ACE has an established network of consultants with expertise in Latin America, from Mexico to Central America and South America. While slower than other developing regions, Latin America’s energy transition is underway, with unconventional renewables—namely solar, wind, and geothermal—growing their share in countries’ energy mixes. Chile, Uruguay, and Costa Rica are leading the transition to green energy and have invested heavily in unconventional renewable energy. The push to become carbon-neutral is embraced by most government policies, helping to accelerate the global energy transition. But troubling challenges remain. The region’s dependence on China is at an all-time high as it struggles to move up the value chain. Moreover, COVID-19 has reversed decades of employment gains, forcing millions of Latin Americans into poverty. As economic and social frustration builds, large-scale government projects will be challenging to finance. AMLO and Bolsonaro, the populist leaders from Mexico and Brazil, also use their increased popularity to impose disruptive policies in a vulnerable energy sector.
According to World Data, the total production of electric energy-producing facilities in Mexico is 303 bn kWh. This is 117% of the country’s usage, yet Mexico trades energy with foreign countries. Production, imports, and exports are essential in pure consumption. Natural gas and crude oil are also used as energy sources. As a result, energy demand will increase significantly because energy use in Mexico is still relatively low: electricity use per capita is only 30%, and TPES 40% of the IEA average. Per North American Development Bank, renewable energy will account for almost 4% of gross power production in Cepeda, Coahuila, while the percentage of coal-fired power generation will drop from 90.12% to 86.75%. In addition, Mexico’s industrial sector is one of the largest energy consumers in the country; with the widespread availability of clean energy, companies in diverse sectors can either buy cheaper energy from solar farms or resort to traditional energy generators for their power.
The Lopez Obrador administration repealed the Mexican Energy Market (MEM) through national supreme courts. According to Reforma Electríca, (El País, April 6, 2022), executives will be distributed back to the Comisión Federal de Electricidad (CFE).
As a result, Mexican government-owned power plants will prefer private competitors, squashing the qualified supplier and scheduling programs under MEM. The law establishes that the government must give preference to electricity from government power plants. Additional electricity can be purchased from private wind, solar, and natural gas plants only if demand requires it.
The repeal will give all discretionary powers back to the CFE. Theoretically, under the repeal, CFE’s capabilities will exceed the
Comisión Reguladora de Energía (CRE) as they did before the MEM program.
Background – Before 2013, Mexico’s state-owned energy company, Pemex, controlled Mexico’s energy supply. After energy reform policies in 2014, the Mexico energy market opened to private competition. Despite large reserves, Mexico’s production of gas and oil declined due to a lack of modern technologies and offshore drilling exploration. Where the Mexican government lagged behind, foreign investments took hold, and a new era in energy procurement blossomed.
Before the reform, Mexico closed its energy monopoly to competition, which proved counterproductive to developing infrastructure, improving services, energy pricing, and servicing.
In 1996, Bose was the first company to import energy from the United States to San Luis Rio in Colorado, Sonora, creating a precedent for competitive energy
The Authorization Export Permit (AEP) program under the Department of Energy and the post-NAFTA tri-national agreement was an oasis for maquiladora plants operating adjacent to the Baja
ACE is the only US consulting firm that provides expertise on the energy exchange program for Mexican maquiladoras in both the Baja Norte region and the interior
Mexico’s recent repeal will limit the competition platform—one of the main benefits of deregulation. After the repeal goes into effect, maquiladoras and Mexican-owned companies
According to trade.gov, “Mexico’s National Electric System (Sistema Eléctrico Nacional or SEN) is one of the largest in the Western Hemisphere. It is comprised of nine regions
Maquiladoras and Mexican-owned industries are turning to storage to address their resiliency and demand costs. In 2018, Atlas Clean Energy introduced storage
A viable option is microgrid technology, or an island model, to separate from the grid and end reliance on government energy. ACE can provide modeling and comprehensive studies to determine
Mexico border states are adjacent to the United States and are the primary hubs for maquiladora manufacturing due to easy border-crossing access for
imports and exports. Therefore, there is a higher density of energy consumption in these border regions, coupled with opportunities and issues related to
energy supply and electrical grid resilience.
Statistically, these maquiladoras represent three times as much energy consumption as the non-border Mexican states.
The consumption of energy in these maquila states is an important driver to determine future power plant needs or other energy assets. For instance,
Baja California Norte’s summer deficit is unable to procure the needed energy for its manufacturing plants and residences.
To make matters worse, many energy companies are experiencing rolling blackouts, which affects their supply chain and eventually leads to other
economic issues.
There are over 6,000 energy-intensive maquiladoras spread throughout the US-Mexican border states with a growing demand for uninterrupted energy
distribution, coupled with resiliency and grid stability.
BCN has been experiencing an energy deficit for the past several years, and the crisis continues to worsen, especially during the summer. BCN purchases energy aggressively across
Sonora (SON) is another underserviced region in terms of energy and grid reliability. According to SPG Global, the Mexican government approved over $100 million in solar projects
Chihuahua (CHI) is situated in a prime geographical location due to its proximity to New Mexico and Texas. Both US states are providers of natural gas and
Coahuila (CO) is the largest producer of coal in the country; however, due to legal restrictions, it is not allowed to make use of the energy potential
According to Jorge Gorozpe, Energy Director at the Ministry of Economy and Labor of Nuevo Leon (SEyTNL), “Nuevo Leon doubled its energy production and is now the
Tamaulipas is an important region for logistics and foreign trade. According to its secretary of economic development, Carlos Garcia, Tamaulipas is ranked first in both land and
Atlas works with some of the most reliable scheduling teams in Mexico and the United States, specifically California (CAISO) and Texas (ERCOT). The scheduling platform exports
Atlas is focused on local companies and government institutions in America and abroad. Our specialities ate LATAM and the Mexicain energy market as it continues to deregulate and focus on green energy.
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