Investment in Mexico’s wind energy plummets 61% in 2021

RIO DE JANEIRO, BRAZIL – The wind energy sector warned that the lack of long-term legal certainty, clear rules, permits and planning have kept investors away.

As a result of president Andrés Manuel López Obrador’s government’s efforts to favor state-owned company Federal Electricity Commission (CFE) over renewable energies, Mexico has registered a 61% drop in investments in wind power plants in 2021.

This was stated on Tuesday by Leopoldo Rodríguez Olivé, president of the Mexican Wind Energy Association (AMDEE) during an online presentation of the Mexico Windpower 2021 Digital Conference.

The entrepreneur pointed out that the country currently has 68 wind power plants with a 7,154 MegaWatts (MW) capacity, equivalent to 3,100 turbines in 14 states, which produce 7% of the electricity generated in the national territory, equivalent to the consumption of 14 million homes.

With these figures, he assured that the emission of 12 million tons of CO2 has been reduced, equivalent to removing 3 million vehicles from circulation.

In this respect, he said that Mexico has the potential to “easily” double its capacity to install electric technology; that is, an investment of US$1.3 billion, as occurred in 2020, but this year only some US$500 million are expected to be invested.

He pointed out that the president’s cancellations of electricity auctions and the reform to the Electricity Industry Law (LIE) have removed long-term legal certainty, clear rules, permit granting and long-term planning from the business sector.

As a result, he pointed out that to date approximately 400 injunctions have been lodged against the LIE by different companies arguing violation of rights acquired after the amendment made by the Executive.

Rodríguez Olivé mentioned that after the energy reform of ex-president Enrique Peña Nieto (2012-2018) was passed, the wind sector has invested US$13,000 million and created 16,000 direct jobs: 56% linked to manufacturing, 34% to construction and 10% to wind farm operation.

For the time being, he said that the installation of wind farms contracted on a long-term basis by the CFE within the 3 auctions of the previous administration is 85% complete and only one mega-project in Oaxaca is still in the process of free and informed consultation with the region’s indigenous peoples.

Ramón Fiestas, president of the Global Wind Energy Council (GWEC) in Latin America, said that global demand for renewable energies has grown while demand for fossil fuels has dropped.

He added that the highest growth in the incorporation of wind energy generation was observed in Latin America in 2020, with 22,000 MW installed.

Ramón Fiestas expects increased capacity development with the construction of more wind farms in the world due to the tightening of environmental policies and countries’ efforts to ensure their energy sovereignty based on renewable sources.

Source: Infobae