Mexico Energy Forum: Sector Outlook

This week, MBN held the first virtual edition of Mexico Energy Forum 2021, covering a wide range of topics, from natural gas to renewable energies.

Energy Forum Highlights

• Mexico’s Future is Tied to Natural Gas’s. “Mexico is not an oil country; it is a gas country,” said Hector Moreira, Commissioner at CNH, in an overview of the status of the natural gas production process. “There are gaps that exist between natural gas production and consumption,” he said to highlight Mexico’s overreliance on US natural gas imports. Read more here!
• Crisis Management Crucial for Company Survival. “COVID-19 has generated both a health and an economic crisis,” said Jan Frowijn, Vice President USA, Mexico & Central America of ROSEN. Through his presentation he discussed crisis management in companies. To Frowjn, a crisis is also a change to work better. Read more of his input here!
• Boosts in Energy Investments. Mexico needs to include renewable energy in its path toward an energy transition. “There is a trend toward renewable energy due to its lower costs and good impact on the environment,” said Claudio Rodríguez, Partner of International Energy practice at Thompson & Knight. Energy policies are also necessary to lift Mexico’s economy and increase investments, according to Alejandro Valerio, Associate Practice Leader at FrontierView. To read more expert opinions on the matter, click here!
• Power Producers Ready to Support Energy Transition. The energy sector has been revitalized as a result of numerous regulatory changes in recent years but concerns about renewable energy’s reliability and stability remain. After the effects of the gas shortage in Texas, it is necessary to invest in Mexico’s transmission network, said Ramón Moreno Vergara from Mitsui & Co. Power Americas. Read more here!
• Electricity Market Must Run. The Mexican wholesale electricity market is incipient but there are opportunities to accelerate its growth. “We have to explain to customers how they can incorporate solutions regarding their energy supply while taking advantage of energy efficiency and demand control technologies,” said Hans Kohlsdorf, Founding Partner of Energy to Market. Read more here!
• Weathering Storms. Investment in renewable projects would contribute not only to environmental sustainability but also to energy security. In Mexico, “we need to focus our investments on mitigating our dependence by building storage capacity and diversifying our energy mix,” said Rubén Cruz, Lead Partner at KPMG Mexico Energy and Natural Resources. Read more here!

Featured Interviews

US Renewable Demand and O&M Expansion Grant Certainty – Albert Sunyer, Counter Manager for Mexico at The Nordex Group

Sunyer explains how the company adapted to the changing regulatory framework in Mexico’s energy sector and how it handled demand in 2020. However, new changes to energy law are creating disruption. “The Mexican government is considering to revert the Energy Reform. It is difficult to answer how this ultimately will affect the sector but we expect that these regulatory policies and decisions will be reverted by the Supreme Court, even though it will take some time for this to happen,” he said.

National

Electricity Reform Aims to Create Level Playing Field

Kicking off Mexico Energy Forum, Ángeles Huerta, Deputy of governing party MORENA for District 24 of Naucalpan, explained that the government’s changes to the Electricity Industry Law aim to create stability and efficiency. “We are now attempting to change the characteristics of the economic dispatch to one focused on stability, which means that it will be based on delivering energy efficiently,” she explained. “Generating clean energy relying fully on public costs is not sustainable.”

Will Mexico Meet Its Clean Energy Goal?

On Mar. 27, 2015, Mexico made a commitment before the UN to address global warming through a series of measures to reduce polluting emissions. Mexico will not meet its goal of clean electricity generation by 2024, according to calculations by the Ministry of Energy (SENER). The Program for the Development of the National Electric System 2020-2034 (PRODESEN) estimates that the goal will be reached one year after the end of President Andrés Manuel López Obrador’s six-year term.