Energy for whom? Energy for what? Envisioning alternative energy transitions in Mexico

 By Lorenzo Sapochetti

“There are no problems, there’s so much electric energy, and it even makes me laugh [that] when they privatised electric energy, they were arguing that we’d run out of light, we’d not have the capacity to supply the electric energy demand, and we’d have to open the market”.

These words resounded in the Palacio Nacional as Mexican President Andrés Manuel López Obrador addressed the nation in his mañanera (daily morning press conference) on 4 February 2019 [1]. The President provokingly alluded to former Presidents Felipe Calderón’s (2006-2012) and Enrique Peña Nieto’s (2012-2018) administrations, whose energy policies he has attacked since he started his electoral campaign in 2018.

The energy reform that was undertaken by former President Peña Nieto’s in 2013 has been criticised for creating a business environment that favoured private companies at the expense of state-owned companies. As an example, López Obrador drew attention to the disempowerment of the national companies Electric Federal Commission (Comisión Federal de Electricidad, CFE) and Pemex, which had until then monopolised the electricity and petroleum industries [1]. Let’s have a closer look at the 2013 Energy Reform.

For the first time in more than 70 years, the Mexican Congress approved in December 2013 a series of constitutional amendments aimed at reopening the hydrocarbon and power sectors to private and foreign investment [2]. In particular, non-Statal and non-national companies were invited to invest in the Mexican energy sector through profit- and production-sharing contracts as well as through the direct purchase of new licenses for exploration and production [3]. For the electricity sector, this meant greater participation of the private sector in electricity generation, transmission, distribution and power marketing activities, where the national CFE became just one competitor out of many within a regime of free-market capitalist enterprise. Similarly, in the hydrocarbon sector, private companies with the financial resources and infrastructure necessary to exploit offshore oil reserves were allowed to compete for bids with the state-owned Pemex. The latter, in turn, acquired more administrative and budgetary independence from the Mexican Government and will likely continue to be the most important actor of the Mexican oil sector [4].

In the last few years, concerns have mounted over the adverse environmental consequences of the 2013 reform among its opponents. They worry about the growing greenhouse gas emissions that are brought by increased production of oil and gas. They also express concern over the impact on Mexican (sub)soil and water sources of the hydraulic fracturing for gas, commonly known as fracking, to which the reform gave the green light. Besides, more and more rural communities are voicing their discontent against energy companies, which often abuse their power in carrying out their projects. These are viewed as heedless of human rights, renewable energy goals, and the principle of consultation with the communities that are directly affected by the energy projects. Furthermore, the secondary laws contained in the 2013 Energy Reform allow the privatisation and commodification of land, often with harmful consequences for the peasant and indigenous communities dwelling in the interested areas [5][6].

As part of his declared political renewal, referred to as the ‘Fourth Transformation’ (Cuarta Transformación, or 4T), President López Obrador vowed in 2018 to re-nationalise the energy industry while also accelerating the country’s transition towards renewable energy sources. The 2019-2024 National Plan for Development (Plan Nacional de Desarrollo 2019-2024) affirms that the current administration will “rescue Pemex and the CFE so that they can come back to operate as pillars of the national development”. It also announces that “a new oil refinery will be constructed and State-owned electricity-generating facilities, especially hydroelectric plants, will be modernised” [7]. Moreover, the Energy Transition Law and the General Law on Climate Change establish that by 2024 Mexico will have to produce at least 35% of the national electricity out of ‘clean energies’ (energías limpias), which the Law defines as those generating a maximum CO2 content of 100kg per MWh [8]. 

During the period 2017-2019, 90 solar and wind energy projects were established in 18 Mexican states, representing almost $9 million, 7,518 MW, that is about 7% of the country’s annual electricity generation [9]. While it has been celebrated as a crucial step towards an energy transition, social and political organisations advocate for a more just and equal energy transition than that envisioned by the Government. They argue that the plan only briefly mentions the implications for isolated communities with no or inadequate access to electricity [10]. As one member of a cooperative working with community renewable energies points out, “The quality of electric grids in rural parts of society is terrible: power transformers burn down, fall, get damaged. […] This results in damages to small appliances that cause great harm to families” [11]. Research shows that in 2016, 36.7% of Mexican households lived in energy poverty, with those at the highest deprivation level lacking thermal comfort, efficient refrigeration and gas or electric stove [12].

Indigenous and non-indigenous activist networks across the nation are questioning the 4T’s energy transition. They argue that this fundamental problem cannot be resolved with a technology-only approach. Each community has specific needs and diverse levels of energy consumption. A just and equitable energy transition must consider these differences and respect both the communities’ life priorities and their rights. Peasant and indigenous organisations, associations and networks claim that the current energy policy is tailored to the energy demands and interests of corporations involved in mining and other forms of resource extraction as well as businesses involved in retail and hospitality. While favouring these major energy consumers, they feel that the 4T energy policy ignores the needs of others [13]. A representative of a political organisation maintains that “This energy reform basically, [was sought to] promote […] big projects of renewable energy without a focus on democratising and broadening the spectrum of coverage of energy users. […] We have been documenting and more recently discussing how agreements were made for companies that require those projects to achieve self-sufficiency” [14]. Also, a cooperative member saw the current renewable energy projects as advancing the interests of corporations which, she argues, are producing not only climate change but also territorial, soil, water and population changes though their projects [11].

