Edmund Duckwitz
German Ambassador
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German Expertise in the Renewable Energy Sector

Wed, 02/19/2014 - 11:20

Q: Germany is a world leader in the development of renewables. What are the main lessons that Mexico could learn from Germany in this area?

A: The development of the German renewable energy sector came in answer to the demand for specific technologies in my country and abroad. Germany is poor in natural resources, but it is rich in engineering capabilities and technological development. Emphasizing the development of the German renewable energy sector is also a logical response to fighting climate change.

The guideline for Germany’s main strategy is the principle of diversification of its energy production. We are continuously seeking to further develop a sound mix of energy sources fueled by wind, sun, biomass, and geothermal sources in the light of distancing us from nuclear power by 2022. The German Energiewende (transition to a sustainable economy) is currently under discussion and adjustments are necessary. Germany is well-advised to share with Mexico both the positive and negative experiences it has seen in its energy reform efforts. However, Germany is far from being in a position to teach lessons to Mexico. We have not had only positive experiences, given rising energy prices and the continued application of an unpopular and highly criticized subsidy system for large-scale energy users. The respective energy production and distribution markets of our two countries are too different to compare. We are convinced that the Mexican government’s plans for an energy reform should lead to the partial liberalization of the market. This would trigger the generation and distribution of renewable and clean energy at fair and realistic prices. At the same time, Mexico has set itself ambitious goals regarding the use of clean energies by the 2020s. For that very reason, Mexico has shown it is interested in how best to develop a new energy-mix.

Q: What are the respective roles of the private and public sector in making the change toward a new energy generation mix in Germany?

A: The private sector is the main economic source of technical innovation and for the supply of technical solutions for the changes we are making in the German energy sector. The public sector is providing the legal framework, such as the tariffs set to channel energy generated by renewables into our grids. The public sector supports technical development through government funded programs, by promoting entrepreneurial chances for the private sector, and by helping individual energy users and producers in their decisions to invest in alternative energy sources.

Q: What changes could be made to the Mexican operating framework to unlock its renewable energy sector?

A: A liberalized energy market with a broader variety of energy sources would certainly help meet the goals the country has set for itself. The Energy Reform will bring about greater transparency regarding prices for clean energy. These have to be calculable and attractive for potential producers and banks to be willing to finance projects.

Q: What are the main opportunities that Mexico offers German companies in the energy sector?

A: The opportunities for German companies in the renewable energy sector in Mexico do not differ to a wide degree from other markets. But the panorama of Mexican companies in the field, as well as the high number of cooperation projects between German and Mexican firms are promising. Germany’s strength in the sector is defined by its enormous number of SMEs which will find counterparts in the Mexican market. They have to actively investigate business opportunities on all levels. The German government is assisting them through programs financed by the German Ministry of Economics and Technology, and through our worldwide network of German Chambers of Industry and Commerce.

The main advantage of the Mexican energy market is clearly its enormous size as well as the potential demand it will offer in the future, coupled with the power of the Mexican economy in general. There are still limitations in terms of training and finding technically skilled specialists. In a market still regulated by long-established regulations, we are calling for liberalization and modernization. But we are convinced that the Mexican energy market will present a growing number of opportunities to German companies of all sizes that will provide information, investment, and technical expertise to support the diversification of the Mexican energy market.