Mexico's Renewable Energy Ambitions: A Balancing Act

Renew México: Balancing Act

As this country already has natural sources and vast potential toward renewable energy, Mexico is under a complex course toward a greener future. It will meet its renewable energy targets at any price economically and politically to achieve sustainability and independence from foreign energy.

Renewable Energy Landscape in Mexico
Mexico has a good reserve of renewable sources of energy. The most common sources are solar, wind, geothermal, and hydro sources. Mexico being a sunny nation, the scope for harnessing solar energy is quite wide. The northern and central regions provide ideal opportunities. Along the Pacific Coast and in the Isthmus of Tehuantepec, the situation is conducive to wind energy.

Mexico has done far better than what anyone would have expected in bringing renewable energy sources into the national grid in several ways. In 2014, for example, the country developed the Energy Transition Law with the objective of ensuring that at least 35% of the electricity deployed would be clean by 2024 and at least 50% by 2050. Evidence of seriousness to join the fight against climate is in joining the Paris Agreement.

Now, the Mexican government is also gaining foreign investments due to renewable energies. There exists a huge private sector that has been involved in aiding the formation of large solar and wind-scale projects, more so as Mexico has turned out to become a leader in investing in renewable investment in Latin America.

Role of Solar and Wind Energy
Mexico is the pillar of the new renewable energy policy with solar and wind energy. Specifically, growth in solar energy is very high, and this country has already emerged as the biggest capacity in Latin America. The Sonora Desert, given its sunshine resources, has now emerged as a shining hotspot for large-scale solar farms.

There is also an important concentration of wind energy production, mainly in Oaxaca because of the best wind speeds ideal for turbines, and those are being exploited through public and private investments and are generating large powers for national consumption and for export.

But both of these sources of energy are very hard to be incorporated into the national grid. First, these two energies both rely on several fluctuations: sunlight is there for day time and wind energy at particular times; therefore, substantial investment for grid infrastructure plus energy storage systems is a sure requirement for reliable continuous supply.

Political and Economic Tensions
Although promising in renewable energy potential, the energy landscape in Mexico still reflects political and economic strain. During the past two years, the government headed by President Andrés Manuel López Obrador did measures that unsettled investors in the renewable energy sector. His government aimed to strengthen the state utility, Comisión Federal de Electricidad (CFE), while trying to circumscribe private companies' role in the energy sector.

Change in policy has also been characterized by measures to check the growth of renewable energy projects, especially the managed projects by private sector companies. In an attempt to strengthen the role of CFE, the government has been afraid of regulatory reforms that would restrain future investment in renewable energy. Electricity market has been reformed, and this has not been quite favored for the sources of natural gas, which is a source of renewable energy.

Such policy changes, however, are criticized by stakeholders in the home and international sectors of energy: they argue that the limitation of the expansion of renewable energy could undermine sustainability in the country. For instance, companies on the energy business and environmental lobbyists have been whining that without such a system, the government would not effectively meet its stated renewable energy aspirations and help realize global climate intentions.

Mexico Energy Transition and Challenge
Politically, Mexico remains in many ways challenged in its quest toward ensuring renewable energy targets. Some of the challenges that the country is faced with on this long journey to a greener power future include:

Investment Uncertainty: The changing regulatory environment has made the energy market uncertain, affecting foreign and domestic investment in renewable energy projects. Investors seek stability and clear policies when committing large sums to energy projects, and the evolving political landscape has made some cautious about future opportunities.

Upgrading and increased grid infrastructure will be a result of further increasing renewable energy productions. Mexico's power grid is not yet ready to handle the irregular supply of sources of renewable energy. It poses a significant challenge to this investment for developing a smart grid for storing and dispersing renewable energies.

Energy Storage and Reliability: Since the two elements, that is solar and wind energy, are not available all the time, energy storage technologies are critical in ensuring that the energy is available whenever it is demanded. Although Mexico has improved on this aspect, there still exists a need to scale the available energy storage solutions.

As balancing fossil fuels with renewable resources, it is a gigantic oil and gas-producing country; hence, still its economy considerably depends on using fossil fuels. Tackling it by entirely switching to renewable resources without having any interference in economic stability is pretty tough. When the government backs more oil and gas projects, then the state cannot be sure that it's doing well and heading toward targets of renewable energies.

The Path Forward
For Mexico, it is a well-balanced approach in fulfilling renewable energy ambitions. The government has to present support for growing clean energy even as it navigates economic and political hurdles attached to that progress. The agenda must therefore be comprised of transparent and stable policies targeted at encouraging investment in the private sector, as well as issues to be addressed in terms of problems associated with infrastructure on the grid and in terms of storage of energy.

This would create a significant level of coordination between the public and private sectors and international collaboration. Mexico would then be in an excellent position to lead in this global move to clean energy but should take very careful considerations concerning its political, economic, and social realities.

Renewable energy is a key for the future development of Mexico, also for it to become environmentally friendly and economically advanced. Mexico, despite all its odds, boasts of enormous renewable sources and keeps investing in this industry, setting a prospect towards a greener future.

Source: The content is based on general knowledge of Mexico's energy policy, renewable energy developments, and recent political actions surrounding energy reforms.