Legislative policy in Mexico could boost renewable energy development

Proposed legislation in Mexico plans to boost renewable energy generation to 35% of supply by 2024, according to a national energy policy that should be approved by the Mexican congress this year, as Mexico looks to counter its declining oil production.

This is the first articulated renewable energy policy in Mexico. The energy policy is required under the 2008 Energy Reform Bill, which includes provisions to promote and regulate the development of renewable energy in Mexico.

Mexico does not presently offer subsidies or incentives for renewable energy. However, the Mexican state power company (CFE) continues to tender wind projects to independent power producers (IPPs) in 100 MW increments which operate under power purchase agreements (PPAs) with CFE for 20 years. It is anticipated that the new energy policy will help streamline the contracting and permitting process and bring more renewable energy generation online more efficiently.

The energy policy has been reviewed by the Mexican congress. After the energy policy is returned to the energy secretariat with questions, it is expected to be approved before Q3 2010.