Luis Fernández-CID
Ambassador of Spain
Embassy of Spain
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Insight

How Spanish Companies Shape Mexico's Renewable Energy Sector

Wed, 02/21/2018 - 18:31

The bilateral relationship between Mexico and Spain goes well beyond its historic scope. In July 2016, ProMéxico data showed Mexico is Spain’s seventh-largest investor globally and the first among Latin American countries, with a cumulated investment of US$8 billion from 1993 to 2016. Spain invested US$19 billion in Mexico from 1999 to 2015. A significant contingent of Spanish companies have prospered in several sectors, including Grupo Santander, BBVA Bancomer and COPASA, to name a few. Energy-related companies, such as Iberdrola, Prodiel and Ormazabal, have also built success stories as they deepened their footprint in the Mexican market.

“The bet made several years ago by Spain on renewable energy, particularly in wind power, has contributed to the development of a competitive industrial scheme composed of wind park developers, wind turbine manufacturers and many other companies participating in the value chain. Today, you can find Spanish developers and technology in renewable energy virtually anywhere in the world,” says Luis Fernández-Cid, Spain’s Ambassador to Mexico. In 2020, 20 percent of the energy consumed in Spain will come from renewable sources.

The Spanish Embassy in Mexico has actively promoted opportunities to enable bilateral exchanges of information between expert government officials. “We have participated in all major forums regarding Mexico’s biggest clusters and industries, disseminating the lessons Spain has learned from its energy projects with the objective of making this experience useful to other countries,” says Fernández-Cid. To take bilateral relations to their full potential, different mechanisms are available to compare experiences. “In this sense, the importance of intensifying bilateral cooperation to apply better regulatory practices and public policies in health and safety, hydrocarbons and renewable energy, among others, has been underlined. Official visits, complemented by forums and institutions like the Spanish Mexican Binational Commission, add to these efforts.” As part of the MoU signed in 2010, both Ministries of Energy agreed the establishment of a work plan that included cooperation activities in various investments, such as market development and energy infrastructure, as well as the exchange of relevant information and research to improve technological development and human capital training.

The Spanish experience includes the presence of Iberdrola, Gas Natural Fenosa and others in Mexico’s energy sector that spans several years. “As an official agency, we facilitate the dissemination of our experience in terms of legislation and laws, among other elements, to Mexican officials in the sector. This is an important tool that can assist in making the best regulatory decisions pertaining to the Mexican market,” Fernández-Cid says. A prominent group of Spanish companies is strongly engaged with the development of wind power in the Isthmus of Tehuantepec, as well as other regions that have enormous potential. “Spanish companies are also pioneering the development of thermosolar and PV energy in Mexico. Today, 70 percent of the renewable energy generated in Mexico comes from Spanish companies.”

Local Spanish agencies are also contributing to efforts to underpin the objectives of the nation’s private players. “The Spanish Chamber of Commerce is a corporate organization open to both Spanish and Mexican companies. It organizes forums and company seminars to promote their products and services, and presents the latest industry trends and sectorial updates,” says Fernández-Cid. When private Spanish companies decide to tackle a new market in Mexico, Spain’s investment and export promotion agency, ICEX, helps them to place the best investment. “ProMéxico’s work, as Mexico’s representative abroad, is always vital in these decisions,” Fernández-Cid says.

Spain possesses a high level of technological development and lengthy experience in the renewable energy sector. The Mexican government’s bet on this type of energy is opening major opportunities for Spanish companies. “After almost five years, Spain is organizing a mega-auction of more than 2,000MW (expandable to 3,000MW) to install renewable energy. We are confident in the success of this process in light of a market eager for these technologies,” says Fernández-Cid.