Prospects for Renewable Energy in Mexico: International Renewable Energy Agency, May 2015

● Mexico has a large and diverse renewable energy resource base. Given the right mix of policies, Mexico

has the potential to attract large-scale investment in renewables that can help diversify its energy

supply. Increased renewable energy use would also set Mexico on a pathway toward significantly

reducing its greenhouse gas (GHG) emissions. However, development has been limited to date.

 

● Under current plans, the share of modern renewable energy in total final energy consumption (TFEC) is

forecast to increase from 4.4% in 2010 (base year of this analysis) to 10% in 2030.

According to REmap 2030, Mexico has the potential to increase this share to 21% by 2030. This implies

a threefold growth in total renewable energy use in absolute terms from 0.5 exajoules (EJ) to 1.5 EJ in 2010-30.

 

● By 2030, Mexico could generate up to 46% of its electricity each year, or 280 terawatt-hours (TWh),

from renewable sources. This compares with 18% using business-as-usual developments (116 TWh/

year). To achieve a 46% share of renewables in electricity generation, the country is likely to see the

greatest deployment in wind (30 gigawatts (GW)) and solar photovoltaic (PV) (30 GW). Together

these could account for 26% of total power generation in 2030. Small and large hydropower (26 GW)

could contribute 12% of total power generation, with geothermal energy supplying 5% (4.5 GW) and

biomass 2.5% (4 GW).

 

● If renewables uptake were accelerated, all traditional uses of biomass for cooking or heating in the

buildings sector would be replaced by modern forms of renewable energy. Total biomass consumption

in all end-use sectors for heating or as transport fuels could reach 685 petajoules (PJ) by 2030. This

represents more than one third of total renewable energy use. Total installed capacity of solar thermal

applications for heating/cooling in buildings and industry would amount to 33 GW, making up almost

one tenth of the country's renewable energy consumption.

 

● Renewables can be an important driver for diversifying Mexico's energy supply. Renewable energy has

the potential to reduce Mexico's total coal demand by 62%, natural gas by 21% and oil by 6% compared

to business as usual to 2030. As a result, total natural gas demand would grow by 115% in 2010-2030

compared to 175% under business as usual.

 

● Accelerating Mexico's uptake of renewable energy could result in savings of 7.2 US dollars (USD) per

megawatt-hour (MWh) compared to the equivalent new capacity with conventional generation. This

saving would equate to 9% of the production cost of natural gas-fired power generation in 2030.

 

● The result of this higher renewable energy uptake is an annual net savings of USD 1.6 billion in Mexico's

total energy system cost by 2030. Meanwhile, if the benefits resulting from lower harm to health

and reduced carbon dioxide (CO2) emissions are taken into account, savings could amount to USD

4.6 billion and 11.6 billion respectively each year.

 

Source: International Renewable Energy Agency: Renewable Energy Prospects – Mexico, May 2015

 

Monty Bannerman

ArcStar Energy

+1-646-402-5076

www.arcstarenergy.com