Spotlight Activity: Mexico Ramps up Plans for Coal in the New Government’s Development Strategy
Mexico has three coal-fired power plants, with a capacity of 5,378 MW representing 7% of national installed capacity. Although the National commitment to increase clean energy use remains, the President of the Senate’s Energy Commission announced the plan to build a new coal power plant, consisting 2 units of 700 MW each.
Plans for building a new coal plant have existed since 2012, but with his declaration, the president of the Energy Commission suggested this be a priority and be included in the National Development Plan and in the Sectorial Energy Plan. The arguments for the construction of this plan include:
- Mexico needs to stop depending on natural gas imports, sourced mainly form the U.S., and achieve energy security.
- The generation of energy through renewable sources is not enough to meet the national demand as they cover just 7% of the total.
- The costs of energy production through carbon are lower than through renewables (600,000 USD vs 1 million UDS per MW).
Considering this declaration, experts and representatives of the renewable energy industry have expressed their concerns regarding the return to fossil-fuel based electricity generation, insisting on the viability of renewable energy through arguments like:
- Mexico’s carbon consumption is about 12-14 million tons and the country has only 0.1% of the global carbon reserve. In 2017, Mexico imported 10.5 million tons of carbon, mainly from Colombia and U.S.A. suggesting that another plant could mean more imports, as Mexico does not have enough Carbon reserves on its own. Thus, not advancing the energy security agenda
- Previous tenders in Mexico have registered the lowest costs in renewable energies like wind and solar (less than 20 USD per MW).
- In 2017, Mexico increased its energy solar production by 46%
It is also important to remember that Mexico’s Paris Agreement NDC contains commitments to increase clean energy use. Moreover, the country is part of the No Carbon Energy Alliance, a group of countries that aims to remove the use of energy produced from carbon before 2030.
Mexico has taken big steps toward an energy transition. Previous Long-Term Energy Auctions (a tool recently cancelled) showed the economic and sectorial benefits of switching to renewable energies, including an increase in private and foreign investment. Indeed, Mexico was declared, together with China, a decarbonization champion on 2018 by PwC as it reduced its carbon intensity in 5% through mainly solar energy.
Despite these advances, Mexico is still falling short in meeting its climate and clean energy goals: The Report “Clean Energies in Mexico 2018-2032”, made by the Private Sector Commission for Sustainable Development, the Mexican Association of Wind Energy, the Mexican Association for Solar Energy, and the Climate Initiative of Mexico, highlights the need to increase solar energy production by at least 16% and wind production by at least 6% to achieve Mexico’s climate change commitments. If this is accomplished, the economic impact would include a contribution of 1.5 million USD to GDP in 15 years, the creation of 200,000 new jobs, and a consolidated electric market.
It is paramount to continue this pathway of decarbonization of the electric sector and avoid the return to fossil fuels, as these cannot warrant energy security, economic development, and, much less, environmental benefits.
Status: Falling Behind
Mexico has taken big steps towards a low-carbon, future-proof economy. Using solar and wind energy, the country has proved the benefits of having a clean energy transition. Returning to the use of fossil fuels means taking steps back on climate action, air quality, new investment and technologies as well as not achieving one of the government’s main goals of energy security.
We applaud the efforts to guarantee accessible and affordable energy, however, it is necessary to carry on with the energy transition, as it implies economic, environmental and social benefits, as well as achieving national and international climate goals. Studies and past experiences have proven that renewable energy can be more profitable and help achieve energy security, along with a better life quality for the country. We ask the current administration to make clean energy a priority and support the expansion of renewable energy technologies, furthering the country’s environmental commitments and goals.
Send Action Alert Message to:
Secretary of Energy- Rocío Nahle
Address: Insurgentes Sur 890,
Del Valle, Ciudad de México. C.P. 03100
Director of PEMEX- Octavio Romero
Telephone: 1944 2500
Address: Avenida Marina Nacional 329, Colonia Verónica Anzures,
Miguel Hidalgo, Ciudad de México, CDMX C.P. 11311
Director of CFE- Manuel Bartlett
Address: Paseo de la Reforma 164, Col. Juarez, Cuauhtémoc,
Ciudad de México. C.P. 03100