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In 2011, renewable energy represented 20.3% of the total electrical power generated worldwide. During the same year, global investments in this sector were 257,000 million USD, representing an increase of 17% in comparison to the previous year.
Types of energy2
Wind: The conversion of kinectic energy of the wind energy into mechanical or electrical energy.
Solar: Is the radiant energy emitted by the sun, transformed by two methods:
Hydraulic: Potential or kinetic energy of water transformed into electricity.
Geothermal: Thermal energy produced in the earth’s core.
Biomass: Obtained through animal and vegetable wastes.
Mexico had 14,324 MW of renewable energy installed capacity generation until February 2012.This includes major hydroelectric plants wich represented 22.3% of the total electric generation capacity.3
Wind power potential in Mexico is estimated at 71,000 MW, which is equivalent to cover the 2010 household electricity demand more than three times.4
The energy potential in Mexico is greater than 40,000 MW for electrical and heat applications of geothermal energy and 53,000 MW for hydroelectric plants.2
Mexico is the main supplier of photovoltaic solar modules in Latin America, with an annual production capacity of over 276 MW.5
Some suppliers and project developer companies for renewable power generation in Mexico are: Acciona, Iberdrola, Gamesa, Vestas, EDF Electricite de France, Cannon Power Group, Abengoa, Industrial Power, Sanyo, Kyocera and Vientek.6
Mexico has the goal to increase the share of clean technologies in total generation capacity to 35% in 2024.2
For 2025, it is estimated that renewable power generation installed capacity will increase by 18,716 MW, mainly on wind (60.3%) and hydro power (24.3%).2
Renewable energy plants7
There were 204 opened and under construction plants for electricity generation from renewable sources in Mexico by February 2012. The states with highest number of projects are Oaxaca for wind power and Veracruz for bioenergy.
In 2011, Mexico’s total investment in this sector reached 200 million USD mainly in wind power projects.
From 2007 to 2011 Acciona has installed four wind farms in the state of Oaxaca with a total of 556 MW of installed capacity and almost 1,200 million USD investment. Eurus, one of its plants supplies 25% of CEMEX’s electric energy.
ABENGOA it is building the first hybrid electric generation plant in Agua Prieta, Sonora with an installed capacity of 12 MW by solar power and 466.4 MW by combined cycle.
CANNON Power Group with an investment of 2,500 million USD, this company is developing three wind power farms Baja California, Zacatecas and Quintana Roo. These projects will have an installed capacity of more than 1,000 MW in total.
SANYO has 75 MW of production capacity of photovoltaic modules. This plant is located in Montrerrey city, Nuevo Leon.
Mexico has research centers focused on renewable energy. The most important centers are: the Center for Energy Research at UNAM (CIE), the Institute of Electrical Research (IIE) and the Center for Sustainable Growth Policy, AC.10
According to estimations from Alix Partners in 2012, Mexico is the most competitive country worldwide in terms of manufacturing costs, with approximately 21% less than USA, 11% less than China and 3% less than India.11
In 2011, according to KPMG, Mexico offered 12.9% savings in manufacturing costs of advanced batteries for green energy sector, compared to the USA.12
According to the World Bank, Mexico is ranked 53 in the world for doing business, over the BRICs and leading the TIMBIs.13
Only 9 days and 6 procedures are required to start a new business, which makes this process much easier than in the BRICs.13
In the past decade, the average annual growth rate of engineering graduates in Mexico was 7% which places it above the population growth rate.14 In 2010, the number of engineering graduates in the country totaled approximately 114,000.15
A Message to the Investor
The Mexican territory has an average solar radiation above 5 kWh per meter per day, which ranks it as one of the highest level of irradiance region in the world.16
Mexico is one of the major energy producers in the world from geothermal sources. In February 2012, our country was the 4th leader on this matter with a global share of 8.7%, just behind US (28.7%), Philippines (17.3%) and Indonesia (10.9%).17
In February 2012, Mexico was 2nd place in approved projects by Clean Development Mechanisms Board (CDM) in Latin America. These projects represent 3.51% of global share.18
Mexico is located across the so called “sun belt”, wich places it among the countries with the highest solar power generation potential worldwide.19
To encourage private participation in power generation through renewable sources, the Energy Regulatory Commission (CRE) issues licenses under different schemes like:20
Other schemes for power generation are cogeneration, small production, export and import.
CFE incentives for private power generation are:
México is a safe place for foreign investment. Our country has signed 28 IPPAs (Investment Promotion and Protection Agreements) and DTTs (Double Taxation Treaties) with more than 40 countries.21
Energy Transition and Sustainable Use of Energy Fund2
It supports the energy sector through projects, programs and actions in order to achieve greater use and exploitation of renewable energy sources and clean technologies.
Energy Sustainability SENER-CONACYT
Sectorial Fund 2
It supports institutions of higher education and research centers to promote innovation and scientific and technological research applied to renewable energy, energy efficiency, use of clean technologies and diversification of primary energy sources.
Accelerated depreciation of investments on fixed assets for generation of energy from renewable sources2
It allows 100% depreciation for investments in machinery and equipment for energy generation from renewable sources.
Zero Custom Duties22
It grants exemption from payment of the general tax on the import and export of pollution control equipment and its components. It also includes machinery, equipment, instruments, materials, animals, plants and other articles for research, or technological development related to renewable sources of energy and clean technologies.
Chambers & associations10
1. Source: REN 21
2. Source: SENER
3. Source: CFE/CRE/SENER
4. Source: INEGI/SENER/IEE
5. Source: BNEF/Electronic media
6. Source: AMDEE/BNEF/Electronic media
7. Source: CFE/CRE /Electronic media
8. Source: UNEP/BNEF
9. Source: BNEF/FDI markets/Electronic media
10. Source: Electronic media.
11. Source: AlixPartners 2011
12. Source: KPMG 2012
13. Source: Doing Business, WB 2012
14. 1.4% annual average in the period 2000-2010, INEGI
15. Source: CONACYT
16. Source: SENER/IIE
17. Source: AGM
18. Source: UNFCCC
19. Source: EPIA
20. Source: CRE
21. Source: Ministry of Economy/SHCP
22. Source: SEMARNAT
kWh=kilowatt-hora=1,000 watts per hour
Source: International System of Measurements