A new report from the International Energy Agency has highlighted the potential revitalization of the Mexican energy sector thanks to the massive energy reform initiated in 2013.
The International Energy Agency (IEA) believes Mexico’s Reforma Energética (Energy Reform) will reverse the country’s declining oil production, increase its share of renewable energy in the power sector, and slow the escalating growth in carbon emissions. The report, Mexico Energy Outlook, states that the country’s “energy sector is in a period of profound change” due to the comprehensive Energy Reform the government introduced in 2013.
According to the report’s authors, Mexico’s Reforma Energética came into being because the government had recognized its energy sector was heading in the wrong direction. As such, the country’s energy sector is being completely reshaped — Petróleos Mexicanos (PEMEX) will no longer have such monopoly over the country’s oil and gas, while the Comisión Federal de Electricidad (CFE) will lose its dominance over the electricity sector. As a result, Mexico’s electricity sector will now be open to new players, new investments, and new technologies.
“This is not a reform, it’s a revolution on an unprecedented scale,” said Dr Fatih Birol, the executive director of the IEA. “This transformation touches every sector of the Mexican energy industry and goes well beyond. However, let’s not underestimate the task ahead. It is a huge undertaking and there will be challenges but the reform has made remarkable progress. The government’s path forward is the right one and the IEA stands ready to assist.”
Already changes are being wrought: Mexico’s total oil production, which had hitherto been in the middle of a sharp decline, is projected to right itself around 2020, rising to 3.4 mb/d by 2040. Further, and of more relevance to readers of CleanTechnica, the IEA report also found that Mexico’s ‘innovative’ energy auction system is providing a substantial boost to the country’s renewable energy sector and its efforts to increase capacity. The report claims that more than half of Mexico’s new power generation capacity set to be installed through to 2040 is to be renewable energy-based.
The role played by renewable energy will be vital in the larger picture of scaling up the country’s investment, with $10 billion needed annually to meet an expected 85% increase in electricity demand through to 2040.
The report provides a further analysis and assessment of the current Reforma Energética, as well as an outlook through 2040.
“The Mexico Energy Outlook motivates us to continue in the path traced by the Energy Reform and to double our efforts,” explained Pedro Joaquín Coldwell, Mexico’s Secretary of Energy. “The challenge for Mexico is to turn into reality the positive predictions presented by the IEA. The report includes some very convincing findings on what Mexico would have faced if the reform has never been enacted.”