USE OF RENEWABLE ENERGY IN THE ELECTRIC POWER GENERATION
SECTOR IN MEXICO: POLITICAL, REGULATORY, ECONOMIC AND
TECHNICAL ISSUES FROM 1965 TO 2018
UTILISATION DES ÉNERGIES RENOUVELABLES DANS LE SECTEUR DE
PRODUCTION D’ÉLECTRICTÉ AU MEXIQUE: DES ASPECTS POLITIQUES,
RÉGLEMENTAIRES, ECONOMIQUES ET TECNIQUE DE 1965 À 2018
Alberto Elizalde Baltierra1, Diana Sasse2, Yolanda Zeferino Abundis3, Carolina Quiroz
Juárez4, Edgar López Satow5, Héctor Beltrán Mora6 and David Crisóstomo Ramírez7
1
2
Goodrich, Riquelme y Asociados, Mexico, dsasse@goodrichriquelme.com
3
4
Petróleos Mexicanos, Mexico, aelizaldeb@pemex.gob.mx
Comisión Federal de Electricidad, Mexico, yolanda.zeferino@cfe.gob.mx
GTZ, Agencia de Cooperación Internacional México, Mexico, carolina.quiroz@gtz.de
5
6
7
Comisión Reguladora de Energía, Mexico, elopez@cre.gob.mx
Comisión Reguladora de Energía, Mexico, hbeltran@cre.gob.mx
Delft University of Technology, Netherlands, david.crisostomo@ieee.org
The views and opinions contained in this paper do not represent the official position of
the institutions or companies that the authors represent and can be referred only to
them, who are solely responsible.
Abstract
The aim of this work is to analyze the political, regulatory, economic and technical issues that
have determined the use of primary energies for power generation in Mexico from 1965 to
2008, and its perspectives for the next 10 years, in particular the prospects of using renewable
energies. In the 60’s, hydro was the preferred source of energy to produce electricity for
economical and technical reasons. Under the “oil boom” in the 70´s, the transition to
hydrocarbons resources (fuel oil) was progressive. As a result of implementing environmental
policies, electricity has mainly been generated with natural gas since the early 2000. In the
last years, the Mexican Government has adopted new policies to extend use of renewable
energies. For the period 2010-2020 and by virtue of recently adopted policies, renewable
energies would increase in the Mexican generation portfolio, while the natural gas would
continue to dominate the energy scene.
Keywords. Renewable energy, power generation, Mexico
2
1. Introduction
1.1. Mexico’s Primary Sources of Energy For Power Generation
Mexico is a rich country in terms of deposits of primary energy resources. For its availability
of renewable energy resources, Mexico is a blessed country. The estimated potential for
renewable energy resources is: 10,000 MW of wind power; 3,250 MW of mini-hydro
(Gobierno Mexicano 2009) and 2,400 MW of geothermal (GTZ and Secretaría de Energía
2006). The average of sun radiation is 5 kWh/m2 per day and the potential of bioenergy is
between 2,635 and 3,771 Petajoules per year (Gobierno Mexicano 2009). The potential of
wind power, mini-hydro and geothermal is equivalent to 31% of today’s installed capacity.
Hydroenergy is the first primary energy source that was used when the Mexican electricity
sector started; hydrocarbons have been the preeminent primary energy for the last 30 years.
Currently, 75.3% of the installed capacity use hydrocarbons (including 34.87% natural gas
and 25.73% fuel oil), 19.0% large hydro, 2.4% nuclear and 3.3% renewable energy (Gobierno
Mexicano 2009). The term “renewable energy” refers herein to new technologies that
facilitate the use of wind, solar, geothermal and water for small-scale power generation. It
does not include large hydroenergy plants.
A diversification policy has been recently established in order to allow renewable energies to
participate more actively in the expansion of the electric system. As shown in section 1.2,
diversification of generation technologies for power systems is a technical requirement that
improves the quality of a power system. Therefore, more than being a political argument in
pro of renewable energies, diversification is a technical requirement to improve the power
system.
