Mexico’s Emissions Could Rise by 65 Percent with Energy Reform

With the changes and actions proposed by President Andrés Manuel López Obrador’s electric reform, greenhouse gas emissions and electricity prices could rise as high as 65 percent.

Per studies carried out by the National Renewable Energy Laboratory (NREL), an agency under the jurisdiction of the US Department of Energy, the proposed amendment to the constitution, which would grant the Federal Electricity Commission (CFE) 54 percent of the energy market, would significantly reduce the use of “flourishing” eolic and solar parks in Mexico.

This, coupled with other measures meant to prioritize energy generated by state-owned power plants, would signify a rise in carbon emissions of anywhere between 26-65 percent. As well as electricity generation costs rising to anywhere from 32-54 percent.

"These reforms could potentially distort the principle of economic dispatch by increasing production costs and threatening the country's short-term climate change commitments," the statement published by NREL reads. It further adds that greenhouse gas emissions would “increase significantly in all scenarios.”

The federal government under President López Obrador’s administration has taken measures to grant the State an ever-greater participation in the energy market, in what industry analysts call a “reverse” from the past administration’s reforms which “brought foreign investments in oil, solar and eolic developments.”

President López Obrador has also been criticized by renewable energy companies and climate activist groups for what they call a “fossil fuel campaign” in a world context where the richest and most polluting countries on Earth have pledged to shift to renewable energy. The pledge was shared by the US and China that, combined, account for 38 percent of all the world’s greenhouse gas emissions, per studies carried out by the Rhodium Group. Mexico accounted for 1.20 percent of the world’s emissions in 2019, according to Our World in Data.

On their part, AMDEE and ASOLMEX, Mexico’s associations of solar and eolic power, have said that the reform would cause the country to fail on its promises and commitments to the Paris Climate Accords.

The President’s electric reform would reportedly cancel existing electricity generation permits to prioritize CFE’s hydroelectric, nuclear and gas plants, some of which still burn fuel oil. These modifications would bring about an 8 to 35 percent increase in probabilities of power failures throughout Mexico, NREL added.

The study was carried out in the name of 21st Century Power Partnership, a Clean Energy Ministerial initiative, with Sept. 2020 to Aug. 2021 data.