Renewable Energy Opportunities in Mexico

An Expert's View about Energy Efficiency in Mexico

Posted on: 29 Sep 2010

Considering Mexico’s privileged geographic location and a stronger legal framework to support renewable energy projects, this represents unprecedented opportunities for British investors.

Sector briefing Renewable Energy Opportunities in Mexico Why Mexico? With oil reserves rapidly declining and a high vulnerability to climate change effects, Mexico has acquired strong commitments towards the reduction of carbon emissions and the promotion of renewable energies and energy efficiency measures as part of a long term sustainable development strategy. According to the National Infrastructure Programme, the Mexican Government is planning to increase power generation capacity through renewable resources from 14% to 25%, including hydro power plants, by 2012. A substantial number of projects need to be developed in order to achieve this goal. Considering Mexico?s privileged geographic ?The Mexican Government is location and a stronger legal framework to planning to increase power support renewable energy projects, this represents unprecedented opportunities for generation capacity through British investors. renewable resources from 14% to 25%, including hydro Find general information on the Mexican power plants, by 2012.? market conditions on UKTI?s website. The Doing Business Guide for Mexico gives an overview of Mexico?s economy, business culture, potential opportunities and an introduction to other relevant issue. UK Trade & Investment Sector briefing: Renewable Energy opportunities in Mexico ? Net metering (small production of solar Opportunities power) ? To have open access to transmission The Strategy for Climate Change is one of the and distribution grids to exploit central themes of the current public policy, superficial and underground hydro defined in the National Development Plan for resources. It is required to have a usage 2006-2012. The Plan?s Special Programme for or exploitation permits (SEMARNAT- Climate Change, reconsidered the energy CAN). production and consumption habits and includes as key activities, the promotion of Specific RE opportunities can be found in the clean technology, R&D in order to reduce following areas: Mexico?s dependency on fossil fuels. ? Wind power. There is a total estimated As a consequence of this and in accordance potential of 40,000 MW of which only with a long term sustainable development 2,473 MW will be used by 2012. Oaxaca strategy, Mexico has started promoting has one of the best wind power renewable energy (RE) and energy efficiency generation potentials in the world; the (EE) in an increasingly active way; in wind is strong enough to generate November 2008, a strategic energy reform electricity with a plant factor of which included the new Law for the Use of approximately 50%. In Europe, where Renewable Energies and the Financing of the wind energy is more developed, it Energy Transition (LAERFTE) and the Law for amounts to 30%. Sustainable Use of Energy (LASE) were passed. ? Small hydro power. Of a 3,250 MW Also, in 2008, the Government of Mexico took potential, only 109 MW are in use. two major steps towards developing bio-fuels ? Geothermal. Mexico?s installed capacity is production and development policy. close to 1,000 MW, the third largest in the world. Since 2004, some attractive fiscal incentives ? PV systems for rural electrification and such as zero tariffs for equipment that pumping. The country has an average prevents pollution and promotes technological daily sun exposure of 5 KWh/m2, enough development and accelerated depreciation for to cover the need of the average Mexican infrastructure projects that use RE sources (up household. to 100% in one year) were established. ? Solar water heating systems for Moreover, there is a fiscal credit of 30% for residential and commercial use. Mexico research and development in RE activities. City?s government has established that new residential and commercial Historically, private sector participation in complexes should use a 30% share of electricity generation in Mexico was limited and solar thermal energy to heat up water. mostly reserved for the State through the ? Waste to Energy: Comision Federal de Electricidad (CFE) and Luz - Methane in landfills y Fuerza del Centro (LYFC, this company was - Manure in farms (cows, pigs, etc) declared bankrupt in 2009 and its operations - Water treatment systems are now handled by CFE). However, even if - Gasification activities related to transmission, ? Energy efficiency. Measures can be transformation and distribution, as well as implemented through all stages of energy power sales, are to be exclusively developed by consumption: generation, transfer, CFE, since 1992 the Electric Energy Public distribution and end use. Service Law (LSPEE) considers other ? Cogeneration mechanisms such as cogeneration, ? Bio-fuels Independent Power Production, Small production and self supply, and exporting and According to CFE Project Development Plan, importing schemes, which are not exclusive to between 2007 and 2015, CFE will install and the state agencies (718 out of 770 of these start operation of 3,160 MW for public services permits are held by the private sector). with renewable sources such as the following: 2,390 MW hydro, 158 MW geothermal, and 25 There are also some specific interconnection MW solar. Additionally 150 MW from mini- contracts for the power projects from hydraulic and biomass will come into operation renewable sources of energy: for self-supply. ? Capacity recognition and energy bank (self-supply) UK Trade & Investment Sector briefing: Renewable Energy opportunities in Mexico These numbers show Mexico?s great potential If you have any questions about the for the generation of green sustainable energy, opportunities listed above, contact the UKTI but given its strategic location, the country also Renewable Energy contacts named in this has the ability to become a