1.2. Diversification of generation technologies for power systems
To meet electricity demand, electric utility companies develop growth strategies for
generation, transmission, and distribution systems. Particularly, in order to expand generation
systems, strategies have been developed by applying least-cost methodology, in which the
cheapest stand-alone resources are simply added, instead of analyzing complete portfolios
(Beltrán, 2009). For this reason, least-cost methodology is biased in favor of fossil-fuel-based
technologies, resulting in the lack of diversification for generation portfolios; within this
context, diversification generally means greater use of renewable energies and other nonfossil-fuel-based technologies.
According to Costello (2007), diversification in generation portfolios is needed because no
single generation technology emerges as a unique solution for addressing all technical,
economical and environmental objectives. In addition, diversity provides flexibility, which for
an electricity generation system means not only the ability to respond rapidly to unforeseen
events maintaining reliable conditions, but also to make planning decisions. Diversification
between types of electricity generators has long been recognized as a desirable characteristic
that makes electricity generators more robust to external factors such as fuel supply
interruptions, fuel price volatility, high variable generation costs, etc. (Sinden, 2006).
Increasing robustness means reducing risk, which is discussed in Liu and Wu (2007), pointing
out the convenience to hedge it to achieve desired economical, technical and environmental
goals.
3
In summary, diversification of generation technologies for power systems offers great
advantages for the expansion of power systems, and has to be considered when making
decisions for future planning horizons.
1.3. Research goal and methodology
This article aims to examine the history of diversification policies and their implementation
from 1965 to 2008, as well as the recently issued diversification policies and amendments to
the legal framework. Finally, the article aims to show the impact of recent diversification
policies - in particular of renewable energy sources - in the composition of primary energy for
2018.
The article is divided into seven sections. Section two refers to the historical evolution of the
Mexican power sector. Sections three to five outline the three relevant changes in energy
policy and the legal framework (in 1975, 1992 and 2008) from 1965 to 2018 and their impact
on the primary energy mix with special reference to the use of renewable energy sources.
Section six summarizes the main issues of the political, constitutional, legal and institutional
framework regarding primary energy supplies to the electric power generation sector in
Mexico from 1965 to 2018. Finally, section seven shows the conclusions of the paper, and
section eight contains references used.
2. Historical Evolution of the Mexican Power Sector
The first electric power system for public service appeared in Mexico at the end of the XIX
century and its development was undertaken by several private companies under a lax control
of the State, covering different parts of the country. Private utility companies did not meet
with the demands of a growing population and industrialization, and did not invest as needed
into the electric power plants and the extension of the power supply network. There were
different rates for power throughout the country. This caused growing social discontent in the
1930’s.
In 1937, the Federal Government created the Federal Electricity Comission (“Comision
Federal de Electricidad” – CFE) with the task of organizing and operating a national power
company system that would combine generation, transmission and distribution activities,
nonprofit making, with the best possible performance in order to benefit the public interest. In
1949, the Government issued Rules for the Operation of the CFE.
The Electrical Industry Law of 1938 (EIL) created a system of concessions and authorizations
for activities in the power sector. A concession was required for activities that used natural
resources whose ownership or dominion corresponded directly to the Nation or for activities
that included the public service of supplying power. Any activity different from those
mentioned above required an authorization. This authorization requirement constitutes the
forerunner of what today constitutes the regulatory mode of self-supply, one of the modalities
that allow private investment in the sector. The EIL regulated the CFE and private utility
companies. Between the creation of the CFE in 1937 and 1960, the Mexican power market
consisted of the CFE as state-owned company and private utility companies.
From the 1940’s, the State started to acquire private utility companies. Considering the
uncertain future of private utility companies, their shareholders decided not to undertake any
4
investments that were required and preferred to sell their shares to the State. The acquisition
process had concluded by the end of the 1950’s. One of the acquired private utility companies
was “Luz y Fuerza del Centro”, a company with generation plants in centre of the country.
