Leonardo Beltrán
Former Deputy Minister
Planning and Energy Transition
View from the Top

Energy Efficiency as Energy Policy 2.0

Mon, 02/25/2019 - 12:01

Q: How does Mexico’s 2012 energy mix contrast with 2018 and is the country on track to meet its 2024 objectives?
A: Since 2012, we have expanded our installed wind power capacity sevenfold and PV generation’s installed capacity grew 48 times, from 34MW in 2012 to 1,677 MW by 2018. The Ministry of Energy laid the groundwork for the legal framework to ensure it was conducive to reaching our 2024 goals. The data is there to assess our progress. The World Bank ranks the sustainability of the energy policies of 111 countries, including renewables, energy efficiency and electricity access. Overall, Mexico ranked 14th in 2017. Bloomberg New Energy Finance placed Mexico in the Top 10 renewable energy investment destinations in 2017. Mexico alone represented over one-third of clean energy investments in Latin America that same year. Mexico went from being among 2012’s Top 30 to 2018’s Top 13 most-attractive countries in EY’s Renewable Energy Attractiveness Index. It is quite encouraging to see Mexico in such good standing on the international stage.
Q: What would you have done differently during your term?
A: In retrospect, energy efficiency should have been considered an essential component of the WEM, comparable to CELs. Energy efficiency should be the Energy Transition Policy 2.0 for the new administration. We also should have paved the way to unlock CFE’s access to capital markets and to list on the Mexican stock exchange. CFE is difficult to compare to a similar fully private and stock market-listed corporation as it does not operate under the same conditions nor does it have the same corporate mandate. Listing CFE on the Mexican stock exchange has the potential of doing wonders for its corporate governance, financial health and overall competitiveness, both at the national and international levels.
Q: How is Mexico preparing to integrate disruptive technologies such as EV, energy storage and blockchain?
A: It is a matter of pending regulation, which CRE is in the process of concluding, to make sure it answers to market requirements and can establish a seamless cohabitation between the traditional, centralized power generation model and the growing decentralized system. Going forward, we need to think about preparing the regulatory framework for new, flexible models that can enable the use of disruptive technologies, such as EV, energy storage and blockchain. In terms of electricity transmission and distribution infrastructure, Mexico needs to both extend it and rely on distributed generation systems, as witnessed by the exponential growth in the number of distributed generation interconnection contracts. Mexico’s energy security is based on relying on a mix of optimal options and this administration excluded no possibility as long as it contributed to the energy security goal.
Q: What flagship project showcases the success of Mexico’s energy transition?
A: Coahuila is now home to the second-largest PV park worldwide, located in Villanueva. It is the direct result of the country’s Energy Reform. The next largest Mexican PV park is being built in Tlaxcala, with an installed capacity of 500 MW. Geothermal is also enjoying a second wind with private players developing projectsas a result of the reform. Mexico’s southern region would not have seen wind and solar projects if not for the regulatory framework that fostered their seamless development, including social and environmental impact assessments.
Q: What changes do you expect from the new administration?
A: The new administration has a specific vision and set of actions for what needs to be done to foster the growth of the energy industry. This vision obeys to a moment in Mexico’s history when the country did not have as many trade and investment connections with the international economy as we have today. Now, Mexico has one of the most extensive lists of trade agreements worldwide. As per the World Bank’s latest figures, international trade amounts to 77.56 percent of Mexico’s GDP. As Mexico is a market-driven economy, it makes sense to inject market forces into the country’s electricity industry, such as the design and launch of the wholesale electricity market.