Electricity Generation: Last Chance to Prevent a Climate Crisis

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Climate change has pushed companies from all sectors to accelerate the energy transition toward renewables. However, time is running out and the chances of stopping a climate crisis are dwindling. “We are all involved in this issue: civil society, the public sector and private companies in the electricity sector. We take it as our own commitment in which we must not fail,” said Ramón Moreno, President of the Mexican Energy Association (AME).

Although the Mexican economy has not yet overcome the effects of the pandemic, according to estimates by the International Monetary Fund (IMF), economic growth this year is expected to reach 6.3 percent, particularly due to the rebound from a very low base in 2020. Globally, growth is expected to reach 6 percent in 2021 and 4.9 percent in 2022.  “Mexico's growth has been uneven compared to other countries such as the US and China, where GDPs are already higher than they were before the pandemic,” says Moreno. “This has been driven by factors such as the pace of vaccination strategies.”

This uneven growth has not only been seen among countries but among industries, as well. While sectors such as tourism, aerospace and entertainment are still struggling to recover, others such as technology have not fared too poorly. In Mexico alone, exports of technology goods to the US fell by only 2 percent in 2020, while all other exports fell by almost 11 percent. 

The digitalization driven by the crisis has also sparked a change in corporate culture, with energy companies being no exception. The transition to renewable energy has been one of the pacesetting trends for organizations in recent years. Between 2000 and 2020, renewables’ installation worldwide has gone from 750GW to 2,800GW, while costs have fallen drastically by almost 85 percent during that same period, said Moreno. Among renewable energies, he adds, solar has been crowned the king of all and will be one of the most produced by 2025 compared to coal, according to the International Energy Agency (IEA). 

Driven by consumers' need for more energy, the pandemic also demonstrated to suppliers that electricity systems can absorb more renewable energy production than originally thought. Thus, the pace of renewable power plant installation has continued unabated, with record-breaking installations in 2020. The pace is expected to continue and gradually increase. However, Moreno warns, the clock is ticking and the rate needs to be even further sped up if we are to keep the global temperature rise at adequate levels.

“We are already seeing the effects of climate change through events that have happened around the world this year,” Moreno said. “The consumer is becoming more and more aware that they are looking for renewable and clean energy in the services and products they use.”

The Mexican Energy Association, present in 22 states in Mexico, seeks to coordinate power generation companies to strengthen their operations in the country and encourage investment and project development. "These are companies that invest for the long term and therefore want the country and the national electricity system to do well above all else," Moreno explains. Members of the association, which include companies such as Naturgy, Fisterra Energy, Iberdrola Mexico, IEnova and Mitsui Power Americas, are all committed to global and local emissions reduction and climate change mitigation goals, said Moreno. Companies are not only dedicated to investing in renewable energy but are also trying to explore new options “focused on digitalization toward reducing emissions,” said Moreno.