Mexico: Energy Resources

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National electrification rate (2008): 97% 

More than 3 million inhabitants, living for the most part in areas difficult to access, still lack electricity.

Energy procedure

It is worth mentioning the following among the actions taken to promote RES:

Plan for Renewable Energies on a large scale of the SENER to install 100MW from wind and 300MW from hybrid installations (generation using mixed renewable sources, or renewable and fossil). 

Action Plan to Remove Obstacles to the Installation of Wind Energy (GEF/PNUD/SENER-IIE) in which the SENER by means of the IIE looks at the development of the Regional Centre of Wind Technology in Ventosa, Oaxaca.

There is the decree, Factors for a Policy to Promote Renewable Energies, to stimulate projects with the CDM in the Framework of the Kyoto Protocol and the drawing up of a National Programme for Rural Electrification by way of RES, in the states of Oaxaca, Veracruz, Guerrero and Chiapas.

In early 2013, the National Energy Strategy, initially sent to congress in 2011, was finally ratified, and is set to introduce a framework for the aggressive expansion of conventional and renewable energy sources. With regard to renewables, the main target is a wide-scale reform of the current legislative framework with regard to electricity use and to better promote renewable capacity development. This will include the introduction of cost-reflectiveness into the highly-subsidised electricity tariff structure, and the consideration of “externalities” in determining the true cost of energy, including carbon emissions and social impacts. Finally, new internal financing mechanisms to incentivise renewables will be developed.

Energy debates

The fragmentation of politics in Mexico has exacted a considerable toll on the process of reform. Not only has debate over reform left the technical arena and become a completely politicized issue, but the constant debate and the lack of control by any single party in the Chamber has undercut any continuity in the energy reform strategy and made it difficult for critical investors to anticipate outcomes.

Moreover, available data shows that public opinion opposes privatization, even private investment in the energy sector. Mexicans who are aware of the existence of reform proposals (a small minority of the public) believe that the essence of the most comprehensive reform is a privatization that will undermine Mexican sovereignty.

Throughout 2009, the government issued and implemented a number of regulations, administrative fiats, and energy policy instruments aimed at promoting EE and increasing the number of RE projects in the country’s installed generation capacity. These include the publication of the National Strategy for the Energy Transition and the Sustainable Use of Energy and the Program for the Use of Renewable Energies, whereby the following goals have been set for 2012: increasing the participation of RES in the country’s total generation capacity to 7.6% and increasing the participation of RES in the country’s total power generation to a range of 4.5% to 6.6%.

In February 2011, a National Energy Strategy (2011-2025) was sent to congress for ratification.

Energy sources

Total installed electricity capacity (2012) : 52,500 MW

Thermal: 62.4% 

Hydro: 21.9% 

Nuclear: 3.1%

Renewables (other than hydro): 4.2%

Undefined: 8.3%

Total primary energy supply (2009): 174,640 ktoe

Crude Oil: 50.3%

Natural Gas: 27.8%

Oil Products: 6.4%

Biofuels and Waste: 4.8%

Coal and Peat: 4.4%

Renewables (Geothermal, Solar etc.): 3.4%

Nuclear: 1.6%

Hydro-electric: 1.3%

Electricity Exports: -0.05%

Total electricity generation (2011): 257.9 TWh

Total electricity generation (2009): 261.0 TWh

Natural Gas: 53.1%

Oil: 17.6%

Coal and Peat: 11.3%

Hydro-electric: 10.2%

Nuclear: 4.1%

Geothermal: 2.5%

Biofuels: 1.0%

Wind: 0.2%

Mexico has a single nuclear power plant, the 1,400 MW nuclear reactor, “Laguna Verde” which is operated by CFE. The general trend in thermal generation is a decline in petroleum-based fuels and a growth in natural gas and coal. Given that Mexico is a net importer of natural gas, higher levels of natural gas consumption (i.e. for power generation) are likely to depend upon higher imports from either the United States or via liquefied natural gas.