The company was not liquidated as initially planned and operated as a second state-owned
company until its extinction in 2009.
22 years after the nationalization of the oil and gas industry, the Mexican Congress amended
the Mexican Constitution and reserved the power industry to the State. The corresponding
paragraph of Article 27 of the Political Constitution of the United Mexican States provides:
“It pertains exclusively to the Nation to produce, conduct, transform, distribute and supply
electric power to provide the public service.” In consequence, all activities related to the
provision of this public service are reserved to the Nation. Documents of the legislative
process mention the following as grounds for the amendment:
(i)
(ii)
(iii)
Requirements of the country’s development according to its increasing rates;
Use of natural resources owned by the Nation – referring to hydrocarbons – in the
general interest.
The principle that the State should supply the basic public services and utilities.
Since all private utility companies had been acquired by the State before such Constitutional
amendment, no expropriation of private utility companies was required and there was no need
for further adjustments to the legal framework. The Electrical Industry Law remained in force
until 1975, regulating authorizations for all activities other than the provision of a public
service that was referred to as self-supply. The concession regime set forth in the Electrical
Industry Law was no longer applicable.
In 1960, Mexico had an installed capacity of 3,021 MW, of which 41% corresponded to hydro
power plants. 54% of the total capacity was operated by CFE while the rest of the share was
operated by private companies –already acquired by the State– such as Mexican Light with
25%, American and Foreign with 12% and the rest was distributed among other small private
companies.
3. 1975: Implementation of the Fuel Oil Era
3.1 Political Framework
In the 1970’s, the Mexican power sector required a quick and economical expansion. Between
1970 and 1975, the installed capacity raised 51%, from 7,414 MW to 11,210 MW. This
expansion was mainly financed with indebtedness. Since low energy costs were considered
necessary to support the growth of the industrial sector, the implemented tariff policy
prevented capitalization of the power sector.
3.2 Legal and Institutional Framework
In 1975, the Law of Public Power Supply (“Ley del Servicio Público de Energía Eléctrica” –
LSPEE) was enacted, abrogating the Electric Industry Law and the Rules for the Operation of
the Comisión Federal de Electricidad that were still in force at that time. The Law was issued
to regulate all activities related to the electric sector in one body. The LSPEE contains
complete regulation of the Mexican power sector. It includes provisions about the structure,
5
responsibilities of CFE and determination of CFE’s charges for energy. According to the
LSPEE, CFE’s legal purpose is to ensure a continuous, efficient and secure power supply.
The General Director of PEMEX became member of the CFE board.
In addition to the public power supply carried out by CFE, the LSPEE contains requirements
for what is not considered “of public service” and, in consequence, open to private investment
in accordance with the Mexican Constitution. For the first time, the LSPEE expressly
introduced “self-supply” as an activity in the electric sector that is not considered power
supply for public service. Activities of self-supply required authorization from the Ministry of
Industry and Commerce (currently the Ministry of Economy). Power had to be generated and
used by persons “individually considered”. Such authorization was granted considering that it
was impossible or inconvenient for CFE to supply the power. In 1983, cases of efficiency
increase and cogeneration of self-supply were exempted from said condition. Cogeneration
was considered a case of self-supply.
3.3. Energy Portfolio 1975 – 1992
From 1975 to 1992, energy was mainly produced from hydro and fuel oil power plants. In
1975, the share of production of energy from these two sources was 37% for hydro and 36%
for fuel oil of 536.92 [PJ] produced in that year. In the following years, these two sources kept
being the main sources for power generation; however, by the end of this period, in 1992, fuel
oil became the main share, with 51% of 1285.7 [PJ] produced and 21%.4 from hydro power
plants (national energy balances).
