Mexico Meeting Clean Energy Goals Could Unleash $17B In US Investment

Washington believes that Mexico could become a significant exporter of electricity generated by renewables

Energía de viento y sol
January 10, 2023 | 02:06 PM

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Mexico City — The US government estimates a direct investment of $17 billion if Mexico meets the goal of 35% of electricity generation with clean energy by 2024, according to a document prepared by the National Renewable Energy Laboratory (NREL).

The US Department of Energy’s research and development center detailed in the Mexico Clean Energy Report the country’s opportunity to generate more than 72,000 full-time jobs.

“Some of the benefits of achieving this goal include: reduction of electricity production costs by $1.1 billion in a business-as-usual scenario; approximately $17 billion in direct investment,” the report concludes.

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The document also highlights the possible diversification of the energy matrix to more areas of Mexico that would increase energy security, and national and regional sustainable energy, in addition to improving air quality and reducing emissions, as well as the electrification of the transportation sector and the reduction of congestion in electricity transmission.

US Secretary of Energy Jennifer Granholm said that the country governed by President Andrés Manuel López Obrador could become a major exporter of clean energy to the United States and Canada.

“As a result, Mexico’s renewable energy could generate high levels of investment,” she wrote on the sidelines of the North American Leaders’ Summit in Mexico City.

The Mexican government presented statistics in 2021 detailing that it will not reach the 2024 goal established in the energy transition law, but a year later it only mentioned that it will achieve the goal, but without presenting the corresponding figures.

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Mexico’s Energy Minister Rocío Nahle has said that the Government put “order” into Mexico’s electricity sector by canceling clean energy auctions and trying to reduce the participation of private companies in the electricity generation sector through administrative changes and a reform to secondary legislation.

In July 2022, the US government initiated consultations with the Mexican government regarding its energy policy for alleged violations to the commitments of the USMCA, the Mexico-US-Canada free trade agreement.

The focus of the consultations are the reform to the Electricity Industry Law; inaction, delays, denials and revocations of energy permits; extensions only for Pemex, and actions on the transportation of natural gas.

In the middle of the process, the Economy Minister Tatiana Clouthier resigned in October, and who said that Nahle “does not want to give in on anything” regarding the consultations, during a conversation with the newspaper La Jornada.

Although the main topics of the Summit are migration, climate change, competitiveness in the region, security and the fight against drug trafficking, State Department spokesperson Kristina Rosales said in an interview with Bloomberg Línea that disagreements on energy issues will continue once the meeting between Joe Biden, Justin Trudeau and López Obrador concludes.