The national consumption of electricity reached 201.1 TWh in 2009. The residential sector took 49.21 TWh. The commercial and public services sector demand rose to 21.40 TWh/year, or 10.6% of the total electricity consumption of the country. Industry is the main consumer and can be divided into large industries and medium-sized businesses. The latter are authorized to produce their electricity supply. Of the government installed power plants, 58.2% were thermal plants and 28.8% hydraulic.

In 2008 primary energy production was 10,522 PJ, oil-generated (89.9%), hydraulic energy (4.4%), biomass (3.3%) and coal (2.4%). Mexico’s primary energy structure is made up of coal, oil (crude and condensed), natural gas, nuclear energy, hydraulic, geothermic wind and biomass (bagasse of sugar cane, wood and forest waste). The main secondary energies are coke and the liquid gases from oil, gasoline, naphtha, kerosene, diesel, gasoil, dry gas and electricity.

The state company Petroleos Mexicanos (PEMEX) is the sole producer of the oil and gas resources largely found in the sea of the Gulf of Mexico and the coastal land areas adjacent to the Gulf. Only the deposits, where 68% of the known resources lie, are being exploited. Between 2000 and 2004, the average annual oil production (crude, naphtha and condensed) was more than 3000 barrels a day. From 2005 onwards there was a slight reduction in crude oil production and in 2008 it was down to 2,793 barrels a day, an 8.3% drop on that recorded in the previous year. At the current rate of production the known reserves of crude oil will be exhausted in 9.2 years and those of natural gas in 9.7 years time.

Regulatory roles

According to the Renewable Energy Law, CRE is responsible for developing rules and norms regarding the implementation of the Renewable Energy Law, including provisions for promotion, production, purchase and exchange of electricity from renewable sources. CRE, in coordination with the Secretary of Finance (SCHP) and SENER, will determine the price that suppliers will pay to the renewable energy generators. Payments will be based on technology and geographic location. In addition, CRE will set rules for contracting between energy generators and suppliers, obliging the latter to establish long-term contracts from renewable sources.

Competition

The 1992 reform of the Power Public Services Law carried out a partial liberalization of the Mexican electricity sector. It modified the regulatory framework in order to favour new investors. The reform permitted the private sector to generate electricity under six new modalities, and stipulated that electricity generated under these six modalities would not be considered as a public service avoiding thus a contradiction with Constitutional Article 27, which concedes the Mexican Nation exclusive title to generate electricity. The modalities defined by the Power Public Services Law are: self-supply, cogeneration, small production, independent production, export, and import.

In 2006 the private sector participation had increased from 30.4% to 35%. The increments for each modality were: independent production 22.8%; self-supply 6%; cogeneration 3%; and export 2.7%. Control over activities of transmission, transformation and distribution of electricity were kept by the Comision Federal de Electricidad and Luz y Fuerza del Centro that are both state-owned companies. As of mid-2012, private generators (known as Productores Independientes Energia (PIE)), held about 12.2 GW of generating capacity, mainly in the form of combined-cycle gas turbines.

Energy efficiency

The energy-intensity for Mexico in 2004 was fairly average with 11 MJ/US$2000. The energy consumption for transport and buildings per capita was 16 and 9 GJ/capita in 2004 respectively. The potential for EE improvement is especially large for buildings: 43% in 2030. This is a savings potential of 700 PJ in 2030 in comparison to reference energy demand. The estimated energy savings potential for road transport is 39% (or 1500 PJ) in 2030, and for fossil-fired power generation 20% (or 900 PJ) in 2030. By implementing CHP, energy savings are estimated to be possible of around 400 PJ in 2030. In 2009, total primary energy consumption per capita was 1.63 ktoe, with electricity consumption per capita reaching 2,026 kWh.

With the adoption of the Law on Sustainable Energy Use (Ley Para el Aprovechamiento Sustentable de la Energía) in 2008 and its implementing Regulation (Reglamento de la Ley para el Aprovechamiento Sustentable de la Energía) in 2009, Mexico has also now approved broad-based EE labelling requirements as well as the outline of a voluntary product certification programme. Although the catalogue of products covered by the new EE labeling requirements has not yet been developed, it will undoubtedly include many, if not all, electronics.

