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Fostering a Renewable Electricity Market in Mexico
By Keith R | August 17, 2007
Topics: Energy & the Environment, Environmental Protection, Renewable Sources | No Comments »
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The other day I finally managed to read the report from the North American Commission for Environmental Cooperation (CEC) released earlier this year, Fostering Renewable Electricity Markets in North America (full report available only in English, but there is an executive summary in Spanish). While the report examines the current status and makes recommendations for Canada and the US as well, my focus (and that of The Temas Blog) is Latin America and the Caribbean (LAC), so I of course zeroed in on the portions relevant to Mexico.
The report is an interesting read, not too long, concise and usually to the point. I've decided to add it to the Energy Section of the Temas Recommended Reading List.
In a nutshell, the report concludes that Mexico is currently lacking many of the demand- and supply-side drivers needed to boost significant use of renewable energy sources. It makes a number of specific recommendations to remedy this, while noting most of them would be met if the Senate finally passed the draft Renewable Energy Law (Ley para el Aprovechamiento de las Fuentes Renovables de Energía – LAFRE) approved by the lower house of Congress (Chamber of Deputies) in late 2005.
What specifically does the report recommend for Mexico?
Opportunities in the Federal Electricity Commission's (CFE) expansion planning process
- Give an explicit mandate to the State-owned utilities to include renewable electricity in its expansion planning, as well as quantitative targets.
- Provide financial incentives for projects that deliver renewable electricity to the utilities, thereby compensating the positive externalities.
- Recognize the capacity contribution of intermittent renewable electricity sources—notably wind.
- Favor small-producer (under 30 MW) projects in two ways:
- by giving the State-owned utilities the mandate to include some small projects in their expansion planning;
- by providing incentives to projects not included in the utilities’ planning (thereby offering a supply driver for these projects).
- Review the methodology for determining the fossil fuel price forecasts.
Opportunities in green pricing schemes
- Create green tariffs with a long-term stability guarantee.
Supply-side opportunities to increase grid-connected renewable electricity in Mexico
- Consider redirecting any electricity premiums paid by the federal government toward the purchase of renewable electricity.
- Provide financial support for the assessment of the potential of renewable energy sources nationwide, thereby overcoming the lack-of-information barrier for all renewable electricity projects.
- Address public awareness, public participation and social responsibility, thereby contributing to foster social acceptance of renewable electricity projects.
- Promote administrative simplification and coordination by the federal, state and municipal authorities, in order to facilitate the procurement of the required licenses for new projects.
- Undertake awareness-raising activities in resource-rich areas.
Opportunities to increase on-grid self-supply of renewable electricity in Mexico
- Strengthen the role of development banks in the provision of guarantees for municipalities in self-supply agreements.
- Follow-up and replicate the experience of the Integrated Energy Services for Small Communities in Rural Mexico project.
Tags: CCA, CEC, electricity self-supply, energía renovable, energia renovável, green pricing, green tariffs, Mexico, North America, renewable energy, utilities, wind energy, wind power
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