Energy Policy Sets Back Wind Energy in Mexico

An analysis by Energy Monitor (EM) showed that the current federal administration’s energy policy has pushed back wind energy production in Mexico. EM pointed out that data from the Global Wind Energy Council (GWEC) revealed that in 2022, installed wind energy capacity in Mexico grew only 2.2%, equivalent to 158MW, and represents the smallest advance in this sector since 2011. “In 2019, the country reached its peak of new wind installations with 1,280MW, taking advantage of the inertia of the previous energy reform that had boosted renewable energy. Since then, Mexico has lost its drive,” highlighted José Vela, Director, EM.

According to Vela, Mexico was given international recognition for its progressive policies on renewable energy production in 2018. “These policies were driven by the so-called energy auctions promoted by the previous federal administration. Particularly, the auction celebrated in November 2017, yielded a price of US$17.85/MWh and reported an installed capacity of 4,935MW, similar to that displayed by Africa or nations like Australia,” Vela added. 

Nonetheless, Vela stated that President López Obrador’s energy policy favors the use of fossil fuels over renewables, which has caused the wind energy target, set by the Mexican Wind Energy Association at 12GW by 2022, to be disrupted. Likewise, specialists have pointed out that the country will not reach its 35% clean energy goal by 2024. "I find it difficult for Mexico to meet the 35% target by 2024, given that we need around 9.5GW of installed capacity in renewables to do that. By the end of 2021, we have achieved 29% clean-energy generation and it is likely that by 2024 we will reach 32% at most," said Jorge Musalem, Manager of Strategic and Infrastructure Projects, CFE. 

According to Musalem, the country would require an investment of approximately US$10 billion to achieve its goals on time. However the current budget for clean energy projects is US$2.86 billion. On the other hand, during his participation in the 2023 Major Economies Forum on Energy and Climate, President López Obrador assured that his government will fulfill its commitment to produce 35% of clean energy by 2024, as part of its global actions against climate change. 

“Mexico and Argentina are among the Latin American countries with the greatest potential to boost wind energy, but public policies implemented in recent years have discouraged investments, mainly in the private sector,” Vela stressed. Mexico has a wind energy capacity of 7.1GW, of which about 1GW are located in the Isthmus of Tehuantepec, a region that has been dubbed one of the best places in the world for wind energy production. Vela added that besides Oaxaca, states like Baja California, Zacatecas, Hidalgo, Veracruz, Sinaloa, Chihuahua, Nuevo Leon and Yucatan, would also be suitable for this activity. Yet, “their potential is being wasted,” he said.