Thermal power to dominate Mexico’s energy mix until 2030

Mexico coal
Image by JoeBamz from Pixabay

Coal power capacity in Mexico will likely decrease marginally from 6.02GW in 2020 to 5.67GW in 2030, however thermal power generation will continue to dominate until 2030.

This is according to the latest report from data and analytics company GlobalData, which highlights that Mexico has retracted its initial coal phase-out plan and currently has no phase-out policy in place.

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The report, Mexico Power Market Outlook to 2030, Update 2021 – Market Trends, Regulations, and Competitive Landscape, reveals that thermal power was the major source of power generation in Mexico in 2020 as well.

From this point, thermal power capacity is expected to rise at a compound annual growth rate (CAGR) of 2% from 55.3GW in 2020 to 67.2GW in 2030 and thermal power generation is projected to increase at a CAGR of 0.9% from 251.7TWh in 2020 to 274TWh in 2030.

Rohit Ravetkar, Power Analyst at GlobalData, says: “In 2020, thermal power generation held a share of 76.9% in Mexico’s total generation. Although this share is expected to decline to 63.3% in 2030, thermal power will continue to dominate Mexico’s generation mix.

“In 2017, the country became a member of the Powering Past Coal Alliance, a group of numerous countries, cities, regions, and organizations that aim to accelerate the phase out of coal power. Mexico committed to phase out coal power generation by 2030, however, the new government that came into power in 2018y has promoted the use of thermal power generation. This has led to the slow growth of the renewable sector in Mexico.”

In March 2021, the Mexican Government passed an energy bill that favours government-owned generating plants that run mainly on fossil fuels. Under this new bill, electricity will be bought first from state-owned hydroelectric plants followed by those that run on coal and oil.

Mr Ravetkar concludes: “Steps taken by the Mexican Government such as not raising their targets for reducing CO2 emissions under the Paris Agreement, passing an energy bill that favours electricity generation from fossil fuels and the purchase of two million tons of coal for power generation shows that power generation from fossil fuels is there to stay in the country for a long period of time.

“The government’s lack of support for renewable technologies is expected to reduce the interest and investment of foreign companies in the country’s renewable sector.”

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