In Mexico, where the existing energy infrastructure poses technical challenges in terms of electricity delivery, an equitable transition towards renewable energy is also threatened by one-sided political and economic interests[15]. In some regions, such as the Sierra Norte de Puebla, social cooperatives are now working alongside indigenous communities to implement alternative renewable energy projects that enable access to electricity for peasants and indigenous people without requiring access to the national grid [16]. In an effort to rethink the relationship that people have with energy, social cooperatives strive to make the debate about energy more transparent, locally focused and participative. They argue for energy policies that place human (and non-human) lives above capital accumulation, reflecting the demands and projects of peoples, not just corporations. They claim energy discussion be guided by one fundamental question: For whom and for what do we need energy?

[1] Expansión 2019. México tiene suficiente energía eléctrica y hasta de más, afirma AMLO. Expansión, 4 February. Available at: https://expansion.mx/nacional/2019/02/04/mexico-tiene-suficiente-energia-electrica-y-hasta-de-mas-afirma-amlo [Accessed: 25/11/2020].

[2] Hering, G. 2015. Energy reform: will Mexico’s newest revolution boost renewables – or just fossil fuels?. The Guardian, 3 June. Available at: https://www.theguardian.com/sustainable-business/2015/jun/02/mexico-oil-companies-reforms-gas-hydrocarbon [Accessed: 26/11/2020].

[3] Alpizar-Castro, I. and Rodríguez-Monroy, C. 2016. Review of Mexico’s energy reform in 2013: Background, analysis of the reform and reactions. Renewable and Sustainable Energy Reviews. Elsevier, 58, pp. 725–736. doi: 10.1016/j.rser.2015.12.291.

[4] Mayer Foundation 2014. Analysis of Mexico’s New Electric Industry Law. Available at: https://www.mayerbrown.com/-/media/files/perspectives-events/publications/2014/08/analysis-of-mexicos-new-electric-industry-law/files/get-the-full-report/fileattachment/update-analysiselectricitylaw_0814.pdf [Accessed: 26/11/2020].

[5] Merchand, M. A. 2015. Estado y reforma energética en México The State and Energy Reform in Mexico. Problemas del Desarrollo. Revista Latinoamericana de Economía, 46(183), pp. 117–139. Available from: http://www.redalyc.org/articulo.oa?id=11841551006.

[6] FUNDAR 2016. Defensa del territorio frente a proyectos del sector eléctrico en México. México: Creative Commons. Available at: https://fundar.org.mx/mexico/pdf/Territorio.pdf [Accessed: 27/11/2020].

[7] PLAN NACIONAL DE DESARROLLO 2019-2024. Diario Oficial de la Federación. Available at: https://www.dof.gob.mx/nota_detalle.php?codigo=5565599&fecha=12/07/2019 [Accessed. 27/11/2020].

[8] Alxrchjms 2016. LTE: estrategias para la utilización de energías limpias. Tu socio de negocio blog. Available at: https://tusociodenegociosblog.wordpress.com/2016/11/16/lte-estrategias-para-la-utilizacion-de-energias-limpias/ [Accessed: 01/12/2020].

[9] Rivera, I. and López, S. 2019. OPINIÓN: Los beneficios de la transición energética en México. Expansión, 14 March. Available at: https://expansion.mx/opinion/2019/03/14/opinion-los-beneficios-de-la-transicion-energetica-en-mexico [Accessed: 27/11/2020].

[10] Piña Navarro, C. 2019. ‘México: una política energética atrapada al pasado’. In Panorama de la situación energética en América Latina. A un alto costo. Generación de energía en América Latina. Perspectivas América Latina, Vol . 5, November 2019, Heinrich Böll Stiftung, pp. 23–28.

[11] FDPMPT 2020. ¿Quién necesita tanta energía eléctrica? Producción energética para el extractivismo [Online Video]. 19 November 2020. Available from: https://www.facebook.com/FPDTA.MPT/videos/200977568185295 [Accessed: 29/11/2020].

[12] García-Ochoa, R. and Graizbord, B. 2016. Caracterización espacial de la pobreza energética en México. Un análisis a escala subnacional. Economía, sociedad y territorio, 16(51), pp. 289-337. Available from: http://www.scielo.org.mx/scielo.php?script=sci_arttext&pid=S1405-84212016000200289&lng=es&tlng=es [Accessed: 29/11/2020].

[13] Castro Soto, G. 2019. PROYECTO DE TRANSICIÓN ENERGÉTICA 2018-2024. 91. San Cristobal de las Casas. Available at: https://otrosmundoschiapas.org/el-escaramujo-91-proyecto-de-transicion-energetica-2018-2024/ [Accessed: 29/11/2020].

[14] Rosa Luxemburg Stiftung México 2020. Energía comunitaria y popular. Cuarto conversatorio de la serie “Soberanía energética para los pueblos”. [Online Video]. 9 July 2020. Available from: https://www.facebook.com/150338588359756/videos/734755250399806. [Accessed: 30/11/2020].

[15] Howe, C. and Boyer, D. 2016. Aeolian extractivism and community wind in southern Mexico. Public Culture, 28(2), pp. 215–235. doi: 10.1215/08992363-3427427.

[16] Godoy, E. 2020. Cooperativas energéticas nadan a contracorriente en México. Inter Press Service, 25 August 2020. Available at: http://www.ipsnoticias.net/2020/08/cooperativas-energeticas-nadan-contracorriente-mexico/?fbclid=IwAR1G7DAWAqOr6-TkCBOwKY4F5gHAoF8iB2DbNwYWl-m8DA0N7J6tlSjQZU4 [Accessed: 30/11/2020].