Mexico’s Electric Power Sector Reform: the Role of Natural Gas and Renewables

Mexico’s Electric Power Sector Reform:
the Role of Natural Gas and Renewables

The University of Texas at Austin 2016 Energy Week program for Tuesday February 16 will examine “Mexico’s Electric Power Sector Reform: the Role of Natural Gas and Renewables.” The program will bring together policy officials, regulators, service providers, industrial consumers, operators, and finance and legal professionals from both sides of the border who understand the complexity of the electric power industry and the significance of Mexico’s transition to a competitive market. Experts will share lessons learned and discuss common challenges and opportunities.

Mexico’s recently enacted energy reform is intended to foster competitiveness and private investment throughout the electric power sector value chain in order to support economic growth and job creation by delivering competitively priced, reliable, clean, and secure electricity.

Today, Mexico accounts for one-fifth of all energy use in Latin America.  Growth in demand is estimated to result in an increase of installed electric power generating capacity from 64 GW in 2013 to 118 GW in 2030.  More than $16 billion of investments are expected over the next few years, in infrastructure, renewable energy projects, and combined cycle natural gas generation plants.

U.S. natural gas exports to Mexico account for nearly half of the total U.S. natural gas exports and represented approximately 70% of total Mexican imports in 2014. Mexico’s natural gas imports from the U.S. are expected to increase from 2.0 bcf/d to 5.0 bcf/d in 2020.

As of 2013, total renewable energy capacity in Mexico’s power sector was 14.2GW out of 64GW total system capacity; hydropower represented 18% of that total, with wind and geothermal 4% combined. Mexico’s goal of generating 35% of electricity from non-fossil sources by 2024 is considered an important step in achieving its recent COP 21 pledge to cap GHG emissions by 2026 and reduce carbon emissions 51 percent by 2030.

Panelists with legal, regulatory, wind, solar, and energy storage backgrounds will explore the challenges and opportunities facing various sources of renewable energy in Mexico’s newly reformed energy marketplace, and discuss how to address barriers to cross-border trade and expansion as energy industries on both sides of the border continue to evolve.