Droughts Threaten Power Production: IMCO

The Mexican Competitiveness Institute (IMCO) has warned of the impact of droughts on power production in the coming years. To address this issue, the institute recommends to update the legal frameworks governing water management and distribution.

On Feb. 7, 2023, IMCO published a diagnosis regarding Mexico’s water issues. The institute underscored that the country is already facing the negative effects of water scarcity in the central and northern regions. Although the effects have not significantly impacted the energy or industrial sectors yet, water scarcity may affect energy production since hydroelectric power plants represent 15% of the country’s installed power production capacity. 

Mexico has 731 hydroelectric plants with 12,614MW of installed capacity across 16 states, including small plants with less than 10MW of installed capacity. Overall, they consume about 134,000hm³ of water.

IMCO reported droughts have affected the level of water storage in the country’s main dams in the past decade. The maximum capacity of the main dams equals 127,600hm³ but the average annual storage volume barely reached 69% of this level in 2021. The northern region had the lowest levels of stored volume with 40%.

The report stresses that the energy sector is the third industry with the highest water consumption in Mexico, accounting for 4% of water concessions. Additionally, thermal power plants use water for cooling the steam that leaves the turbines. “Once used, water returns to the water body from which it was extracted. Since thermal power plants add chlorine and other toxic substances that prevent the growth of algae within the infrastructure, to the cooling water, it ends up polluting water bodies,” the report reads. 

In 2021, Mexico registered 8,491 drought episodes, of which 71% were classified as severe, 26% were extreme, and 3% were exceptional, which resulted in a total scarcity of water in reservoirs, streams and wells and caused significant crops. 

To address the problem, IMCO has urged the Mexican government to update its public policies on water management and distribution. “The existing legal framework was established under conditions that differ from the current situation. Therefore, it must be updated based on criteria such as population increase, urban sprawl, drought trends and rainfall variability,” IMCO highlighted. 

The institute outlined a series of recommendations: improve water use monitoring, particularly in the agricultural sector, develop climate-friendly projects for this sector, evaluate and update the delimitation of the aquifers based on geopolitical criteria instead of geophysical factors and invest in maintenance for infrastructure. By taking action, Mexico can ensure that its energy sector retains its clean and stable hydroelectric base load in the face of water scarcity and droughts.