THE FUTURE OF THE ENERGY REFORM IN MEXICO
SANTIAGO CREUHERAS
DIRECTOR GENERAL FOR ENERGY EFFICIENCY AND TECHNOLOGY INNOVATION
DEPARTMENT OF ENERGY
MEXICO
AUGUST 2014
CONTENT
I.
OVERVIEW
II.
NEW REGULATORY FRAMEWORK: ENERGY REFORM
III. SPECIAL PROGRAM FOR RENEWABLE ENERGY
IV. INVESTMENT OPPORTUNITIES
V.
FINAL REMARKS
OVERVIEW OF THE ENERGY SECTOR
2010
2027
112 million
inhabitants
130 million
inhabitants
384 cities
489 cities
72% of the total
population is located in
cities**
25 million vehicles using
petrol and diesel
12%
88%
88% of the total
population will be
located in cities*
63 million vehicles will use
petrol and diesel
OVERVIEW OF THE ENERGY SECTOR
Mexico: Energy Production and
Consumption and Economic Growth
13
Thousands of Petajoules
12
11
10
Energy deficit
9
Energy
consumption
8
Primary energy
production
7
Source: Sistema de Información Energética, Secretaría de Energía.
2027
2026
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
6
CONTENT
I.
OVERVIEW
II.
NEW REGULATORY FRAMEWORK: ENERGY REFORM
III. SPECIAL PROGRAM FOR RENEWABLE ENERGY
IV. INVESTMENT OPPORTUNITIES
V.
FINAL REMARKS
ENERGY REFORM

IN ORDER TO CONSOLIDATE THE NEW LEGAL REGIME FOR THE ENERGY SECTOR, THE
EXECUTIVE SENT TO CONGRESS A PACKAGE OF 9 SECONDARY INITIATIVES THAT
INVOLVES A TOTAL OF 21 LAWS
Act
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
Hydrocarbons 'Act*
Foreign Investment Act
Mining Act
Public – Private Association Act
Electricity Industry Act*
Geothermal Energy Act*
National Waters Act
National Agency for Industrial Safety and Environmental Protection in
the Hydrocarbon Sector Act*
Petróleos Mexicanos Act*
Comisión Federal de Electricidad Act*
Federal State Owned Companies Act
Public Sector Purchasing, Leases and Services Act,
Public Works and Related Services Act;
Coordinated Energy Regulators Act*
Federal Public Administration Act
Hydrocarbon Act*
Federal Duties Act
Fiscal Coordination Act
Mexican Oil Fund for Stability and Development Act*
Federal Budget and Fiscal Responsibility Act
Public Debt Act
Initiative
Hydrocarbons 'Decree
Electricity Decree
Geothermal Decree
Agency Decree
State Owned Productive
Enterprises Decree
Regulators‘ Decree
Fiscal Decree
Mexican Oil Fund Decree
Budget Decree
ENERGY REFORM
IN HYDROCARBONS

PRIVATE INVESTMENT THROUGH CONTRACTS IN EXPLORATION AND
PRODUCTION OF HYDROCARBONS

PRIVATE INVESTMENT THROUGH PERMITS IN REFINING,
PETROCHEMICAL, TRANSPORTATION, STORAGE AND DISTRIBUTION

ROUND ZERO AND ROUND ONE

STRENGTHENING THE REGULATORY BODIES

NEW TAX REGIME FOR PEMEX AND PRIVATE COMPANIES

PEMEX WILL BECOME A PRODUCTIVE STATE COMPANY, WITH THE
FREEDOM TO ESTABLISH ASSOCIATIONS, WITH BUDGETARY, TECHNICAL
AND MANAGEMENT AUTONOMY, AS WELL AS FREEDOM TO DETERMINE
THE WAGES OF ITS WORKERS
ENERGY REFORM
IN HYDROCARBONS

INDEPENDENT PUBLIC OPERATOR FROM THE NATIONAL PIPELINE
SYSTEM

MEXICAN OIL FUND FOR STABILIZATION AND DEVELOPMENT

FINANCIAL TRANSPARENCY IN EACH CONTRACT AND EACH BIDDING
ROUND

NATIONAL CONTENT TO PROMOTE THE DEVELOPMENT OF LOCAL
INDUSTRY

THE CREATION OF THE NATIONAL AGENCY FOR INDUSTRIAL SAFETY
AND ENVIRONMENT PROTECTION FOR THE HYDROCARBONS
SECTOR
ENERGY REFORM
IN ELECTRICITY

