Mexico Bets on Hydropower to Drive Clean Power Production
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Mexico Bets on Hydropower to Drive Clean Power Production

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Cas Biekmann By Cas Biekmann | Journalist and Industry Analyst - Wed, 11/17/2021 - 09:02

Mexico’s President, Andrés Manuel López Obrador, once again touted hydroelectric power production as the basis on which Mexico will reach its clean energy goals. The existing capacity provides perspective for state utility CFE, but experts doubt whether hydroelectric energy can stretch as far as the government expects.

While Mexico’s government continues to gather support for a proposal that would give them control over Mexico’s energy sector, some experts question Mexico’s ability to reach clean energy commitments without the participation of private investments. However, the president frequently champions CFE as a clean energy-focused company due to its significant hydroelectric capacity of over 12,000MW. To reach the government’s goal to generate 35 percent of its electricity from clean energy sources by 2024, the president is looking toward a major hydroelectric overhaul with a price tag of US$1 billion. So far, 12 dams have been earmarked for an upgrade, though the administration has not named the projects involved.

“By changing the 40-year-old turbines of the country's hydroelectric plants, more and cleaner energy will be generated at the dams. That is the name of the game: to have clean and cheap energy,” said López Obrador in his morning press conference.

Analysts argue that the government’s plans make sense: the hydropower dams already exist, so the government does not need to invest heavily or spend much time on their development. The social or environmental difficulties associated with greenfield project development would be avoided entirely, too. Nevertheless, experts say that hydropower is not as cheap as the government claims it to be and that a looming water shortage would make generating energy based on large water reservoirs increasingly inviable. During the raining season, hydropower can make up as much as 16 percent of Mexico’s energy matrix. In dry months, this number drops down to 4 percent. In addition, CFE’s prediction to increase existing capacity and output might not have as much effects as the utility currently predicts.

On the back of 2014’s privatization of the energy market, private companies had been driving clean energy development in Mexico. Nevertheless, the president has vowed to reign back the previous reform, which he argues has fostered corruptions and unfairly weakened CFE.

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