As a result of the Energy Reform Act of 2014, Mexico has become more appealing to foreign investors, and the country’s potential for renewable energy has not been overlooked. Mexico is one of the leading countries in terms of installed capacity of geothermal energy, and wind and solar are showing strong growth rates. The country also enjoys abundant sunshine, with solar energy potential higher than 5 kWh/m per day.
Mexico now has one of the most ambitious goals for renewable energy in the world. The Renewable Energies Exploit and Energy Transition Financing Law (Ley para el Aprovechamiento de Energías Renovables y el Financiamiento de la Transición Energética or LAERFTE) stipulates that 35 percent of the nation’s electricity will come from non-fossil fuels by 2024.
Potential Renewal Resources in Mexico by 2030
*SENER/Electrical Research Institute (IIE)
In accordance with the Power Industry Law — a part of the Energy Reform Act of 2014 — public and private power industry infrastructure projects must achieve sustainability for the areas that are planned to be developed.
Any party interested in carrying out energy projects must submit before the Ministry of Energy an assessment of the social impact caused by the performance of such project as well as its mitigation measures in order to obtain necessary permissions or authorizations.
In this regard, the Ministry of Energy will establish during the first quarter of every year, the terms required to receive a Clean Energy Certification. These terms may increase in the following years. It is possible to relocate this Certification, granted by the Energy Regulatory Commission to any other period, allowing for the transfer of excess or missing certificates, which will promote price stability.
Accelerated depreciation: Investments in machinery and equipment for the energy production derived from renewable energy will be fully depreciated in a 12-month period. This applies to solar, wind, hydraulic kinetic and potential energy, power derived from the oceans, geothermal, and from biomass or residues.
Exempt duty: The polluting equipment and its parts will be exempt from the Import and Export General Tax.
CONACYT – This is a program scheme created to provide resources for those companies interested in R&D investment, technology and innovation development to create new products, procedures or services. There are three types of approaches:
FIDE – Private Trust, founded in 1990, based on the Federal Electricity Commission (Comisión Federal de Electricidad or CFE) initiative, which aims to fund energy efficiency projects, electrical and thermal energy programs, cogeneration and distributed production with renewable sources for industries, businesses, services and housing. This trust has two different categories:
FOTEASE (Fund for Energy Transition and Sustainable Exploit of Energy) – A fund created to promote the use, development and investment in renewable energy and energy efficiency. Last year, an amount of Mexican peso (MXN)1,000,000,000 was granted by the Federal Government to support energy efficiency and renewable energy.
One-Stop Window for Renewable Energy – Its main purpose is to contribute to the promotion of investment in renewable energy projects through the simplification of requirements and the administrative process. It is a mechanism created to increase the installed capacity of electricity generation through the automation of involved processes.
Preferential rate – It consists in a lower service charge for the transmission of renewable energy; the normal energy rate is 0.30 MXN/kWh and a 0.14 MXN/kWh rate will apply in the first mentioned cases.
Energy bank – This tool will allow the conservation of excess energy produced by the supplier for its future consumption or potential sale to the CFE.Net Metering – In scale projects of 30kWp, the electricity cost for energy delivered to the national grid will be offset.
Integrated Energy Services Program – seeks to provide to the Federal Public Administration buildings (Administración Pública Federal or APF) self-supply capacity for electricity through renewable energy, thereby reducing the cost for operation and site maintenance.
Mini-hydroelectric projects – promotes the use of technologies for the exploitation of renewable energy; the use of clean technologies in the development of productive activities; and the diversification of primary energy sources that include renewables.
Program of productive activities with renewable energy in rural areas – supports rural electrification with technical and economic activities that use renewable energy.