“Energy is a central element of development and enables investments, innovations, and the emergence of new industries that are the engine of job generation, inclusive growth and shared prosperity of entire economies,” -Bank of Mexico.
In Mexico, energy is an issue that isn’t related only to technology but also to social and economic development. Having said the above, the measures and indicators on energy issues are coordinated mainly by public policies.
For this reason, it is interesting to analyze the strategies and goals of the Climate Initiative in Mexico (Iniciativa Climática de México in Spanish- INS), an organization dedicated to the analysis of public policies that contribute to the reduction of emissions that cause climate change. The ICM proposes strategies and goals for the decarbonization of the energy sector, taking as a priority the incorporation of renewable energies.
It aligns its efforts with Mexico’s clean energy objectives established in the Energy Transition Law and the mitigation of greenhouse gas and compound emissions from the electricity sector that were established in the Paris Agreement.
It collaborates with various analysts and policymakers in the planning and management of specific areas such as distributed generation, energy efficiency, qualified supply, electromobility, and solar thermal energy.
To achieve its objectives, the ICM proposes three strategies:
- Percentage of clean energy generation
It is expected that by 2024, Mexico’s energy matrix will reach 35% of clean generation. According to the Mexican Institute for Competitiveness, as of 2022, the production of clean energy is barely 10%, however, by 2023 it is estimated that there will be an increase from 11%-15%.
- Installed capacity of distributed solar generation in Mexico.
To have an installed capacity of 2,651 MW in 2023, the ICM proposes the transition from the electricity subsidy (which is used by 99% of the total homes) to a subsidy for solar roof investments. According to the Energy Regulatory Commission, in 2021 the installed capacity was 2,015 MW, and in 2022 the Electric Energy Savings Trust reported a 100MW increase in installed capacity in 41,436 individual networks.
- Energy efficiency goal
Energy efficiency is proposed as a component that allows energy demand to be reduced in a cost-effective manner. The main challenge to achieve this is to identify financing sources and implementation mechanisms. The goal is to reduce the rate of energy intensity annually by 1.9% until 2030 and by 3.7% for the period 2030-2050.
Energy efficiency can be measured subjectively as it includes different components. For example, in 2021, the Federal Government reported the results of the Energy Efficiency Program, among which the construction and infrastructure category stood out with a reduction of 13 GWh and vehicle infrastructure, a reduction of 14 million liters of fuel (gasoline and diesel). Also, by 2022, Mexico will be ranked 14th in energy efficiency worldwide, according to the American Council for an Energy-Efficient Economy (ACEEE). In addition to specific strategies, sectoral goals are also proposed for those industries responsible for 51% of emissions, that are: the electricity sector (oil and gas) and transportation.
There is no doubt that the INS is making great efforts to promote the energy transition. However, the government must consider that this will not be achieved if it doesn’t diversify the power generation plant to integrate sources with low or zero emissions of greenhouse gases. This represents a responsibility for the State since it is about decentralizing the responsibilities of a single actor to comply with international goals and treaties.
This post was submitted by Mexico Country Manager Pablo David Necoechea Porras