The Mexican Government has introduced significant changes to the energy sector in recent years. Mexico has large quantities of natural resources but the most important energy sources used nowadays are fossil fuels. Oil has been a key component of Mexico’s economy, therefore for several years all activities in the sector were focused on traditional technologies based on petroleum products and renewable energy was not a priority. However, there is a strong political will to strengthen the energy policy with the main objective of promoting a transition to a low carbon economy. This new energy policy seeks to achieve a sustainable development and to address new challenges that the country is facing: energy security, climate change and competitiveness.
One of the most important tools that the Government is encouraging to address these concerns is the diversification of primary energy sources. Even if there is not a specific policy for ocean energy systems, renewable energy has had a significant strengthening under President Felipe Calderón administration. Several actions have been implemented in order to reduce the environmental footprint of the energy sector and to increase the use and development of clean technologies. For example, renewable energies now have a specific legal and regulatory framework to foster its development and give certainty to private investments. The Ministry of Energy has the duty to develop a National Strategy for Energy Transition and for the Sustainable Use of Energy that must be reviewed in a yearly basis and a Special Programme for the Development of Renewable Energy that includes targets and goals related to the participation of renewable sources in the domestic energy matrix.
Besides the energy sector, there is also a more active participation of other Government agencies and actors in the promotion of this industry and the conscience and interest in environmental issues is growing among society. The Ministry of Economy is also involved and is looking to strengthen the supply chains to have local production of components and equipments. Economic and fiscal incentives have been applied to increase the interest of private industry to invest in this field. Multiple research centres, universities and educational institutions are integrating capacity building programmes for renewable energy and the National Science and Technology Council has integrated new funding mechanisms and programmes specially oriented to sustainable energy systems. The proposal of a new Innovation Centre for Ocean Energy is being analysed and is expected to be approved early 2012.
Strategy and National Targets
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National Energy Strategy (2009-2024) - Installed capacity for power generation with clean technologies (renewable energy, hydro and nuclear) of 35%.
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Energy Sectoral Programme (2007-2012) - Participation of renewable energy (including hydro) in the energy matrix increase from 23 to 26%.
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Special Programme for the Development of Renewable Energy (2009-2012) - Installed capacity of 7.6% and power generation between 4.5 and 6.6% from the total national generation from renewable sources (not considering large hydro).
Support Initiatives and Market Stimulation Incentives
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National Income Tax Law (Article 40, fraction XII): This law establishes an accelerated depreciation of 100% on investments for renewable electricity generation equipment and machinery as an incentive for taxpayers who make investments in this field. The qualifying equipment includes all items involved in energy production from sun, wind, water, oceans and geothermal resources as well as biomass.
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Zero Tax for Imports and Exports: The pollution control equipment and parts, machinery, equipment, tools, materials, and other articles for research or technological developments are exempt from payment of general import or export tax.
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Interconnection Contract Model for Self Supply from Intermittent Sources of Energy: This contract model incorporates a methodology for self-suppliers to estimate and credit the capacity contribution of renewable energy sources to the national electric system.
Main Public Funding Mechanisms
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Fund for Energy Transition and the Sustainable Use of Energy: This fund was created under the Law for the Development of Renewable Energy and Energy Transition Financing. In the federal budget approved for the fiscal year 2010, 3,000 million pesos (US$200 million) fund was included for the promotion of the use of renewable energy.
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Federal Power Commission (CFE)-CONACYT Fund: This programme was directed for seven types of projects on specific categories, including the creation of energy from sea waves, ocean currents, hydraulic equipment, and nuclear energy, and for measuring gas emissions.
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SENER-CONACYT Sector Fund for Energy Sustainability: The main objective of this fund is to promote scientific research and applied technology as well as adoption, innovation, assimilation and technology development in four areas: i) Renewable energy sources, II) Energy efficiency, III) Use of clean technologies and IV) Diversification of primary energy sources. Resources for this fund will come from a fee equivalent to 0.13% of the value of crude oil and natural gas extracted by PEMEX.
Relevant Legislation and Regulation
The energy reform approved in 2008 enacts the Law for the Development of Renewable Energy and Energy Transition Financing (Ley para el Aprovechamiento de Energías Renovables y el Financiamiento de la Transición Energética). The main objective of this Law is to regulate the use of renewable energy as well as to establish a national strategy and financing instruments to allow Mexico to scale up electricity generation based on renewable energy sources.