key global provider report. Business opportunities aimed of components. In the past few decades, specifically at UK companies are added daily to Mexico has signed 44 free trade agreements UKTI?s website. These leads are sourced by our within Europe, Asia and the Americas. In the staff overseas in British Embassies, High United States- the main destination for Commissions and Consulates, across all sectors Mexican exports- investments in RE will reach and in over 100 markets. $150 billion USD in the next ten years. You can be alerted to business opportunities on Some international companies such as a regular basis by registering on the UKTI Iberdrola, Hyocera and Vientek are already website. Find out more on UKTI?s business established in Mexico and provide services that opportunities service on the UKTI website range from the manufacturing of wind towers, blades and bearings, distribution and assembly of photovoltaic panels, energy-efficient solutions and production of solar heaters to power generation from renewable energies. These and other RE companies have also taken advantage of the following financing opportunities: ? The Infrastructure Investment Fund of BANOBRAS; ? Incentives for generation, such as those provided by the Global Environmental Facility, the UNDP and the World Bank; ? CER?s (Certified Emission Reductions) issued in accordance with the regulations of the Clean Development Mechanism of the Kyoto Protocol; ? VER?s (Voluntary Emission Reductions) issued under voluntary schemes for the reduction of GHGs; and ? Fiscal incentives: The Income Tax Law has an accelerated depreciation rate of 100% in a single tax year for investments in machinery and equipment for RE generation. Mexico?s potential for RE generation and as a key supplier in the distribution chain is still unexploited. This presents great business opportunities to experienced British companies in a wide range of services. The new legislation has set up the path to increase private and international participation in RE projects and provides support to investors. The private sector participation has become a key factor to accomplish the Mexican government?s ambitious goal of providing 25% of the total electric installed capacity through renewable resources by the year 2012. UK Trade & Investment Sector briefing: Renewable Energy opportunities in Mexico Major events and activities UKTI contacts Climate Change and Private Sector Irasema Mendoza + Networking ? CO Head of Energy and Environment 2 Contact: UKTI Energy and Environment Team British Embassy Mexico Email:, Tel. +52 (55) 1670 3234 Email: Time:23 June 2010 (Monterrey, N.L.), 14 July 2010 (Culiacan, Sin.), 12 August 2010 (Jalapa, Ver.), 7 September 2010 (Guadalajara, Jal.), Alejandra Espinosa 28 October 2010 (Cancun, Q.R.) Trade & Investment Officer British Embassy Mexico The Green Expo (Global Renewable Tel. +52 (55) 1670 3274 Environmental & Energy Network) Email: Contact: UKTI Email:, Karim Lara Trade and Investment Research Officer Time: 28-30 September 2010 British Embassy Mexico Tel. +52 (55) 1670 3252 Energy Day 2010 Email: Contact: British Chamber of Commerce Email: Time: September 2010 Congreso Internacional de Transporte Sustentable/ Congreso Latinoamericano de transporte público Contact: UKTI Email:, Time: 4 ? 8 October 2010 Semana Nacional de Energía Solar (Solar Energy Week) Contact: UKTI Email:, Time: October 2010 Find full details of all events in this country and sector on the UKTI website. New export events are added daily to the site and you can register to be alerted to them on a daily, weekly or monthly basis UKTI?s Tradeshow Access Programme (TAP) provides grant support for eligible Small & Medium Sized Enterprises (SME's) to attend trade shows overseas. Find out more about UKTI support for attendance at overseas events UK Trade & Investment Sector briefing: Renewable Energy opportunities in Mexico Next steps - How UKTI can help ? Arranging appointments British companies wishing to develop their ? Organise seminars or other events for business in the Mexican market are advised to you to meet contacts and promote your undertake as much market research and company in the Mexican market planning as possible in the UK. UKTI?s team in Mexico, with its wide local knowledge and This work is available via our Overseas Market experience, can provide a range of services to Introduction Service (OMIS) a chargeable British-based companies wishing to grow their service which assists British-based companies business in global markets. wishing to enter or expand their business in overseas markets. This can include: ? Provision of market information To find out more about commissioning this ? Validated lists of agents/distributors work, or accessing other UKTI services and ? Key market players or potential specialist advice, please visit the UKTI website customers in the Mexican market to find contact details for your local UKTI ? Establishment of interest of such office. contacts in working with you Whereas every effort has been made to ensure that the information given in this document is accurate, neither UK Trade & Investment nor its parent Departments (the Department for Business, Innovation & Skills, and the Foreign & Commonwealth Office), accept liability for any errors, omissions or misleading statements, and no warranty is given or responsibility accepted as to the standing of any individual, firm, company or other organisation mentioned. Published 2010 by UK Trade & Investment. Crown Copyright © UK Trade & Investment Sector briefing: Renewable Energy opportunities in Mexico
Posted: 29 September 2010

See more from Energy Efficiency in Mexico

Expert Views    
Environmental Opportunities in Mexico   By UK Trade & Investment
Renewable Energy Opportunities in Mexico   By UK Trade & Investment
Environment Sector   By UK Trade & Investment
Air Conditioning and Refrigeration Overview   By U.S. Commercial Service
Environmental Sector   By U.S. Commercial Service Mexico
Presenting the contributor