In November 2009, the government adopted an energy savings programme (PRONASE), for the period 2009-2012. It estimates the energy savings potential at 2% in 2012 and 18% in 2030, compared with a reference scenario. The plan identifies seven priorities: road transport vehicles, lighting, household appliances, cogeneration, electric motors, energy efficiency standards for new buildings, and water distribution.

Industry

Electric Power Savings Trust Fund (FIDE): Low-interest loans for EE improvements (2007-2012).

National Commission for the Efficient Use of Energy (CONUEE): support to SMEs – tools, guidelines and assistance for EE measures.

The Programa Nacional para el Aprovechamiento Sustentable de la Energia (2009-2012) - cogeneration, set standards and substitution of inefficient electric motors.

Energy audits and corrective measures.

Energy management and certifications .

Utilities

Regulation of billing and information to customers.

Transport

Fuel economy standards for new and imported used vehicles.

Clean Technology Fund (CTF): urban transport plan.

Residential

Mandatory Minimum Energy Performance Standards (MEPS) and labels.

Voluntary FIDE label, which aims to cover 7700 products by 2012.

Green Mortgage Program: Preferential loans for energy-efficient homes.

Building code for commercial buildings.

EE programmes: Daylight Saving Time, EE standards, massive CFL substitution programme and FIDE (2007-2012).

Public

Law for the Sustainable Use of Energy.

CONUEE, autonomous body from Energy Secretariat.

Training of specialists, educational programs and capacity building for EE.

Pilot and demonstration programs for new technologies, e.g. CFLs and LEDs.

Public EE purchasing policy.

Energy saving programme for Federal Public Administration (2007-2012).

EE protocol: Integral assessment, goals, resources and monitoring (from 2012) for federal buildings, vehicles, industrial facilities.

Capacity concerns

High growth in demand for electricity is narrowing the gap with available power supply, and the various stopgap measures adopted to attract investment (and delay closure of old plants), are running out of steam. Even budgets to maintain old plants have been slashed. Although it is difficult to assess, the competitiveness of the country is probably harmed, perhaps substantially, by the continued gridlock.

Government agencies

National Commission for Energy Conservation (Comisión Nacional para el Uso Eficiente Energía – CONUEE). http://www.conae.gob.mx/

Trust for Electricity Savings (Fideicomiso para el Ahorro de Energía Eléctrica – FIDE) http://www.fide.org.mx/

Instituto de Investigaciones Eléctricas (IEE) http://www.iie.org.mx/

The Secretary for the Environment and Natural Resources (SEMARNAT), who draws up environmental and natural resource conservation policies. http://www.semarnat.gog.mx/

The Secretary for Social Development (SEDESOL), who promotes projects for the exploitation of renewable energies. http://www.sedesol.gob.mx/

Energy regulation role

The Mexican electrical system is co-ordinated by the Secretariat for Energy (SENER), the Regulatory Board for Energy (CRE), and the National Board for the Efficient Use of Energy (CONUEE). 

The SENER is the body dependent of the Federal Government and in charge of co-ordinating the national energy policy. The function of the CRE is to regulate private participation in the electrical and natural gas sectors. 

The CONUEE has the goal of fostering energy savings and efficiency and promoting renewable energies.

Ownership

Electricity market

Mexico's electricity sector is controlled by the state-owned company Comisión Federal de Electricidad (CFE, www.cfe.gob.mx), which generates and sells electricity across the whole country after the other state-owned utility Luz y Fuerza del Centro (LYFC), responsible for producing and selling electricity only in Mexico City's metropolitan area, was closed down by the Government on October 11, 2009. The tasks of LYFC were absorbed by CFE.