The law created the Consultative Council for the Renewable Energy (Consejo Consultivo de las Energías Renovables) to incorporate all the sectors with the Government in the design of public policy. This legal framework set Mexico’s strategy to support policies, programmes, actions and projects that were oriented toward increased usage of renewable energy sources and clean technologies, that promoted energy efficiency and sustainability, and that decreased oil dependency as the main source of energy.
Relevant documents released
Renewable energy is a constant in all the programmes and policies of the Calderon Administration. Some of the relevant documents released in the current administration and related to renewable energy are the following:
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National Development Plan;
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National Infrastructure Programme;
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Energy Sectorial Programme;
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Special Programme for Climate Change;
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National Strategy for Energy Transition and for the Sustainable Use of Energy;
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Special Programme for Renewable Energy Development.
Government Funded R&D
Several R&D funded projects were running during 2011:
Hydrogenerator QK: The National University of Mexico (UNAM) through its IMPULSA Project (Multidisciplinary Research of University Projects for Leadership and Academic Progress) is improving a private design of a floating hydrogenerator named QK. This device transforms the kinetic energy of flowing water into electricity and has been tested in simple channels. Investment: US$ 370,000 (Second phase)
SIBEO: The National University (UNAM) through the Institute of Marine Sciences and Limnology is conducting a project consisting of a pumping system activated by the resonance of the waves, using the OWC technology. Investment: US$ 370,000
Oceanographic review off the coast of Mexico: The National University (UNAM) through the Institute of Marine Sciences and Limnology presented a proposal to develop an Oceanographic review of the coasts of Mexico to assess the potential of the thermal gradient in some regions for its use into air conditioning systems in hotels. Investment: US$148,000
Network of Observations and Predictions of ocean variables (ROPVO) on the coasts and ports of the Gulf of Mexico: Since 2005, the National Polytechnic Institute (IPN) trough the Research Centre for Applied Science and Advanced Technology (CICATA) has been operating four oceanographic stations capable of detecting and monitoring changes in the sea level. The objective of the project is to establish a monitoring system that can led to a prediction method and an assessment of energy potential across the coast and ports of the Southeast of the Gulf. Investment: US$370, 000
Information Recovery and Analysis of wave behaviour: In this project, data analysis of wave behaviour is made with information from several sources (remote and in situ sensors, numerical simulations). Numerical models are also used to simulate and predict the directional wave spectrum. The project focuses on information acquisition and processing techniques. Investment: US$370,000
Wave Energy Potential Assessment in the Baja California Peninsula: This project uses numerical models to simulate waves in different geographical scales with several resolutions in the west coast of Baja California in order to assess the potential of power production in the Peninsula. The results will be used to propose a regionalization of the territory as a function of the wave behaviour and the associated energy potential. The project also includes an analysis of devices to convert wave energy into electricity. Investment: US$148,000
Oceanlinx: Since 2006, the Federal Power Commission (CFE) has been developing with Oceanlinx, a private company of Australia, a joint test of the wave energy converter MK3 in Rosarito, Baja California. Currently, different technologies are being analysed in order to present a proposal for a 500 kW project. Investment: US$148,000
Feasibility analysis of a wave energy power plant in Baja California Sur (BCS): CFE is trying to identify suitable sites to develop wave energy projects in the future. In Cabo Falso, BCS studies such as maritime climate and bathymetry, have been conducted. Investment: US$ 74,000
Wave Energy in the Gulf of California: CFE has been developing oceanographic studies, mathematical modelling, geophysics, tectonics and soil mechanics near the Montague Island and Adair Bay to assess the feasibility of a pilot wave energy power plant in the Gulf of California. Investment: US$ 148,000
Forecasting System: The project includes the development of a numerical forecasting system of waves and tides under normal conditions, storms and heavy seas in Mexico. Investment: US$74,000
Atmospheric characterization: The project consists of the characterization of the atmospheric boundary layer in the coastal zone of the Yucatan Peninsula to assess the offshore wind potential. Investment: US$74,000
Oceanographic buoy: Development of a multisensory oceanographic buoy network to measure several marine and climate variables in order to have a data base and a possible potential assessment. Investment: US$ 74,000
Participation in Collaborative International Projects
THESEUS (Innovative technologies for safer European coasts in a changing climate) is the largest integrated project within coastal risk assessment and mitigation funded by the European Commission and consists of 31 partner institutes from different countries. Mexico participates through the National University (UNAM).The scope of the work is to verify whether there are any possibilities of combining wave energy conversion with coastal protection. The impacts of the project will be focused on reducing technical and non-technical risk in the marine environment as well as reducing the cost per kWh of generated energy, through multipurpose structures designed not only for electricity generation but also for coastal protection. Investment: US$ 10 million
Mexico