4. 1992: Implementation of the Natural Gas Era
4.1 Political Framework
In the beginning of the 1990s, the Mexican government expected a considerable growth of the
demand for electricity of almost 300% between 1988 and 2010. In order to meet such
demand, the Mexican Government issued new policies to modernize the energy sector. Some
of the milestones of this new policy were diversification of energy sources, seeking to
decrease the high dependency on hydrocarbons; (ii) energy efficiency and savings; and (iii)
protection of the environment by avoiding heavily contaminating technologies or energy
sources. To finance development and expansion of the electricity demand, this policy allows
for complementary participation of private investment (Gobierno Mexicano, 1990).
4.2 Legal and Institutional Framework
The LSPEE was amended towards the end of 1992. This amendment extended the scope of
activities that are not considered public service. Consequently, private companies may carry
out activities under such modalities. The amendment was justified with the need to increase
the capacity of the Mexican power system and the impossibility to finance such increase with
public resources.
The modality of self-supply was extended. The condition of CFEs impossibility or
inconvenience to supply power was lifted. The “individually considered” component was
deleted and the modality extended to “self-supply companies”. Self-supply companies may
only supply generated power to its partners. The LSPEE does not require that all partners of a
self-supply company consume the generated power, or that participation of each partner be
6
proportional to its energy consumption. The self-supply scheme had been object of political
and legal conflicts. For the last years, the constitutionality of the self-supply scheme has not
been questioned any more. The amendment separated cogeneration from self-supply and
created the cogeneration as independent modality.
In addition, the amendment created the new modalities of “independent power producer”,
“small power producer”, “import or export”. The creation of the independent power producer
has been the most significant change. The independent power producer generates power to be
sold exclusively to CFE. The power purchase agreements between the independent power
producer and the CFE may have duration of up to 30 years and their execution requires a
public tender. The modality of small power producers includes the exclusive sale of power to
CFE up to a capacity of 30 MW. The execution of the power purchase agreement does not
require prior public tender. The small power producer also includes cases of rural self-supply
up to 1 MW.
The amendment inserted a new Article 36-BIS into the LSPEE; According to this article, CFE
is compelled to purchase power for public supply at the lowest possible cost.
In 1993, the Energy Regulatory Commission (“Comisión Reguladora de Energía” – CRE)
was created as an advisory body of SENER. The Law of the Energy Regulatory Commission
of 1995 empowers the Commission to regulate generation activities by private entities.
Article 36-BIS LSPEE inhibited renewable energy projects under the “independent power
producer” scheme, since CFE was not authorized to pay renewable independent power
producers a price which would have taken into consideration the higher generation costs of
renewable energy technologies compared with conventional technologies.
During the first decade of this century, CRE designed several regulatory instruments for
interconnecting private renewable power producers to CFE’s power grid and charges to be
paid to CFE by the private renewable power producers for their services. Those instruments
considered the specific needs of intermittent power sources and improved the regulatory
framework considerably. It was the first specific regulation for renewable power generation.
5. Period 2008-2018
5.1 Renewable Energies in the Mexican Energy Portfolio
In 2008, 1.7% of the total installed capacity of 59,573 MW corresponded to renewable
energy, 965 MW of geothermal and 85 MW of wind.
Public and private participation, installed capacity of public service and IPP (Independent
Power Producers) amounted 51,105 MW of which 8,468 MW corresponded to private
producers. CFE represented 64.6% of the total installed capacity and LFC just 2.0%, while
19.2% was from the IPPs. In the private sector, self-supply contributed with 6.7% and
cogeneration with 4.5% of the total installed capacity. Natural Gas (combined cycle power
plants and turbogas) represented 38.3% of the total capacity, fuel oil and diesel represented
25.6%, carbon 9.2% and renewable energies represented 24.2% (with large hydro).
7
5.2 Political Framework
Participation of private generators is fundamental in developing the economic infrastructure,
for which the State promotes energetic projects in which they are allowed to invest. Within
the planned policies, one of them proposes enabling fiscal incentives that foster development
of these projects seeking economic viability.
Generation of electric power by using renewable energies is different from the central
worries, which proposes the exchange of technologies and their national and international
transfer, as well as supporting research on this matter. This also foresees fulfillment of present
and future international environmental commitments to reduce greenhouse gases.
