Mexico’s New Economic Plan Lacks Energy — Global Issues

by Emilio Godoy (mexico)Friday, January 31, 2025Inter Press Service

Power shortage is among the many foremost obstacles confronted by the financial program of President Claudia Sheinbaum, who has been in workplace since October.

Researcher Luca Ferrari from the Geosciences Heart of the general public Nationwide Autonomous College of Mexico (UNAM) recognized restricted monetary sources and vitality provide as limitations to progress.

“There are budgetary and vitality amount constraints. Elevated industrialization for export will run into vitality shortages or very restricted availability, resulting from vital investments and the place they may come from. We’re in a really precarious vitality state of affairs as a result of we’re depending on fossil fuels and are vitality poor,” he instructed IPS.

Launched on January 13 below the overall title of the Nationwide Industrialization and Shared Prosperity Technique, Plan Mexico (PM) consists of 10 goals, 13 objectives, 2,000 initiatives, and a complete deliberate funding of US$277 billion, which might create 1.5 million new jobs in manufacturing and different sectors.

Among the many plan’s investments, that are seen internally as a partial response to the arrival of ultra-conservative Donald Trump to the U.S. presidency, is an funding by the state-owned Federal Electrical energy Commissionx (CFE) of US$23.4 billion.

Of this, US$12.3 billion will likely be allotted to era, US$7.5 billion to transmission infrastructure, and US$3.6 billion to decentralized photovoltaic manufacturing in houses.

Moreover, the federal government is making ready guidelines for the non-public sector’s renewed participation in electrical energy era, a modality suspended since 2018 to favor CFE and in addition the state-owned Mexican Petroleum (Pemex).

This return would come with, amongst different measures, decrease vitality buy prices for the electrical monopoly and the usage of storage batteries to keep up grid stability.

Because of this, the plan would add 21,893 megawatts (MW) to the nationwide vitality matrix, aiming to succeed in a 37.8% of fresh vitality, up from the present 22.5%. By legislation, CFE controls 54% of the electrical energy market, with the remaining being in non-public fingers.

No less than 17 transmission and distribution initiatives are below research for implementation at an undetermined time, however their growth can be impartial of the brand new PM, which does incorporate a number of initiatives already underway, in addition to new ones.

With a present put in capability of 89,000 MW, in 2024 roughly 63% of electrical energy era trusted fossil fuel, adopted by standard thermoelectricity (6.8%), hydroelectricity (5.9%), wind vitality (5.8%), photo voltaic photovoltaic (5.2%), nuclear (3%), and geothermal (1%).

Renewable sources have an put in capability of 33,517 MW however solely contribute 22.5% of electrical energy.

In December 2023, through the annual local weather summit in Dubai, Mexico joined the World Dedication on Renewables and Power Effectivity, which goals to triple various put in capability and double the vitality effectivity charge by 2030. Thus, the PM would fall wanting the clear era goal.

Gasify, child, gasify

Since December 2018, when Sheinbaum’s predecessor and mentor left-wing populist Andrés Manuel López Obrador took workplace as president, Mexico has pursued the thus far unattained purpose of vitality sovereignty, one among whose results has been the halt of the transition to much less polluting fuels.

Sheinbaum’s new bundle of initiatives continues this mannequin but in addition deviates from its extremes, in what looks like the resurrection of the much-needed vitality transition, in a method marked by obvious contradictions.

For Carlos Asunsolo, supervisor of Analysis and Public Coverage on the non-governmental Mexican Heart for Environmental Regulation (Cemda), Plan Mexico lacks particular particulars, such because the pathways to attain the objectives.

“These are remoted initiatives which may be attention-grabbing. It’s a assertion of intentions, nevertheless it ought to be learn in gentle of different public coverage devices, similar to local weather and transition, together with the necessity to align with a complete vitality coverage,” he analyzed for IPS.

The knowledgeable cited issues about challenge execution situations, their sort, human rights ensures, and transparency.

One of many pillars of PM is selling the relocation (nearshoring) of firms in sectors similar to electronics, excessive expertise, and the automotive trade. That is as a result of alteration of world maritime transport routes, the repercussions of the Russian invasion of Ukraine in 2022, and the commerce dispute between the USA and China.

This part additionally wants vitality and initiatives progress within the development of 100 industrial parks, together with 12 within the Interoceanic Hall of the Isthmus of Tehuantepec (CIIT), a megaproject already underway below the duty of the Ministry of the Navy.

This hall within the southeast of the nation is likely one of the three most essential legacies of the present authorities, together with the Maya Prepare within the southeastern Yucatán Peninsula and the Olmeca refinery within the state of Tabasco, additionally within the southeast. All three are built-in into the brand new PM.

The CIIT entails the development and modernization of three rail routes and three ports between the Pacific coast and the Atlantic Gulf of Mexico.

However these services, which search regional growth within the southeast and the substitution of imports from Asia, require a lot of vitality. Current and deliberate renewable era wouldn’t be sufficient on this space, which might lead Mexico to deepen its dependence on fuel imported from the USA.

Since 2010, the northern neighbor has despatched greater than 18 billion cubic ft (ft3) of fuel to Mexico by way of pipelines. In 2023, Mexico consumed 8.514 billion ft3 each day, of which it imported 6.141 billion from the USA, making it the provider of 72% of all its fuel.

Moreover, the López Obrador administration promoted the Sonora Sustainable Power Plan, which incorporates photovoltaic vitality, lithium exploitation, and electrical automobile manufacturing within the northern state of Sonora, and which is now integrated into Sheinbaum’s PM.

One among its parts is the Puerto Peñasco photovoltaic plant in Sonora, whose first part of 120 MW has been operational since 2023. When accomplished in 2026, it can present 1,000 MW, with a complete funding of $1.6 billion.

For Ferrari, the UNAM researcher, the one chance for extra vitality to maintain the enterprise promise is fuel.

“We’re already in a ridiculously dependent state of affairs. In the USA, manufacturing has stabilized over the previous yr, and it’s prone to fall within the coming years. Gasoline supply to Mexico shouldn’t be assured,” he predicted.

In the meantime, specialist Asunsolo considers it important to query for whom and for what extra vitality is being generated, the scale of the initiatives, and the fueling of consumption, at a time when the local weather disaster is tightening its grip on very weak locations like Mexico.

“There’s a clear wager for CFE, via fuel, and Pemex, via hydrocarbons, to be the principle vitality coverage. We’re solely swapping one downside for one more with the change of supply. If it doesn’t translate into a discount of hydrocarbons, solely era capability is elevated. There’s a complicated message,” emphasised the Cemda knowledgeable.

Because it progresses, the PM won’t solely must face vitality obstacles, in accordance with analysts, however can even must navigate the rising water deficit.

Northern Mexico and components of the middle, south, and southeast have been experiencing a point of drought by January 15, elevating questions on water availability for the massive initiatives outlined within the new industrial plan.

© Inter Press Service (2025) — All Rights ReservedOriginal supply: Inter Press Service

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