As the country’s presidential campaigns unfold and candidates Andrés Manuel López Obrador (AMLO), José Antonio Meade, Margarita Zavala and Ricardo Anaya set out to convince the Mexican electorate, dissecting each of the presidential hopefuls’ plans for Mexico’s energy sector is in order.
In 2013, Mexico set the stepping stones of an ambitious energy transition plan, unlocking the country’s electricity market and setting the stage for clean energy to take a larger share of Mexico’s energy mix. Article 133 of Mexico’s constitution states international treaties in line with the latter’s provisions and celebrated by the president are set to be the “Supreme Law of all the Union.” By ratifying the Paris Accords on climate change on Sept. 17, 2016, Mexico’s commitment to mitigating climate change was placed at the highest legislative levels, making its energy transition a constitutional priority. Parallel to that, the three editions of the country’s long-term electricity auctions have proven clean energy sources to be not only environmentally conscious but also business sound. While it seems unlikely that Mexico’s goal of reaching 35 percent of clean sources in the country’s energy matrix by 2024 will be overturned, special attention should be given to the direction the next administration will choose from the first steps walked by incumbent President Peña Nieto’s administration.}
AMLO AND COALITION’S ENERGY PROJECT
AMLO’s coalition—including the left-leaning Labor Party (PT), the candidate’s own Movement of National Regeneration (MORENA) and the Social Encounter Party (PES)—have enshrined their proposals in the candidate’s “Nation Project 2018-24.” It lists several prongs meant to further develop Mexico’s clean energy capacity:
- Developing industrial and service parks to provide modern automation, electronics, biotechnology, water treatment, renewable energy, sustainable environment, digitalization and information technologies and telecommunication industries
- Accelerate technological change to adopt renewable energy, work on public policies to reduce energy consumption and foster energy efficiency
- Capitalize on renewable energy sources such as geothermal, wind, solar and small-scale hydroelectric plants
- Incentivize electricity self-supply schemes with renewable energy sources
- Decisively propel cogeneration across Mexico’s industries
- Further advance the concept of smart cities
- Democratize energy policy, respect local communities’ decisions and stimulate the strengthening of independent syndicalism
- Foster research, technological development and the required human resources training in the sector
The project includes a detailed plan to take Mexico’s energy transition one step further. The third-time presidential candidate wants renewable energy to gradually substitute the large amounts of natural gas imported from the US to reduce dependency on the northern neighbor for energy, contrasting with CFE’s gasification strategy to provide the baseload required to propel renewable energy. AMLO has also guaranteed no further increases in electricity and natural gas prices, assured that the electric and oil industries will recuperate, assured the rehabilitation of the country’s hydroelectric plants and committed to the thorough examination of power producing contracts to ensure no corruption practices were involved. When AMLO met with former US Vice President Al Gore on March 23, 2018, he stated his intention to work together with Gore to promote the country’s renewable energy.
MEADE ECHOES INCUMBENT ADMINISTRATION
José Antonio Meade is the designated candidate of Peña Nieto’s PRI, Mexico’s Green Party (PVEM) and New Alliance (NA) under the same All For Mexico roof. Build on the milestones achieved in the first years of the Energy Reform is expected to be the guiding principle of Meade’s energy policy.
“Every industrial process that generates heat should be transformed into electricity and any agro-industrial process generating waste be mechanized and capitalized, implying the possibility to modernize our energy matrix and make our cities more sustainable,” Meade says. The presidential hopeful is also set on attracting MX$550 billion in investments to propel clean energy generation and increase renewables’ residential footprint.
ZAVALA’S INDEPENDENT APPROACH
Margarita Zavala’s political program relating to energy includes “fostering the largest infrastructure investment in the country’s history. Capitalizing both on hydrocarbons and propelling the country’s transition to renewable energy sources.” Designed to act as growth motors, the independent candidate wants to rely on the development of a green economy—produce and use technologies to cement Mexico’s renewable and sustainable transition—and a blue economy—enhance the economic growth of Mexico’s coasts and littorals in an orderly and sustainable way.
Zavala also met with Al Gore, where she presented her initiatives to cement Mexico’s leadership in the use and production of renewable energy. These include increasing investments in environmentally-friendly technologies, creating fiscal incentives for renewables and a Green Infrastructure Fund and developing compact, connected and sustainable cities.
ANAYA’S FORWARD FRONT FOR MEXICO AND ENERGY
Candidate Ricardo Anaya’s political platform is cemented on five pillars:
- Transforming Mexico’s political regime and propel civil democracy
- Total and frontal combat against corruption and impunity
- The pacification of the country, with security, respect of human rights and justice for everyone
- The necessity of an economic development through growth, social inclusion and sustainability
- Strengthening Mexico’s position in the world
Anaya’s coalition placed energy under the fourth pillar, where an “economy for inclusion and wellness” must be focused on fostering the development and injection of clean energy and renewables in the country’s energy matrix. It also includes the environment and sustainable development by stressing the necessity of “realizing important efforts for alternative, clean and renewable energy sources to sustain their own technological development.” Given the candidate’s support of the Energy Reform dating back to his parliamentary tenure, expectations are the sector will continue to develop along the same lines of the incumbent administration.
As AMLO unveiled his plan to construct more refineries in Mexico, consistent with his energy security vision by decreasing the country’s hydrocarbons imports, Anaya criticized the idea by highlighting that the popularity of electric vehicles will bring cost-parity with gasoline-fueled vehicles by 2024.
During Anaya’s meeting with Al Gore on March 23, 2018, the presidential candidate stated he wants to establish a carbon pricing system and its inherent market, generate a transformation strategy toward electromobility, stop subsidizing hydrocarbons, assign part of what is collected from carbon taxes to mitigation projects and develop strategies for climate financing. Standing in front of Mexico’s banking sector during the 81st Banking Convention on March 8, Anaya was quoted as saying, “We must bet on cleaner, renewable energy.”
Human Capital and National Content
While AMLO’s platform is, so far, the only one to mention the necessity of preparing qualified professionals to address the country’s energy requirements, it remains unclear as to how the competing political platforms will tackle this sizable issue, whereas Mexico’s academia is taking steps to start providing programs to provide this direly required human capital, such as IPN’s energy engineering career, ITESM’s online Master’s Program on Energy Management and its Renewable Sources and ELD’s energy law post-graduate program, among others.
The candidates’ plans to develop Mexico’s local energy sector value chain—its renewable energy component in particular—also remains up in the air as no presidential hopeful has yet to present an outline to Mexico’s electorate.
Mexico’s energy regulator expressed confidence that continuity will reign and build on the milestones achieved throughout 2017. In an interview with Mexico Energy Review 2018, Guillermo García, President Commissioner of CRE, stated that, “Looking back, the most uncertain period in the country’s recent history was last year’s US presidential elections. One month later, we witnessed the success of Round 1.4, the deepwater chapter, which included participation from major US companies such as ExxonMobil and Chevron. This experience tells us that the business world is above political discourse or alignments. As long as the rules are clear, transparent and foster open participation, business will continue and investments will pour in.”