In addition, it contemplates the development of isolated zones by supplying electricity.
5.3 Legal and Institutional Framework
On November 29, 2008, the Law to Use Renewable Energy and Financing of Energy
Transition (Ley para el Aprovechamiento de Energías Renovables y el Financiamiento de la
Transición Energética) became effective. The Law regulates the use of renewable energy to
generate power that is not devoted to public supply, which is a reference to the modalities of
private power generation. According to the Law, renewable energy is defined as energy
whose source lies in the natural phenomena, in processes or materials that can be converted
into energy and which regenerate naturally, so that they are continuously or periodically
available. The Law specifies renewable energy sources as follows: a) wind; b) solar radiation
in all its forms; c) movement of water in natural or artificial channels; d) ocean energy in its
various forms (energy provided by surface waves and tides, thermal and osmotic energy); e)
geothermal energy; f) bioenergetics; and others as determined by the Ministry of Energy.
The Law increases the CRE’s attributions and shifts some of the responsibilities from CFE to
CRE. In the field of renewable energies, the CRE now has the following responsibilities:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Issuing the rules, guidelines, methodologies and other administrative instructions
governing the power generation from renewable energies.
Establishing the fees for the various services between private generators and CFE.
Asking the CFE to review and, as necessary, to change the rules of dispatch to comply
with the provisions of this Law.
Issuing the methodologies to determine the capacity credit for renewable energy
technologies within the power generation capacities.
Issuing the general rules for interconnecting the national electricity system, at the
suggestions of the public suppliers.
Setting the procedures to exchange power and the corresponding compensation rules.
Issuing the guidelines for contract models to be signed between CFE and private
suppliers using renewable energy.
Establishing, with the advice of the Ministry of the Treasury and the Ministry of
Energy, the maximum amount to be paid by CFE to private generators.
Approving the calculation method adopted for payment of surplus power. Surplus
power refers to the power generated by self-suppliers which exceeds the needs of their
(authorized) consumers.
Developing the guidelines (basic terms and conditions) according to which the CFE is
obligated to conclude long-term contracts with private generators.
8
Attributions of the CRE in the field of renewable energies apply to cogeneration, which leads
to an efficient use of electricity if the cogeneration system complies with energy efficiency
standards issued by CRE.
The Law opens up the possibility of considering potential economic benefits in the economic
assessment of renewable energy projects. Potential economic benefits include externalities
and payments from CO2 certificates or any other instrument of international financing, and
any incalculable concepts as the advantage to use different technologies in the national power
system. The methodology to evaluate externalities is the first attempt to consider the
economic benefit to use renewable resources to power generation. The cost of a kWh using a
combined cycle power plant represents 68% of the cost of the same kWh using a wind power
plant. However, if we consider additional factors for the economical feasibility analysis such
as the cost of externalities, this share is going to increase up to 82% (Quiroz et alii, 2010). The
CFE is empowered to pay a higher consideration for power from renewable energy than for
power from conventional energy sources. In addition, the consideration shall include the costs
of generation capacity and of generated electricity. The consideration may vary depending on
technology and geography. The different investment costs for the various technologies of
electricity from renewable energy sources may be considered to calculate the consideration.
The CFE is also compelled to purchase a reasonable amount of power surplus from private
generators according to the operating conditions and economics of the power system, taking
into account the geographical distribution and availability of different renewable energy
technologies.
6. Results 1965-2018
Table 1 summarizes the main issues of the political, constitutional, legal and institutional
framework regarding primary energy supply for the electric power generation sector in
Mexico from 1965 to 2018.
9
Table 1. Political, constitutional, legal and institutional framework regarding primary energy supply for the electric power generation sector
in Mexico from 1965 to 2018
Period
1938 1960
Political
Constitutional
1960 - Art. 27.
Addition regarding
electric power
considered as
“public service”.
1960 1975
Legal
Institutional
1938 - Electrical Industry Law. It gave concessions
and authorizations for activities in the power sector.
