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News Article

Seeking Clarity Regarding the Potential of Hydropower

By Pedro Alcalá | Wed, 03/09/2022 - 18:25

Deciding how important hydroelectric power will be in the energy transition and in a hypothetical future clean energy matrix is complicated, given the many advantages and disadvantages that must be weighted against each to reach a proper conclusion, asserted Jacobo Merkler, President of the Mexican Association of Hydroelectric Energy (AMEXHIDRO).

Merkler established that hydropower might be the oldest of Mexico’s renewable energy sources: “Hydroelectric power arrived in Mexico at the beginning of the 20th century, the first installations were located at textile factories.” Large hydroelectric projects such as Infiernillo and Chicoasen are fundamental chapters in the history of Mexican infrastructure and nation-building. According to the energy ministry’s numbers, as found in the latest PRODESEN, hydropower capacity in Mexico amounted to 12,614MW by the end of 2020. It accounted for 14 percent of Mexico’s total energy matrix and 44 percent of its renewable capacity. Most of this capacity can be found around Mexico’s Pacific coast, particularly in the states of Chiapas, Guerrero and Nayarit. 

It is precisely in government documents such as the PRODESEN that a discrepancy arises in the calculations for the future potential of hydroelectricity. Merkler compared the assessments made by the Ministry of Energy with those made by the National Commission for the Efficient Use of Energy (CONUEE). His findings were exceedingly unusual. CONUEE’s 2009 briefing claimed that future hydroelectric power potential in Mexico varied between 19,600MW and 53,00MW. However, SENER found that potential to be 5,500MW in 2014 and 1,631MW in 2016. Merkler noted that this decrease is not common when measuring the potential of other energy sources, whether renewable or not. He then theorized that an important factor behind these irregularities may be that the underlying information is not being gathered and made available as it used to be. “We have stopped measuring the flow of rivers like we used to. This lack of data leads to these uneven conclusions,” he said.

Merkler believes that the advantages of hydroelectric power are well known and established: “Due to its dispatchability and ability to foster control, hydroelectric power allows other intermittent renewable energies to participate in the energy mix. While the development of a hydroelectric project takes between 7 and 8 years, its useful life is between 50 to 100 years. In Mexico, the average age of a hydroelectric plant is 46 years.” Hydropower’s investment needs are the highest when compared to popular renewable energy categories, costing US$1,800,000/MW, as opposed to wind’s US$300,000/MW and solar’s US$120,000/MW. Nevertheless, its ability to generate a positive economic spillover regarding added value leaves wind and solar far behind.

The disadvantages of hydropower can be more difficult to discern, since the social and environmental impact of each project must be assessed individually. All hydroelectric power projects must consider more than their territorial impact over neighboring communities and ecosystems, as do all renewable energy projects. Yet hydropower projects must also consider the water rights of communities and farmers that could be hundreds of kilometers down the river. Therefore, all the legal and social risk calculations that come with hydropower projects increase their complexity exponentially when it comes to development. “According to Mexico’s general water laws, power production ranks seventh in water consumption priority, behind human consumption, animal consumption, agriculture and other considerations. Furthermore, the Kyoto Protocols limit how much energy a hydro dam can generate in relation to the amount of land it has to flood, so that limits the scale of projects too,” emphasized Merkler. 

There is also the question of innovation: whereas solar and wind power technologies have evolved continuously over the past decade, reducing their cost and increasing their efficiency, hydropower components have changed little. Merkler concluded that a concerted effort from public authorities is needed to grant hydroelectric power its highest possible position in Mexico’s energy matrix. Nonetheless, the ambition that these developments could evoke must also be tempered with its limitations.

Pedro Alcalá Pedro Alcalá Senior Journalist & Industry Analyst