Mexico faces challenges in development of renewable power

Mexico has great potential to promote renewable projects thanks to its vast territory. However, it has not yet been able to promote the use of its renewable resources despite great efforts made over the past decade.

The Latin American country has laws and aims to promote the development of renewable energy, but it also faces great challenges as the goal of 35 per cent of generation of electricity from non-fossil sources by the year 2024 seems unattainable for now.

There are also technological limitations that prevent the rapid stimulation of investment and technological modernization in the field of renewable energies.

According to a report by PricewaterhouseCoopers (PwC ), initiatives such as the creation of the system of Certificates of Clean Energy (CCE), which will be operational in two years, would help meet the targets.

There are also plans to expand the nation’s network of overloaded transmission lines to help the interconnection of renewable projects, and there is a greater allocation of public funds for intensifying research in this field. According to analysts, these two efforts could help ensure that the goals set by the law are met.

However, there are those who still doubt the possible concrete results, especially if one takes into account the fact that Mexico will have to install 18 GW of clean energy over the next three years. This aims to reach 2018 with a share of renewables in the energy mix of 24.9 per cent, which would represent a major step towards the goals set by law.

CCEs will be a key instrument to reach the goal of 35 per cent renewable energy by 2024, experts said. They will serve to ensure entry into the electrical system of a particular amount of energy from renewable sources. This requirement has been defined as a “proportion of total electricity consumed in load centres”, which will be defined by law and the amount of which will gradually increase every three years.

This mechanism will also be a market for the sale of certificates for suppliers and users to comply reasonably with the provisions of the regulations, in addition to avoiding high fines that would result in hypothetical violations. If companies fail to achieve the clean energy goals, they can purchase bonds in the secondary market to enable them to meet the requirements of the law.

This will ensure greater incentives for producers of renewable energy. This strategy could result in a substantial reduction in costs that would raise the competitiveness of renewable technologies and attract greater levels of investment in the renewable industry, experts say.

Mexico has already drafted the guidelines as a basis for the design of future CCE market starting in 2018, in addition to setting the 5 per cent requirement for electricity consumption from renewable sources that suppliers, qualified new market users and end users will have to meet.

It is not surprising that more and more voices are demanding greater realization of public policies and the development of new laws aimed at definitely boosting the renewables sector.

Much remains to be done.

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