1937 – Foundation of
the Federal
Electricity
Commission (CFE).
Generation,
transmission and
distribution activities
with nonprofit making.
The mexican power
market was integrated
by CFE as state-owned
company and private
utility companies.
National Development Plan 1983-1988
 Prevailed a national policy, guarantying a self-production
of fuels through the restriction of imported fuels.
 Achieve an energy balance through diversification of its
sources.
National Energy Program 1984-1988
 To stimulate the development of specialized suppliers to
use alternative energy sources.
 To promote cogeneration projects, using fuel oil and
natural gas, where possible and demonstrative projects for
the use of alternative energy sources.
1975 –
1992
National Development Plan 1989-1994
 To modernize the economic infrastructure by means of a
rational public investment and a greater concurrence of
private sector.
National Energy Program Upgrade 1990-1994
 Hydrocarbons dependence turn down as consequence of
national production decrease.
 Strengthening prospect of important national energy
resources as coal, uranium, geothermic, hydraulics and
conventional sources.
 Forsee energy importation resources accordingly the
oportunity cost that means the conservation of national
hydrocarbons, like fuel oil.
1983 - Art. 28.
Precise definition of
economic areas
performed by the
State and described
as “strategic” and
“priority” as
electricity, oil and
hydrocarbons.
1975 - Law of the Public Service of Electric
Energy. Abrogate the Electric Industry Law.
Complete regulation of the Mexican electric sector,
including activities which are not considered “public
service”.
1992 – Amendment to the Law of the Public
Service of Electric Energy. Introduced activities not
considered as “public service”, under the modalities:
Self-Supply, Cogeneration, Little Production, Export
or Import and private investment in power generation
activity was allowed through Independent Power
Producers (IPP) based on combine cicle using natural
gas.
1940 – Government
started the acquisition
process of private
utility companies.
1960 – Acquisition of
“Luz y Fuerza del
Centro” by the
Government. The
mexican power market
was integrated just by
CFE.
1989 – Foundation of
the National
Commission to Save
Energy. Promote
energy saving
programs and
cogeneration activities.
Period
Political
Constitutional
Legal
Institutional
National Development Plan 1995-2000
 To strengthen electrical infrastructure for technological
development, fostering investment of the private sector.
1995 – Natural Gas Regulation. Liberalization of
natural gas market. Private investment participation
on downstream of natural gas, previously were
exclusive activities of PEMEX.
Development program and restructuring of the Energy
Sector. 1995-2000.
 Take advantage of the potential of cogeneration using
natural gas, fuel oil and alternative energy sources.
 Promote private participation in power generation
activities.
19932008
National Development Plan 2001-2006
 Foster private investment and financing in infrastructure
development.
 To create transparent regulatory frameworks.
2008 – Utilization of the Renewable Energies and
the Financing of the energetic transition Law.
Legal favourable framework for the impulse of the
renewable energy use to power generation. Energies
considered are wind power, solar, hydro, oceanic
energy, geothermal and bioenergetics. This law not
consider radioactive energy, big hydroelectric plants
and burning of industrial waste.
Sectorial Energy Program 2001 – 2006

To create a competition environment, where the State
creates the necessary conditions to private investment.
 Diversification of energy sources, taking into account
environmental costs of the traditional ones. To encourage
the use of wind power, mini-hydro, geothermal, solar and
biomass.
National Development Plan 2007-2012
 Use of energy sources with low intensity of carbon to
reduce Greenhouse gases and supply remote areas as wind
power, biomasse, hydro and solar including bio-fuels.
 To stimulate private investment in the electric sector.
2008 2018
Sectorial Energy Program 2007-2012
 To facilitate the exchange of technologies at national and
international level and to promote cogeneration projects
 Renewable Energy:
 To balance portfolio of primary sources for electric power
generation (6% total renewable for 2012).
 To use them for development of remote zones.
 To foment them by means of the private sector.
