“Perfect Storm” Highlights Region’s Infrastructure Limitations

Mexico needs to invest more in energy security. The recent blackout that affected Mexico’s northern region could be considered the perfect opportunity to ensure gas supply and a more reliable energy sector. Tania Ortiz, Director of IENOVA (Infraestructura Energética Nova) explained to El Economista, how Mexico needs to have a trusted energy security plan, to stimulate the production and storage of natural gas, as well as to invest in electricity transmission and renewable energy. The “perfect storm” the industry is experiencing, despite its negative consequences, represents an opportunity to think about long-term solutions.

More than 4.7 million users in Nuevo Leon, Coahuila, Tamaulipas and Chihuahua experienced power outages over the course of a couple of days. The blackout occurred while temperatures were extremely cold in the northern part of the country and southern US. As a result, the outage left millions of people without power at subzero temperatures. Texas even resorted to opening heated public shelters. The situation highlighted some of the region’s infrastructure problems and limitations, although it presented an opportunity to improve the grid.

Ortiz said a lack of investment in renewable energy represents a wasted opportunity. Mexico is rich in renewable energy, which is why it makes sense to continue growing this sector, especially now that the shortcomings of the traditional energy system have been exposed.

According to the US Energy Information Administration, by 2019, 61 percent of the electricity in Mexico was generated with natural gas. According to an MBP article, Mexico imports 90 percent of its natural gas form the US. Despite the slight decrease in electricity generation in 2020, Mexico’s natural gas-fired generation increased. Today, Mexico’s power system still relies on natural gas. This is a major problem, as the pipelines used to transport natural gas froze after Texas reported its lowest temperature in over 30 years.

Analysts agree that there is some uncertainty in the electric industry. President Andrés Manuel López Obrador’s electricity reform, which will be voted on Feb. 23 by members of the House of Representatives, aims to guarantee power supply reliability and a price system that would only change with inflation.