Mexico's leadership on LEDS
Case StudyBuilding a comprehensive national MRV framework
Mexico has shown international leadership in developing legislation, policy and programmes to support its transition to a low carbon economy. A general law on climate change was recently approved and a long term climate change strategy is under implementation, together with a multi-stakeholder approach to develop an institutional MRV framework to support NAMAs and LEDS.
The institutional MRV framework being implemented aims to go beyond simply tracking emission reductions and includes a set of measures, systems and registries to perform policy evaluation, institutional strengthening and ultimately support decision-making. Currently the MRV framework in Mexico consists of several mechanisms, including laws, reporting rules, estimation methodologies, and coordination among different institutions of the public and private sector.
These mechanisms continue to be developed and continuously improved and currently serve as a good example of progress towards a comprehensive national MRV framework.
Case StudyMexico’s national utilities adapt to climate change
Power generation sources (hydro, thermal, solar, wind) are always affected, although to varying degrees (depending on the energy source as well as the region) by changes in the climate. Taking into account the risk associated with climate changes into project identification, planning and implementation are key components to maximizing resilience. Mexico’s national power utility company, owns all three aspects, generation, transmission and distribution of electricity throughout Mexico. Mexico recently adopted a suite of climate-resilient strategies that especially address the vulnerability of the distribution of equipment to extreme weather changes and natural disasters such as storms, floods and earthquakes.
The two methods implemented impact resilience in different ways: (1) better communication with National Meteorology Services and establishing disaster contingency plans improve power restoration times, and (2) stronger foundations to distribution equipment such as transformers could enable power services even in the face of extreme weather conditions.
One of the biggest impacts is the reduction in the power restoration times. Improved structure of electric poles can also lead more resilience during extreme weather conditions. Mexico’s national power utility company has also improved resilience of utilities by developing natural disaster contingency plans and enhancing communications with the National Meteorology Services monitoring center, to be able to better serve their populations.
Case StudyPolicy changes prioritize geothermal energy growth in Mexico
Electricity demand in Mexico is expected to increase at a rate of 3.5% each year. Recently, the government of Mexico has set an ambitious target of reaching 35% clean energy generation by 2024. Mexico has significant untapped geothermal energy resources and is estimated to range in between 5 and 25 gigawatts of untapped conventional and unconventional geothermal resources. Historically, electric power generation, transmission and distribution have been designated exclusively as state activities. However, the comprehensive policy reforms enacted in 2013 by the government of Mexico opened up its energy sector to private investment and have since accelerated the deployment of renewable energy generation technologies. The expectation of this policy change is 900 MW of new geothermal energy generation by 2029.
As a result of this policy reform, Mexico’s Federal Electricity Commission is no longer the monopoly over electricity generation, transmission and distribution. Private and foreign companies are now allowed to openly participate as developers and independent power producers. However, it is still the Ministry of Energy’s responsibility to grant geothermal registrations, permits and licenses. The government has also enacted several other mechanisms to boost investment, which include tax incentives, an exploration risk mitigation insurance product, tradable clean energy certificates, a renewable energy resource atlas and faster permitting via a web portal. Private geothermal power producers are also permitted to bid in electricity auctions or sell their electricity output in wholesale markets.
The most significant impact under Mexico’s Geothermal Energy Act of 2013 is policies that created specific incentives for geothermal deployment through the entrance of private and foreign companies investing in the geothermal technology. As a result additional 900 megawatts (MW) of geothermal energy generation is expected by 2029. Reforms aim to lower electricity costs via competition and to also increase the share of natural gas and clean technologies in the production of electricity. However, some barriers still remain for foreign companies interested in entering Mexico’s geothermal market: uncertainty of long-term prospects, high investment levels and market saturation, to name a few.
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