INDIVIDUALS ARE GRANTED THE RIGHT TO GENERATE AND SELL
ELECTRICITY, WITH STATE REGULATION

THE PRIVATE SECTOR MAY PARTICIPATE IN TRANSMISSION AND
DISTRIBUTION OF ELECTRICITY, THROUGH A SYSTEM OF CONTRACTS WITH
CFE

CENACE WILL BECOME A DECENTRALIZED PUBLIC AGENCY, RESPONSIBLE
FOR OPERATING THE NATIONAL GRID AND THE WHOLESALE ELECTRICITY
MARKET

CFE WILL HAVE FREEDOM TO ESTABLISH ASSOCIATIONS WITH BUDGETARY,
TECHNICAL AND MANAGEMENT AUTONOMY, AS WELL AS FREEDOM TO
DETERMINE THE WAGES OF ITS WORKERS

THE REGULATORY BODIES OF THE ELECTRICITY INDUSTRY WILL BE
STRENGTHEN
ENERGY REFORM
KEY ELEMENTS
ELECTRICITY
MARKET
-
SENER WILL DETERMINE THE DESIGN OF THE ELECTRICITY MARKET
CRE WILL AUTHORIZE THE OPERATING PROCEDURES ACCORDING TO CENACE
CENACE WILL OPERATE THE ELECTRICITY SYSTEM AND MARKET
THE OPEN AND NON-DISCRIMINATORY ACCESS WILL BE GUARANTEED FOR THE ELECTRICITY
GENERATORS AND USERS
TRANSMISSION /
DISTRIBUTION
- CFE MAY ENTER INTO CONTRACTS WHEN DEEMED APPROPRIATE
- SENER MAY COMPETE FOR CONTRACTS, WHEN THESE ARE NOT RELATED TO CFE ASSETS
CERTIFICATES
FOR CLEAN
ENERGY AND
POLLUTION
- SENER WILL ESTABLISH THE MINIMUM REQUIREMENTS FOR CLEAN ENERGY GENERATION
- CLEAN ENERGY CERTIFICATES WILL BE CREATED TO REDUCE TRANSACTION COSTS
- SENER WILL HAVE THE OPTION OF A CAP-AND-TRADE SYSTEM FOR CARBON EMISSIONS
ENERGY REFORM
KEY ELEMENTS
- SENER WILL MANAGE A UNIVERSAL SERVICE FUND; THE MARKET PARTICIPANTS WILL
CONTRIBUTE
UNIVERSAL SERVICE
- THE FUND WILL FINANCE ELECTRIFICATION PROJECTS AND WILL SUPPORT THE SUPPLY
OF ELECTRICITY AND EFFICIENT LIGHT-BULBS PROGRAMS FOR END-USERS IN
MARGINAL CONDITIONS
- CFE WILL BECOME A PRODUCTIVE STATE COMPANY, WITH AUTONOMOUS
STRENGTHENING OF
CFE
MANAGEMENT AND MODERN CORPORATE GOVERNANCE
- CFE WILL BE TRANSFORMED FROM AN ELECTRIC
LIGHT COMPANY TO AN ENERGY
COMPANY
CFE
RESTRUCTURATION
CFE MAY ESTABLISH SUBSIDIARIES AND AFFILIATES TO ACHIEVE ITS GOALS
THE VERTICAL SEPARATION (GENERATION-TRANSMISSION-DISTRIBUTIONCOMMERCIALIZATION) IS ESSENTIAL FOR:
- TO ENSURE OPEN ACCESS AND NOT UNDULY DISCRIMINATORY
- TO PROMOTE COMPETITION IN THE GENERATION MARKET
- TO PROMOTE TRANSPARENCY AND EFFICIENT REGULATION
CONTENT
I.
OVERVIEW
II.
NEW REGULATORY FRAMEWORK: ENERGY REFORM
III. SPECIAL PROGRAM FOR RENEWABLE ENERGY
IV. INVESTMENT OPPORTUNITIES
V.
FINAL REMARKS
SPECIAL PROGRAM FOR RENEWABLE ENERGY
PUBLIC POLICY: PARTICIPATIVE PROCESS
ADVISORY BOARD
FOR RENEWABLE
ENERGY
10
WORKING GROUPS
(OVER 50 PARTICIPANTS)
o
o
o
o
o
o
GOVERNMENT
INDUSTRY
ACADEMY
SOCIETY
MEMBERS OF CONGRESS
INTERNATIONAL COOPERATION AGENCIES
(22 SESSIONS)
SPECIAL
PROGRAM
FOR RENEWABLE
ENERGY
SPECIAL PROGRAM FOR RENEWABLE ENERGY
Objectives
INCREASE CAPACITY AND POWER
GENERATION FROM RENEWABLE ENERGY SOURCES
INCREASE INVESTMENT IN INFRASTRUCTURE,
EXPANSION AND GENERATION
INCREASE BIOFUELS PARTICIPATION
IN THE ENERGY MIX
PROMOTE TECHNOLOGICAL AND HUMAN CAPITAL