Private sector involvement is limited and began in the late 1990s, when CFE developed an Independent Power Producer (IPP) scheme, whereby private companies build and operate plants and sell 100% of the generated power back to CFE. Another scheme is the Self-Consumption Scheme, in which IPPs are allowed to generate energy for their own consumption, with the possibility of selling any excess capacity to CFE or to clients outside Mexico. Currently, many international companies are now participating as IPPs: Mitsubishi, Intergen, AEC, Iberdrola, Transalta, Union Fenosa, etc. Between 1997 and 2009, CRE had awarded 22 permits for Independent Power Producers (IPP), a total of 13 GW. 

All the major hydro-electric facilities are owned and operated by CFE. CFE also operates 15 plants in the 20 to 60 MW range, accounting for a capacity of 685 MW, and 37 plants under 20 MW, with a capacity of 285 MW. The only privately owned hydro-electric plant is the 6 MW El Plantanal, operated by SKF Sverige AB.

Oil and natural gas market

The state-owned oil company Petróleos Mexicanos (PEMEX, www.pemex.com) retains exclusive rights to oil exploration and production on Mexican soil. Foreign participation in the upstream sector is limited to service and performance contract arrangements and turnkey drilling contracts. PEMEX holds a monopoly on natural gas exploration and production. However, there is some private participation in ancillary services that support PEMEX operations. The government opened the downstream natural gas sector to private operators in 1995, though no single company may participate in more than one industry function (transportation, storage, or distribution). It also created the Energy Regulatory Commission (CRE) to monitor the sector. CRE has awarded permits for natural gas distribution to Gas Natural, Tractebel, Gaz de France, Sempra Energy, Kinder Morgan, TXUEnergy, Grupo Diavaz, and Grupo Imperial.

Degree of independence

Section 1 of the Law of the CRE provides that it is a decentralized body of the Secretariat Energy, and is technically and operatively autonomous. The Commission Board is composed of one chairman and four members who are nominated by the Energy Minister and appointed by the President of Mexico. The commissioners are appointed for overlapping five-year terms, with the possibility of extension on ratification by the government.

Energy debates

Prospectiva del Sector Eléctrico 2010-2025

Available at: http://www.sener.gob.mx/res/PE_y_DT/pub/SECTOR_ELECTRICO.pdf 

Energy framework

The National Development Plan 2007–2012 sets the rational and sustainable use of natural resources and the progressive diminution of greenhouse effect gas emissions as a priority goal. The energy policy of Mexico aims to secure supply of energy, to diversify primary energy sources, reducing their environmental impact and to improve the efficiency and competitiveness of public companies. The installation of the most developed RE (hydraulic, biomass, wind and sun) in the shortest possible time is considered essential to obtain these goals.

The National Development Plan 2013-2018 is currently being drafted by the government. Key points will include establishing indicators to measure the effectiveness of the government in all sectors of the economy, and measures to improve the democratisation of national productivity.

On the 27th June 2007 in the official federal bulletin, the contract for interconnection to solar energy on a small scale was published. It is applicable to all solar energy generators with capacity equal to or less than 30 kW. The Law for the Promotion and Development of Bioenergies passed in February 2008, encourages the use of ethanol and other liquid bio-carburets.

In November 2008, the Renewable Energy Development and Financing for Energy Transition Law was passed (the Renewable Energy Law). The Bill mandated SENER to produce a National Strategy for Energy Transition and Sustainable Energy Use and a Special Programme for Renewable Energy. The main objective of the Law is to regulate the use of RES and clean technology, as well as to establish a national strategy and financing instruments to allow Mexico to scale-up electricity generation based on renewable resources. SENER and CRE are responsible for defining those mechanisms and establishing legal instruments to allow the increase of renewable power generation.

In November 2008, the Sustainable Use/Energy Efficiency Law was approved. Its objective is to provide incentives for the sustainable use of energy in all processes and activities related to its exploitation, production, transformation, distribution and consumption, including EE measures. More specifically, the law proposes:

The creation of the Programa Nacional para el Uso Sustentable de la Energía, which targets energy efficiency. The Programme focuses on electricity consumption activities in the industrial, residential, commercial and public sectors (e.g. replacement of appliances, old refrigerators, and incandescent bulbs by CFLs, EE investments in municipalities, industrial motors EE, cogeneration in the cement, steel and iron industries, water pumping EE, etc.). 

