BloombergNEF’s annual Climascope assessment of the most attractive markets for investment in renewable energy projects ranked Mexico in the 63rd position among 107 emerging markets, and 90th position for all markets. The country registered a 1.67 rating out of 5 points. The evaluation consists of three criteria: experience, opportunities and market foundations.
Mexico obtained its lowest score in the category of experience, with a score of 0.86 points. This indicator considers the achievements of a market to date in all three evaluation criteria. Regarding investment opportunities, Mexico received a rating of 1.04 points. This parameter examines a market's potential to increase its supply of renewable energy, transport and clean heating technologies. The country obtained its highest evaluation in fundamentals, with 2.39 points. This indicator covers key market policies, market structures and barriers to investment.
The report stated that even though Mexico is the second-largest power market in Latin America, its installed renewable power capacity accounts only for 19 percent of its total power production portfolio of 95GW. “Power in Mexico remains heavily weighted toward fossil fuels, with natural gas, oil and coal together accounting for 65 percent of capacity and 72 percent of generation in 2021… Official plans for CFE are more focused on revamping its large hydro fleet and expanding its fossil fuel portfolio, primarily with gas plants,” The report reads.
According to the report, the market share is expected to grow with further investment, which continues despite the cancellation of the country’s auctions and other adverse policy measures. It also highlighted that so far, Mexico has not set a net-zero emissions goal nor a long-term carbon strategy.
“Since taking office, President Andres Manuel has canceled Mexico’s highly successful renewables auction program, sought to dilute the clean energy certificate (CEL) market, sidelined clean-energy targets and eliminated legacy benefits that wind and solar plants received,” the report reads. So far during the administration of President Lopez Obrador, investments in clean energy projects have fallen drastically, from US$4.25 billion in 2019 to US$705.9 million in 2021.
The top 5 emerging markets for investment in renewable energy projects are Chile with 2.58 points, India with 2.57, China with 2.44, Colombia with 2.44 and Croatia with 2.38.