DEVELOPMENT, AS WELL AS VALUE CHAINS
DEMOCRATIZE ACCESS TO RENEWABLE ENERGY
SPECIAL PROGRAM FOR RENEWABLE ENERGY
Strategies / Action lines
OBJECTIVES
NATIONAL DEVELOPMENT PLAN
TRANSVERSAL STRATEGIES
5
STRATEGIES
25
ENERGY SECTOR PROGRAM
NATIONAL ENERGY STRATEGY
SECTOR PROGRAMS
ACTION LINES
122
SPECIAL PROGRAMS
GOALS 2018
2012
2018
RENEWABLE CAPACITY
25.3 %
32.8 %
RENEWABLE GENERATION
14.7 %
24.9 %
RESERVES VS GEOTHERMAL DECLINE (A 10 AÑOS)
1.05/1
2/1
INTEGRATION OF VALUE CHAINS
2.6 DE 5
3.2 DE 5
PROCEDURES (PROCESSING DAYS)
620
465
RURAL ELECTRIFICATION WITH RENEWABLE ENERGY
6.0%
8.0%
CONTENT
I.
OVERVIEW
II.
NEW REGULATORY FRAMEWORK: ENERGY REFORM
III. SPECIAL PROGRAM FOR RENEWABLE ENERGY
IV. INVESTMENT OPPORTUNITIES
V.
FINAL REMARKS
INVESTMENT OPPORTUNITIES
MODERNIZATION OF HYDROCARBONS AND
ELECTRICITY SECTORS
RENEWABLE ENERGIES
ENERGY EFFICIENCY
RESEARCH, TECHNOLOGICAL DEVELOPMENT AND
TRAINING OF HUMAN RESOURCES
SOLAR POTENTIAL
MAP OF DIRECT IRRADIATION
DURING JUNE
AVERAGE DAILY IRRADIATION IN MEXICO IS ABOUT 5.5 KWH/M2/D, AND CAN REACH
VALUES HIGHER THAN 8.5KWH/M2
SOURCE: SENER, INVENTARIO NACIONAL DE ENERGÍAS RENOVABLES
WIND POTENTIAL
POWER DENSITY
80 METERS DURING APRIL (W/M2)
STUDIES TO CHARACTERIZE THE WIND RESOURCE IN REGIONS OF THE ISTHMUS OF
TEHUANTEPEC, THE PENINSULAS OF YUCATAN AND BAJA CALIFORNIA, AND THE
NORTHERN REGION OF THE GULF OF MEXICO ...
SOURCE: SENER, INVENTARIO NACIONAL DE ENERGÍAS RENOVABLES
GEOTHERMAL POTENTIAL
MAP OF GEOTHERMAL RESOURCES IN MEXICO (°C)
GEOTHERMAL POTENTIAL BASED ON THE CENSUS OF MORE THAN
ESTIMATED BY THE FEDERAL ELECTRICITY COMMISSION.
SOURCE: SENER, INVENTARIO NACIONAL DE ENERGÍAS RENOVABLES
1,300 HOT SPOTS
POTENTIAL
MAP OF RENEWABLE RESOURCES
ELECTRICITY GENERATION POTENTIAL WITH RENEWABLE ENERGIES
(GWH/YEAR)
RESOURCES
GEOTHERMAL
MINI HYDRO
WIND
SOLAR
BIOMASS
NATIONAL TOTAL
SOURCE: SENER, INVENTARIO NACIONAL DE ENERGÍAS RENOVABLES
POSSIBLE
PROBABLE
APPROVED
16,165
95,569
892
-
1,805
1,365
87,600
9,597
9,789
6,500,000
-
542
11,485
391
579
6,615,250
107,362
13,167
RENEWABLE ENERGIES POTENTIAL
VALUES ASSOCIATED TO THE REQUIRED CAPACITY
TO GENERATE 10,000 GWH-YEAR
INCREASE OF GDP
EMPLOYMENT CREATION
TAX COLLECTION
MILLIONS OF PESOS
NUMBER OF JOBS
MILLIONS OF PESOS
SOLAR PV
BIOMASS
GEOTHERMAL
CHP
WIND
HYDRO
93,000
49,500
59,800
45,100
29,700
43,200
22,800
7,300
11,100
69,000
346,100
SOURCE: SENER CON DATOS DE CRE Y ESTUDIOS DE LA AMDEE-PWC Y AMEHIDRO-PWC.
7,700
36,000
4,100
5,000
3,700
2,500
29,300
5,700
149,700
28,700
ENERGY EFFICIENCY POTENTIAL
OVERALL ENERGY SAVINGS EQUIVALENT TO 7.6 GTCO2 PER YEAR IN
2030
INDUSTRY AND
ENERGY
GENERATION,
BUILDINGS, 25%
31%
EQUIPMENT AND
ELECTRIC
APPLIANCES, 10%
TRANSPORT, 29%
SOURCE: AGENCIA INTERNACIONAL DE ENERGÍA, ENERGY EFFICIENCY POLICY RECOMMENDATIONS, UPDATE 2011, IEA
LIGHTING, 5%
ENERGY EFFICIENCY IN SUSTAINABLE BUILDINGS
MEXICAN
OFFICIAL
STANDARDS