The establishment of the Comisión Nacional para el Uso Eficiente de la Energía (CONUEE) as a decentralized body of SENER that (i) will advise the National Public Administration and (ii) promote the implementation of best practices related to EE. The Commission replaces the former Comisión Nacional para el Ahorro de Energía (CONAE), which has been the leading government EE body. 

The creation of a Consejo Consultivo para el Aprovechamiento Sustentable de la Energía as part of the above mentioned Commission to evaluate the compliance of objectives, strategies, actions and goals of the programme. This Council will consist of the Minister of Finance and six researchers with extensive experience in the area. 

The creation of the Subsistema Nacional de Informacion on EE to register, organize, update and disseminate information about energy consumption and its end-uses in (i) sectors that use this energy, (ii) distinct geographical regions of the country, as well as examining, (iii) factors that impel these uses and, (iv) indicators of EE.

In this context, the government is carrying out the following activities: (i) a programme aimed at replacing incandescent bulbs (IBs) for Compact Fluorescent Lamps (CFLs) in the residential sector, targeting over 200 million CFLs over a five year period, (ii) an appliances replacement programme targeting more than 5.5 million appliances over a 5-year period, (iii) the modernization of the public transport system for long distances and surroundings, (iv) a programme for EE in municipalities including the substitution of lamps for more efficient public lighting, (v) industrial and commercial EE programs, (vi) supply side EE in the electricity sector, and (vii) EE in PEMEX.

Reliance

In 2007, Mexico produced 173 million tonnes of crude oil, representing 4.4% of the world’s total production. As of 2009, Mexico is a net exporter of crude oil. In 2006, the country exported 99 million tonnes of crude oil. Unless new sources of oil are found, Mexico might become a net oil importer by 2018. Despite its status as one of the world’s largest crude oil exporters, the lack of downstream refining capacity forces the country to be a net importer of refined petroleum products. Approximately 80% of all refined petroleum and 25% of gasoline and diesel fuels are imported from the United States. Petroleum products imports have undergone a marked growth and reached 40% in 2006.

In 2007, the country exported 1.3 TWh of electricity to the United States, while importing 0.6 TWh. Companies have built power plants near the border between both countries with the aim of exporting generation to the United States. The external electricity trade is carried out through nine interconnections between the United States and Mexico and one interconnection with Belize. These connections have been mainly used to import and export electricity during emergencies. There are also plans to connect Mexico with Guatemala and Belize as part of the Central American Interconnection System. The 400 kV interconnection line, Mexico - Guatemala, was commissioned in April 2009 and has an estimated transmission capacity of 200 MW from Mexico to Guatemala and 70 MW in the opposite direction. The grid is part of the project SIEPAC, a power transmission grid which should connect the countries between Mexico and Colombia, bringing them more energy security.

In 2009, Mexico imported 38.712 ktoe of energy, predominantly in refined oil products (24,440 ktoe, 63%). Net electricity exports were 903 GWh.

Role of the government

Energy policy is regulated by the Secretary for Energy (SENER). Its department drew up several laws: the organic law for Federal Public Management, the law for the Regulatory Energy Committee, Internal Regulations for the Energy Secretary, Internal Rulings for the National Committee for the Efficient Use of Energy and the official Mexican regulations with respect to electricity matters, energy efficiency, thermal efficiency natural gas and nuclear safety. Under the SENER, the National Energy Council (Consejo Nacional de Energia, CNE) is responsible for the development of the fifteen-year National Energy Strategy and the production of the yearly revisions to this strategy.

According to the Renewable Energy Law, the following functions are the responsibility of SENER among others: 

(a) defining a national program for ensuring a sustainable energy development both in the short and the longer term, 

(b) creating and coordinating the necessary instruments to enforce the law, 

(c) preparing a national RE inventory, 

(d) establishing a methodology to determine the extent to which RES may contribute to total electricity generation (such a contribution must be expressed in terms of minimum percentages of installed capacity and minimum percentages of electricity, and should take into account different kinds of renewables and regional available sources), 

(e) defining transmission expansion plans to connect power generation from RE to the national grid, and 

(f) promoting the development of RE projects to increase access in rural areas.

