14 Negocios

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A GREEN GIANT
Investment levels show Mexico is more engaged than ever in the battle to combat climate change.
by Gustavo archiGa

sPeCial feature Green Giant

s host of the 16th United N a t i o n s Fr a m e w o r k Convention on Climate Change (COP16), in 2010, Me x i c o u n de r t o o k a commitment to promote strategies to address climate change. The primary goal of the Convention was to urge the international community to adopt concrete decisions to mitigate the effects of climate change. From a pragmatic standpoint, one of its greatest achievements was to secure political and monetary support to ease adaptation to climate change and to facilitate the transferral of technology and finance projects, especially in developing nations. One year later, Mexico has laid firm foundations for a green future, earmarking over 6.25 billion usd that will be channeled into projects to combat climate change over the coming years. Mexico is a country blessed by nature. We have significant renewable energy resources distributed throughout the entire country, says Sergio Alcocer Martnez, undersecretary of Energy Planning and Technological Development at the Ministry of Energy (SENER). Not only do we have 12,000 kilometers of coastline capable of generating wave, tidal, thermal and salinity gradient or osmotic power but also 20 states in the country have wind power potential and we receive 50% more insolation than countries like Germany, for instance, which are more advanced in

terms of solar energy. Virtually the whole country has geothermal water resources and biomass is another renewable energy we should be exploiting. The move toward cleaner, renewable sources of energy has been coupled with greater awareness of the need to make more efficient use of the energies already at our disposal. For example, under the so called Green Mortgage program introduced by the National Workers Housing Institute Fund (INFONAVIT), some 122,000 houses have been built to incorporate energy saving technologies such as solar water heaters, compact fluorescent lamps and smart windows. Property developers Geo, Homex, Urbi and Grupo Ruba spearhead the program, accounting for almost 30% of these affordable green homes. Another point in Mexicos favor is the credit line granted by the Inter-American Development Bank (IDB) to combat climate change. Since 2008, the Ministry of the Environment and Natural Resources (SEMARNAT) has received a total of 1.2 billion usd from the IDB, which will be channeled into specific projects to address climate change. The IDB loan has also served to bolster confidence among companies with an environmental focus, like Rubenius of Arabia, which specializes in utility efficiency and energy storage solutions. During COP16, Rubenius announced plans

to invest 4 billion usd over seven years to set up an electricity bank in Mexicali, Baja California. In general, Mexicos renewable energies are of very high quality, which facilitates diversification within the industry and the broadening of the production chain, says Alcocer, adding that in Mexico, investors have the certainty of a legal framework and a public utility electricity law that acknowledges and encourages the participation of the private sector in electricity generation activities, be it for self consumption or sale to the Federal Electricity Commission (CFE). Furthermore, Mexico has workers that are highly skilled in the manufacture of components and systems and the assembly of parts for renewable energy products. what the wind is blowing in Another project that makes Mexico a viable player in the green energies business is the Eurus wind farm in Juchitn, Oaxaca. Financed by the Mexican cement company Cemex, Eurus has a capacity of 250 megawatts, enough to meet 25% of the electricity requirements of Cemexs Mexican operations. Eurus began operating in 2009 and has 167 wind-driven generators, making it the largest wind farm in Latin America to date. Oaxaca is one of the states with the greatest potential in that respect, with average wind speeds capable of generating up to 5,000 megawatts a year, enough to light up a city the size of Paris.

16 Negocios

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MExICOS GREEN FEATS

Much of the progress Mexico has made in the battle to address climate change can be attributed to the drawing up of a regulatory framework and projects implemented by states and municipalities, many of which enjoy the backing of the private sector. For instance, the federal government has implemented the lines of action of the 2011 National Strategy for Energy Transition and Sustainable Energy Use and introduced laws for the development of renewable energies and financing mechanisms as part of a long term plan to ensure that the country is producing sufficient energy using efficient, environmentally sustainable methods by 2024. In addition to anticipating the depletion of oil reserves, diversifying energy sources, encouraging more efficient energy use and reducing the environmental impact, the regulatory framework is built around the development of new technologies and human capital within the industry and aims to grant marginalized sectors of the population access to competitively priced sources of energy.

It is estimated that Eurus will soon be generating enough electricity to supply a city of half a million inhabitants, preventing some 600,000 tons of CO2 approximately 25% of total emissions generated by a city of that size from entering the atmosphere each year. According to data furnished by the Ministry of Energy, as of 2010, Mexico had an installed capacity in the region of 500 megawatts, including both government and private sector wind energy projects. However, an estimated 5.5 billion usd will be channeled into similar projects with a view to pushing that figure up to 2,200 megawatts by 2012, with wind generated electricity accounting for 4% of total installed capacity by the end of the current government administration. The pressing need for new paradigms in the search for environmental sustainability continues to fuel renewable energy and other green initiatives. For instance, the North American Development Bank (NADB) has announced that it has 450 million usd in capital and

another 3 billion in green credit lines up for grabs and that it will be promoting the use of renewable energies on the Mexico-US border. Baja California and Tamaulipas are contenders for wind energy projects, while Sonora and Chihuahua could well catch the solar power fever that is going round. In the meantime, investment mainly in wind and geothermal energy projects continues to increase, more than quadrupling to 2.32 billion usd last year compared to 2009, according to a report published by the UN Environmental Program (UNEP). That is partly because Mexicos authorities aim to raise the use of renewable energies as a percentage of all energy utilized from 3.3%, where it currently stands, to 7.6% by 2012, mirroring the global trend in which developing countries are gaining an edge over developed ones in the use of fossil fuel alternatives. The point is that reducing CO2 emissions will become increasingly important, which puts pressure on clean energies to be more

cost competitive compared to gas, for example, which is the cheapest fuel, says Alcocer. In the renewable fuels race, wind energy takes the green star, although solar energy also has the potential to overtake countries that are presently light years ahead of Mexico in the development of such technologies. Insolation averages 6 kilowatts per hour per square meter (kWh/m2) in the Mexican states of Sonora, Durango, Chihuahua, Baja California and Baja California Sur alone 50% higher than the mean in several European countries that have invested heavily in solar energy infrastructure. That means that just 25 kilometers of desert have the capacity to generate enough solar energy to meet all of Mexicos electricity needs, according to estimates by Nobel Prizewinner Al Gore. In light of its enormous renewable energy potential and the number of projects already in operation or underway, Mexico is a green beacon for Latin America and the rest of the world. n

sPeCial feature Green Giant

Tail Winds
4%
of the electricity Mexico produces should be windgenerated by year-end 2012, according to government estimates.

5,000
megawatts of electricity could be generated every year in Mexico by harnessing wind energy.

2.32
billion USD have been invested in wind and geothermal energy projects in Mexico.

25
km of Mexicos deserts receive enough solar insolation to meet all the countrys electricity needs, according to estimates by Al Gore.

Wind projects
State-financed 3 Export

In operation (518.63 MW)

Self-sufficiency 30 Independent producer 5

Nuevo Lon

8 Under construction (911.2 MW)

Baja California
Tamaulipas

States with wind projects

Juchitn, Oaxaca.

Jalisco Oaxaca

Chiapas

27 Under development (7039.9 MW)

Eurus Leads the Way

The Eurus wind farm generates enough electricity to cover of Cemexs energy requirements.

25%

Eurus prevents 600,000 tons of CO2 from entering the atmosphere every year.

25% of the total emissions generated by a city of 500,000 inhabitants.

infoGraPhic oldemar

Sources: Mexican Wind Energy Association, IDB, Eurus, UNEP.