11
1995 – Foundation of
the Energy
Regulatory
Commission (CRE).
Regulation of energy
sector.
6.1 Period 1965-2008
The availability of primary energy sources and technological trends greatly influence the
creation of national policies and development strategies for all countries. In the specific case
of Mexico, the use of primary energy sources can be studied from past years up to present
time, clearly identifying three eras in time in which one primary energy source was dominant
(Figure 1):
1. Era of Hydro energy (1965 - 1975): at the beginning of this, 60% of the electricity was
generated by hydroelectric plants; by that time, there was a great interest of private
companies to build such plants because of the great availability of resources. Besides,
we can explain such dependence in hydro energy as an outcome of decreasing oil
production as a consequence of oil industry nationalization. By 1976, hydro energy
started to have a significant decrease in its growth rate, hydro power plants were no
longer built, new oil reservoirs were discovered, oil production started to increase
considerably. These events marked the end of hydro energy era.
2. Era of fuel oil (1976 – 2003): by 1968, PEMEX stopped exporting oil and reduced
exports of natural gas and oil derivatives. By that time domestic production was no
longer sufficient to meet domestic demand. However, with the discovery of new oil
reservoirs in the period of 1971-1976, thermal power plants became the main option to
expand the generation system. This trend continued and, in 1988, we had the
maximum share of thermal power plants (57.6%), but in 1992 environmental concerns
started to emerge; in 1996, oil production started to decline, and then the need to use
new energy primary sources could not be further postponed. In this way, fuel oil era
concluded in 2003 when natural gas started to have the main role in diversifying the
generation portfolio.
3. Era of natural gas (2004 – 2007): As a result of global environmental concerns, in
1992 the United Nations urges the global community to take measures to decrease
pollution, particularly the emission of greenhouse gases. Later, in 1997, the Kyoto
Protocol was adopted and new environmental constraints were established for the
expansion of power systems. Then, with wide global supplies, environmental
advantages, and lower generation cost; natural gas became the option to fuel future
power plants for the Mexican electrical sector.
Figure 1. Primary energy use for generation of public electrical service in Mexico from 1965 to 2007
6.2 Period 2008-2017
The Ministry of Energy established in its Electric Energy Outlook (“Prospectivas del Sector
Eléctrico, 2008-2017”) that generation of electricity will raise in 3.3% per year during the
period 2008 – 2017.
Natural gas will be the fossil fuel with higher growth, with 5.0% per year while heavy oil will
decrease by -7.6% per year, followed by diesel with -6.3%. Presumably, coal consumption
will increase by 3% per year.
According to data obtained, we can assume the behavior of fuel consumption during these
years:

Natural Gas remains the most used due to its benefits, and that is the reason for which
expansion of the system still depends on combined cycle and repowering of thermal
units.

Heavy Oil will be less used, mainly because of the increase in natural gas use in
combined cycle plants to comply with environmental regulation, the increase in coal
use and the retirement of low efficiency plants.

The use of coal will increase due to the plans to build these plants in 2010, 2017 and
2018, in addition to the opportunity of using carbon gasification integrated to
combined cycles.

Wind energy will increase its participation with the projects to be installed in La
Ventosa, Oaxaca. It is also considered to be a real alternative to achieve the goals on
installed capacity with “free technology”, to be defined according to the outlooks of
the Ministry of Energy.
Figure 2 below describes the above-mentioned:
Figure 2. Primary use of energy for generation of public sector electricity in Mexico from 1965 to 2017
7. Conclusions
The electric power generation sector in Mexico has been dominated by three energy sources
since 1965:



1965-1975: hydro
1975-2000: fuel oil
2000-2008: natural gas
In the 60’s hydro was the preferred source of energy for electricity for economical and
technical reasons. Under the “oil boom” in the 70´s, the transition to hydrocarbon resources
was progressive according to the increasing availability of fuel oil in refineries. As a result of
implementing environmental protection policies and the entrance into the market of cheaper
combined cycle plants, electricity is mainly generated by natural gas since the early 2000.