Regulatory framework

The new Law for the Development of Renewable Energy and Energy Transition Financing, and Law for the Sustainable Energy Development, enacted in relation to the power sector, promote and regulate RES, clean technologies and EE. Their most important features are:

The state-owned public utilities (including CFE) shall enter into long-term contracts with private power generators using RES (i.e. back-up, power excess sales and others). 

The state-owned public utilities (including CFE) will now be able to award contracts to private companies wanting to produce their own electricity, while excess energy will go into the National Grid using renewable sources and render wheeling, back-up, and other services in accordance with the terms and conditions established by the CRE, as well as receive excess power input from such facilities. 

A governmental Renewable Energy Fund will be created to promote the use of RE and EE, including providing financial guarantees and support.

Moreover, the CRE is now working on a new model, Interconnection Agreement for the interconnection of RE projects to the national grid and a new "postage stamp" methodology to determine the charges payable to the CFE for the wheeling of power generated by RE facilities.

Regulatory barriers

While the new Renewable Energy Law provides the basic framework to scale-up RE in Mexico, substantial secondary legislation is required to define the modalities and mechanisms needed for the implementation of the Law. In this context, SENER and CRE require assistance to (i) define a specific target regarding the renewable capacity and energy which might displace fossil-based generation in the near and long term, and (ii) establish a new set of regulations to implement the Law. 

For example, while the costs of wind generation in Mexico are among the lowest in the world – due to the high-quality wind resources in the Isthmus of Tehuantepec, several factors have inhibited the successful development of the country’s enormous wind resources. Among the barriers for wind and other RES are the excessively low planning prices that CFE assumes for new fossil fuel-based power generation, the lack of recognition for the portfolio effect in power planning that would increase the share of RE interventions based on their lower fuel-risk, and the inability to adjust procurement procedures to the particularities of RE projects. For co-generation and other small-scale projects, new contracting procedures are needed to reduce the risks and transaction costs of small power producers.

Energy regulator

The Energy Regulatory Commission (Comisión Reguladora de Energía – CRE) is in charge of regulating energy and is responsible for granting licenses in the management of activity development in the sector. This control is under federal jurisdiction and looks at technical and economic matters, among which is market stimulation. It was created in 1995. 

http://www.cre.gob.mx/

Renewable energy

Hydropower

This is the most exploited RES in Mexico. At the moment there are some 4,000 dams that generate 19 TWh/year. In 2005, the national hydroelectric potential was estimated at 5.3 GW, of which 3.2 GW corresponded to mini-hydraulic. CRE pointed out that the generation of electrical energy could reach 80 TWh.

In the states of Veracruz and Puebla, the potential rises to 400 MW which can generate nearly 3.5 TWh/year. Chicoasen, the largest hydraulic plant in Mexico, has 2,400 MW power installed and is situated in the state of Chiapas. In March 2007 the plant ‘‘El Cajon’’ began working in the state of Nayarit with 750 MW of power, It was the most polemical project in the history of hydraulic policy in Mexico because of public opposition from the beginning of its construction, for economic, political, social, and environmental reasons. At present, the plant ‘‘La Parota’’ (900 MW) is under construction. Its rejection by ecologist groups has delayed its termination but it is expected that once it is finished it could generate annually 1,529 GWh and avoid 0.94 Mt of CO2 emissions

Wind energy

It is estimated that national wind potential is more than 40 GW. The region of the Isthmus of Tehuantepec is one of the best regions on a world scale for the generation of electricity from the wind. Despite the existence of important resources, wind energy still plays a small part in the electrical sector of the country. The inauguration in 2007 of the first wind farm on a large scale “La Venta II” with 83 MW, was the largest contribution of wind power in Mexico. It is today the wind farm with the greatest power output in the whole of Ibero-America.

