In 2018, Mexico took major steps to improve their energy market. More and more countries are recognizing the importance of looking into renewable energy options and finding ways to lessen their impact while encouraging the development of alternative energy for citizens. More countries should follow Mexico’s lead and focus on improving renewable energy; by doing so, Mexico has placed itself in the position of growing as a world leader when it comes to energy reform.
Competition
One of the biggest steps Mexico has taken to set themselves at the forefront of renewable energy efforts is creating a liberalized energy market. By doing so, Mexico is now allowing private companies to invest in its energy market, whether those businesses are domestic or foreign. As these companies begin investing in Mexico’s energy market, more competition will occur, which in turn leads to more innovation. Investors can choose to back anything from oil exploration, natural gas stations for vehicles, or renewable energies to various other energy related investments.
Renewable energy
Mexico’s growing needs for energy are creating opportunities as the market is open for investments in energy, they’re also focusing specifically on renewable and conventional energy. Back in 2012, Mexico passed a law that would increase the amount of energy used from clean sources to 50 percent by 2050. Mexico’s goals are ambitious; half of its goal means it’ll have more wind turbines than Denmark.
In order to meet this goal, Mexico has decided to offer clean energy certificates (CECs), that work with the auction structure to create long-term contracts for investors in its energy market. For CECs, the term is 20 years. Doing so will lead to more stability for the energy market and renewable energy. As further auctions are delayed, companies are increasingly focusing on experienced Mexican qualified suppliers to develop a commercial strategy that makes projects financially viable.
Cost
Because of the current state of renewable energy and the work that’s already been put into it, Mexico’s contributions will continue to help worldwide prices fall. In addition to prices for renewable energy around the world, Mexico’s own market will be stimulated and lead to greater growth across many different sectors.
Mexico’s auction structure for energy has also allowed solar to reach the lowest average price worldwide in this type of buying structure. Nearly $14 billion has already been invested by the United States, Germany, and Spain. The record low prices have not passed unnoticed to large consumers that are increasingly working with experienced and independent qualified suppliers to significantly reduce energy costs.
Influence
Other countries have begun to follow Mexico’s lead. If Mexico meets its goal, it’ll be in the top 10 renewable energy markets by 2022. Seeing Mexico’s plan and the country’s apparent success, other countries in Latin America are taking the initiative to create similar goals in reducing emissions and encouraging sustainability. Argentina is pushing clean energy requirements while Chile is becoming a top performer in renewable energy.
As the new government studies Mexico’s growing energy needs it is working on ways to solidify their goals for renewable energy.We’ll see great strides made, in Mexico and around the world.