Thermal Power May Dominate Energy in Mexico in 2030
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Thermal Power May Dominate Energy in Mexico in 2030

Photo by:   Ivo Lukacovic, Unsplash
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Antonio Trujillo By Antonio Trujillo | Junior Journalist & Industry Analyst - Mon, 10/25/2021 - 10:52

Thermal power in Mexico is expected to dominate energy generation by 2030, even if coal power capacity only marginally decreases from 6.02GW to 5.67GW in the next decade as currently forecasted.

Global Data´s latest reports highlight that Mexico has “retracted its initial coal phase-out plan and currently has no phase-out policy in place.”

In the same manner, the report “Mexico Power Market Outlook to 2030, Update 2021” reveals that thermal power became a major source of power generation in Mexico in 2020, with very positive outlooks for 2030.

Thermal power capacity is expected to rise at a compound annual growth rate (CAGR) of 2 percent, from 55.3GW in 2020 to 67.2GW in 2030. Thermal power generation is projected to increase at a CAGR of 0.9 percent as well, going from 251.7TWh in 2020 to 274TWh in 2030.

“In 2020, thermal power generation held a share of 76.9 percent in Mexico’s total generation. Although this share is expected to decline to 63.3. percent in 2030, thermal power will continue to dominate Mexico’s generation mix,” said Rohit Ravetkar, power analyst for Global Data.

Ravetkar said “In 2017, the country became a member of the Powering Past Coal Alliance, a group of numerous countries, cities, regions, and organizations that aim to accelerate the phase out of coal power. Mexico committed to phase out coal power generation by 2030, however, the government that came into power in 2018 has promoted the use of thermal power generation. This has led to the slow growth for the renewable sector in Mexico.”

The report further highlights that in March 2021, the Mexican government passed an energy bill that favors government-owned power plants, which run mostly on fossil fuels. Under that bill, electricity has to be bought first from state-owned hydroelectric plants followed by those that run on coal and oil. Additionally, the new electric reform proposed by President López Obrador further favors state-owned CFE over the private sector.

“Steps taken by the Mexican Government like not raising their targets for reducing CO2 emissions under the Paris Agreement, passing an energy bill that favors electricity generation from fossil fuels and the purchase of two million tons of coal for power generation shows that power generation from fossil fuels is to stay in the country for a long time,” said Ravetkar. 

Photo by:   Ivo Lukacovic, Unsplash
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