Renewables sector could fulfil energy independence mission

MEXICO CITY (ICIS)–While companies battle in court to defend their right to participate in the Mexican market, advocates for renewable energy in Mexico are trying a different strategy: to use the administration’s own priorities and potential concerns as a way for making their case.

Mexico’s need for energy sovereignty was one of president Andres Manuel Lopez Obrador (AMLO)’s main campaign platforms, and renewable energy is currently the best way to achieve just that, according to Mexican policy expert and attorney John McNeese, speaking at an 11 June webinar from the University of California, San Diego’s Institute of the Americas.

Mexico’s dependence on natural gas for power generation is a case in point: roughly 90% of its natural gas (outside of Pemex’s usage for its own projects) is imported from the US, making it extremely dependent on a foreign power. Nearly 70% of the natural gas imported is used for power generation.
“Of all the countries that are highly dependent on imported natural gas, only Mexico relies on a single country for substantially all of its imports,” McNeese said. “Renewable energy in lieu of natural gas would carry out the principle of energy sovereignty for Mexico.”

Recent moves by the government to increase the cost of transmission for private generators with legacy contracts is justified by the idea that renewable power places an undue burden on Mexico’s grid. McNeese, however, said that the best response to this argument is to expand the role of storage – and include the cost of storage in comparing the real cost of renewable power.

US MARKET COMPARISONS
In the US market, the case for intermittent power becoming price competitive is being made, even in configurations that address some of the concerns that the AMLO administration has had. At a 2017 auction in Colorado, bids came in a $21/MWh on average for wind, plus storage. Solar followed close behind, at $36/MWh on average for solar plus storage. Mexico’s auctions during the previous administration yielded prices as low as $18/MWh but without storage factored in. Power storage regulations in Mexico are not yet fully developed.

In Mexico, more than 750,000 formal sector workers have lost their jobs as a result of the coronavirus impact on the economy, and job creation might become a key priority for AMLO. Renewable energy has shown itself to be an attractive source of new jobs in the US, McNeese said, noting that in 2019, 335,000 people worked in the solar energy sector and another 111,000 worked in wind solar generation.

Solar installers and wind technicians are amongst the top growing fields in that country, according to the US Bureau of Labor Statistics. Both sectors could give an expected boost to Mexican employment, where assembly and manufacturing of renewable generation products, such as wind turbines, could create additional jobs as Mexico positions itself to recover from what many expect to be a severe economic contraction this year. Emily Pickrell