Those policies also justify that the main renewable sources used for power generation had
been hydro, geothermal and wind.
According to our analysis, diversification policies have been successfully implemented
through time in the recent history of the Mexican power system.
For the period 2010-2020, it is expected that natural gas will continue dominating the energy
scene because of the technical, economical and environmental advantages of combined cycle
units.
8. References











Bazán G. and Elizalde A. (2007). “Strategies of Diversification in Regulated Energy
Markets: The Natural Gas and Electric Power Industries in Mexico”. Proceedings of the
20th World Energy Congress, Rome, Italy, 2007.
Beltrán H. (2009). “Modern Portfolio Theory applied to Electricity Resource Planning”.
Master of Sciences Dissertation, University of Illinois at Urbana- Champaign, May 2009.
Costello K. (2007). “Diversity of Generation Technologies: Implications for DecisionMaking and Public Policy”. The Electricity Journal, June 2007, Vol.20, Issue 5.
Liu M. and Wu F. (2007). “Risk Management in a Competitive Electricity Market”,
Electrical Power & Energy Systems, Vol. 29, pp. 690-697, 2007.
Gobierno Mexicano (1983). “Plan Nacional de Desarrollo 1983-1988”. Presidente Miguel
de la Madrid Hurtado.
Gobierno Mexicano (1984). “Programa Nacional de Energéticos 1984-1988”. Presidente
Miguel de la Madrid Hurtado.
Gobierno Mexicano (1989). “Plan Nacional de Desarrollo 1989-1994”. Presidente Carlos
Salinas de Gortari.
Gobierno Mexicano (1990). “Programa Nacional de Modernización Energética 19901994”. Presidente Carlos Salinas de Gortari.
Gobierno Mexicano (1995). “Plan Nacional de Desarrollo 1995-2000”. Presidente Ernesto
Zedillo Ponce de León.
Gobierno Mexicano (1995). “Programa de Desarrollo y Reestructuración del Sector de la
Energía 1995-2000”. Presidente Ernesto Zedillo Ponce de León.
Gobierno Mexicano (2001). “Plan Nacional de Desarrollo 2001-2006”. Presidente Vicente
Fox Quesada.












Gobierno Mexicano (2001). “Programa Sectorial de Energía 2001-2006”. Presidente
Vicente Fox Quesada.
Gobierno Mexicano (2007). “Plan Nacional de Desarrollo 2007-2012”. Presidente Felipe
Calderón Hinojosa.
Gobierno Mexicano (2007). “Programa Sectorial de Energía 2007-2012”. Presidente
Felipe Calderón Hinojosa.
Gobierno Mexicano (2008). “Prospectiva del Sector Eléctrico 2008-2017”, Secretariat of
Energy, 2008.
Gobierno Mexicano (2009). “Programa Especial para el Aprovechamiento de Energías
Renovables”.
Gobierno Mexicano. “Balance Nacional de Energía”, several years.
GTZ y Secretaría de Energía (2006). “Renewable Energies for sustainable development in
Mexico”.
López Satow, E. (2009). “Utilización de Energías Renovables en México: Hacia una
Transición en la Generación de Energía Eléctrica”. Universidad Nacional Autónoma de
México, Nov. 2009.
Quiroz C., Sasse D., Ramírez S., Gómez A., Parra H., Miranda A. and Elizalde A. (2010).
“Externalidades en la Generación de Energía Eléctrica en México”, 23 Reunión de Verano
de Potencia, IEEE, Acapulco Mexico, July 2010.
Rosenzweig Mendialdua, F. (2007). “El Sector Eléctrico en México”. Ed. Porrúa México
Saxe Fernández J. (2002). “La Compra-Venta de México”. Plaza & Janes, México, 2002.
Sinden G. (2006). “Renewable Electricity Generation”. Supporting documentation for the
Renewable Advisory Board in UK, 2006.
17