexico’s Laguna Verde nuclear power plant toward 2030. The plant belongs to Mexico’s former state energy monopoly CFE. But that power source will still see a reduction of its relative contribution to Mexico’s energy generation, he added.

He also mentioned that despite current political changes in the country’s main commercial ally, the US, after the election of President Donald Trump, it still makes sense to continue working toward North America’s energy interconnection. “We will have to see what happens with the US energy policy but without a doubt the North American energy integration is an area of opportunity to Mexico.”