Solar PV Atlas: Solar Power in Harmony with Nature - WWF

Solar PV Atlas
Electricity sector
Since the 1990s the Mexican government
has allowed the privatization of power
plants, but the electricity market is still
limited for private power producers. The
state-run electric utility (CFE) creates barriers
to entry for private producers in order
to control most of the country’s electricity
generation and transmission. Just over
12 GW of installed capacity belongs to 22
private companies, the rest to CFE. 7 Electricity
is a growing market in Mexico, with
the Ministry of Energy predicting demand
growth of 3.3 per cent per year for the next
10 years.
Mexico’s electricity mix relies heavily on
fossil fuels. Natural gas is the dominant
source of electricity generation, and heavy
fuel oil and coal also have a large share.
Hydropower and a small amount of nuclear
power complete the mix. Though hydropower
and geothermal development seem
stagnant, other RE generation is undergoing
modest growth. There is huge growth
potential for RE, and Mexican policies are
seeking to tap at least part of this potential.
In 2008 a special programme for renewable
energies was established by the Mexican
government and the Mexican Congress
approved a set of energy-related laws and
reforms. The programme sets three main
goals for renewable energy to be achieved
by 2012: (1) more than double the installed
capacity of renewable energy sources, from
3.3 per cent to 7.6 per cent of total installed
capacity; (2) increase renewable energy
generation from 3.9 per cent to 6.6 per
cent; and (3) use renewable energy to electrify
2,500 off-grid communities. Yet, this
programme seemed to be less than a firm
commitment for renewable energy expansion,
since no comprehensive implementation
and financial schemes have been put in
place.
The National Energy Strategy (ENE) was
created in 2010 as a legal framework for
achieving the energy sector’s main objectives
— security, efficiency and sustainability
— over a 15-year time horizon.
Subsequent ENEs have been created but
not ratified, so the 2010 strategy remains
in effect. That ENE called for 35 per cent of
electricity generation capacity to be from
nuclear energy and RE including large
hydro by 2024. It also set the interim goal
of 7.6 per cent of installed capacity for RE
excluding large hydropower plants.
Currently, wind energy is the only RE
technology growing rapidly in Mexico. An
energy transition to diversified RE and less
dependence on fossil fuels is not yet happening.
Because of ambiguities in federal
law, the state-run electric utility (CFE) –
which controls the majority of the electricity
sector in Mexico and is one of the most
important players for the development of
renewable energies – is constrained. The
law states that power production by CFE
must be selected at the lowest cost, taking
into consideration environmental externalities
for each technology, and it must offer
optimum stability, quality and safety of the
public service. Although the law takes into
account the valuation of externalities, there
is no approved methodology to quantify
these externalities. As a result, externalities
are generally not considered, and traditional
fossil fuel projects continue to move
foreward.
MEXICO
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