In the next years, SENER has planned to install more than 500 MW of wind power in Oaxaca under the IPP scheme which would allow output to reach 590 MW in 2014. Due to the capacity limits that the installation of wind farms in the region could cause, CRE carried out procedures necessary for CFE to construct a high tension line suitable to absorb the electric generation of wind farms in the area with a power around 1–1.5 GW. Up to now, the IPP scheme has facilitated the installation of the first 1.5 GW wind farm in Oaxaca, commissioned in 2010. An additional 22 MW project in Santa Carina began in 2012.

Currently, the wind farms of La Venta III, IV, V, VI and VII (each one of 100 MW), programmed to start operating between 2009 and 2012, are either under tender or at the design stage. With these farms, the Isthmus of Tehuantepec could count on a total 585 MW of wind power installed by the end of 2012.

Mexico installed new wind turbines in the year 2010 (for 104.5 MW of generation capacity).

Solar energy

75% of the territory receives, on average, 5 kWh/m2 a day. The states close to the Pacific Ocean coast are those with the highest radiation reaching 7 kWh/m2 a day, compared with 3 kWh/m2 a day for the rest of the country. In 2006, 839,686 m2 of solar collectors were installed for sanitary hot water and 17,633 kW in photoelectric modules for rural electrification, communications and water pumping. It is expected that in 2013 there will be 25 photoelectric MW available to generate 14 GWh/year.

The most important installation in the country is part of the hybrid, electric, wind, solar, diesel plant in San Juanico (state of Baja California South). It is made up of 17 photovoltaic kW, 100 wind kW and a diesel motor-generator of 80 kW. In Agua Prieta, Sonora, the Government is planning to build a facility that would operate in combination with a natural gas combined cycle plant.

Geothermal energy

Mexico, with its 960 MW of power installed and 7404 MWh/ year, occupies third place in the world for the generation of electrical power from geothermal sources. The known reserves of this resource have been assessed at 1.3 GW and the probable ones at 4.5 GW. The geothermal deposits embrace the full scale of temperatures (high, medium and low). The current exploitation of the high temperature resource is 853 MW and of the medium temperature 107 MW. This energy source has not undergone major development owing to the high cost of the infrastructure and the specialised equipment needed to drill the wells in volcanic rock in extremely hot areas.

Tidal power 

The Autonomous University of Mexico (UNAM) has calculated that in the Sea of Cortes (peninsula of Baja California), it would be possible to obtain a high generation of electricity from tidal energy due to the sea currents in the Canal of Infiernillo and to the hydrothermal vents (faults of distension in the sea bed). At the moment, the country has no electrical plants or projects under development of any kind to make use of tidal energy.

Biomass energy

Bio-energy in Mexico is 3.2% of primary energy consumption. Its main sources are wood and sugar cane bagasse. In 2005 the sugar industry produced 5 million tonnes of sugar and 56 million litres of ethanol. The national production of ethanol began in 1999 in the state of Veracruz. Until 2007 there was no legal framework regarding bio-fuels and the ethanol was destined for the pharmaceutical industry. With the passing in 2008 of the Law for the Promotion and Development of Bio-fuels, the sugar industry had the possibility to produce electricity and ethanol for the electric and self-propulsion sectors.

In 2005, CRE authorized a project of 19 MW to generate 120 GWh/year with biogas, 70 MW to generate 105 GWh/year with sugar cane bagasse and a third one of 224 MW to generate 391 GWh/year with hybrid systems (gas oil–sugar cane bagasse). The assessment of biomass resources available for energy purposes is between 2635 and 3771 PJ a year. Municipal, farming and forest solid waste products, suitable for generating electricity have been estimated at 73 million tonnes. These waste products would allow an installation of 803 MW with an annual production of 4.5 GWh.

The company Bio-energy of Nuevo Leon developed a project of 7 electric MW, pioneering the use of biogas produced by anaerobic digestion of municipal solid waste, which went into operation in September 2003. It is currently being expanded with the aim of reaching 12 MW. The company Monterrey Water and Drainage Services holds two licenses authorized by CRE for the self supply of electrical energy generated from biogas with a total power of 10.8 MW.