The public pressure for a wider focus on environmental issues and the accompanying political bonuses of taking care of these challenges have began to spark a much needed change in Mexican politics.
06/03/2008 :: While there are a lot of things yet to be done, recognizing the environment as a strategic area for the country is definitely a good first step forward.
Environmental Policy
In Mexico, every new Administration in power has to produce a National Development Plan (NDP) during its first 6 months in office. The NDP provides a general description of the country’s situation and it also includes the main objectives and strategies to follow. Mexico’s current Administration, headed by President Felipe Calderon, released its National Development Plan 2007-2012 last year; the plan recognizes five strategic areas for Mexico. Environmental Sustainability is one of them.
The Ministry of the Environment and Natural Resources (SEMARNAT for its Spanish initials) is in charge of the environmental policy-making and planning. It is also in charge of implementing and enforcing norms and regulation throughout the country. The Ministry releases a yearly Environmental Sustainability National Program which identifies challenges in nine different priority areas: water, forests, biodiversity, environmental management and justice, environmental planning, climate change, waste management, environmental education and environmental research.
National Strategy on Climate Change
Recently, President Calderon presented the National Strategy on Climate Change (ENACC). This document details specific measures for emission mitigation with estimates of their emission-reduction potential. The document also gave birth to an Inter-ministerial Commission on Climate Change composed by seven different Ministries: SEMARNAT, the Ministry of Social Development (SEDESOL), the Ministry of Agriculture, Livestock and Fisheries (SAGARPA), the Ministry of Energy (SENER), the Ministry of Economy (SE), the Ministry of Foreign Affairs (SRE) and the Ministry of Communications and Transports (SCT).
The scope of the ENACC includes only those measures within the competence of the Federal Government, nevertheless it contributes to a nationwide consensus building in order to: identify opportunities for mitigation measures and emissions reduction; acknowledge the vulnerability of diverse economic and social sectors and geographic regions; take measures to develop the necessary national and local capacity for response and adaptation; and to contribute to the development of strategies, priorities and policies.
Renewable Energy
By 2000’s end, Mexico had 41,000 MW of installed power generation capacity; of which 11,000 MW was based on renewable energy. Most of this green energy came from large hydro projects and only 480 MW was produced by private investment.
Several events fostered the further-development of the renewable energy industry after the year 2000.
In 2001, for example, the Energy Regulatory Commission (CRE) issued new regulatory measures with the purpose of encouraging the development of generation projects based on renewable energy sources with intermittent availability, such as solar and wind.
In 2003, the Mexican government, with the support of the World Bank, received final approval from the Global Environment Fund for a USD $70 million grant to establish a fund to promote large-scale renewable energy projects.
In 2004, tax deductions were approved by Congress for those private participants willing to invest in renewable power generation machinery and equipment. One year later, an initiative for renewable energy was presented to Congress which requires the installation of 3,600 MW of new generation capacity powered by renewables by 2012.
All these efforts had their consequences. From 2000 to 2006, a total of 13,400 MW of new generation capacity were added in the country. Around 2,000 MW were based on renewable energy.
WInd power projects
Mexico’s Ministry of Energy expects to reach the country’s 2012 goal driven mainly by new wind power projects in the State of Oaxaca. Oaxaca, located in the southern part of the country, has an estimated wind power potential of over 10,000 MW. The State’s average wind velocity is above 15 m/s.
The Federal Electricity Commission (CFE) is planning to bid five new Independent Electricity Producer (IPP) plants with a total capacity of 500 MW in the following years. Private companies, on the other hand, have announced plans to install almost 2,000 MW of wind capacity in Oaxaca in the upcoming four years. In sum, a total of 2,500 MW of wind energy is expected to be installed in the State by 2012.
Mexico’s main challenge on this regard is its transmission infrastructure which is very limited and does not allow the evacuation of the electric power generated by most of the private companies. Estimations point that a 400KV new power line with a transmission capacity of at least 2,000 MW is required. Plans are to have this new line in operation by 2010.
Overall, and if everything goes as planned, 12,400 MW of new capacity will be installed across Mexico between 2006 and 2012. As mentioned above, 2,500 MW of this new capacity will come from wind energy projects in Oaxaca. Another 890 MW will be made available through a new large hydroelectric project and 310 MW will be based on other renewable energies. The challenge is to increase the country’s transmission infrastructure to allow the interconnection of green-project-generated-electricity around the country.
Mexico is well positioned to take advantage of the international carbon-emission markets and hence, be a part of the solution on climate change. The country is trying to use its renewable energy sources to achieve its institutional goal of having 25% of its installed capacity from renewables in a 10 year time span. The first steps have been taken, however a lot of challenges (and potential business opportunities) await. A correct and timely planning of the country’s green infrastructure is needed.