PROGRAMS AND
STRATEGIES
 PROGRAM FOR THE SUSTAINABLE USE OF ENERGY
 NATIONAL STRATEGY FOR SUSTAINABLE BUILDINGS
 EVALUATION SYSTEM FOR BUILDINGS
INVESTMENT
OPPORTUNITIES
 SUBSTITUTION OF INEFFICIENT TECHNOLOGIES
 ENERGY EFFICIENCY IN BUILDINGS
 USE OF ECO-TECHNOLOGIES IN THE RESIDENTIAL SECTOR
LIGHTING SYSTEMS
THERMAL ENVELOPE
EQUIPMENT
GLAZING SYSTEMS
RESEARCH, TECHNOLOGICAL DEVELOPMENT
AND TRAINING OF HUMAN RESOURCES
APPLIED SCIENTIFIC AND TECHNOLOGY RESEARCH




ENERGY EFFICIENCY
RENEWABLE ENERGY SOURCES
USE OF CLEAN TECHNOLOGIES
DIVERSIFICATION OF PRIMARY ENERGY SOURCES
 EXPLORATION AND EXPLOITATION
 HYDROCARBONS REFINING
 BASIC PETROCHEMICALS PRODUCTION
ENERGY TRANSITION FINANCING
FUND FOR
ENERGY
TRANSITION
 USE AND APPLICATION OF CLEAN TECHNOLOGIES
 ENERGY EFFICIENCY AND ENERGY SAVINGS
 DIVERSIFICATION OF ENERGY SOURCES
CONTENT
I.
OVERVIEW
II.
NEW REGULATORY FRAMEWORK: ENERGY REFORM
III. SPECIAL PROGRAM FOR RENEWABLE ENERGY
IV. INVESTMENT OPPORTUNITIES
V.
FINAL REMARKS
FINAL REMARKS
PUBLIC POLICY
(PARTICIPATIVE PROCESS)
FINANCING
LEGAL FRAMEWORK
ADMINISTRATIVE
Fondo de Sustentabilidad Energética
Fondo para la Transición Energética
ECONOMIC GROWTH + SOCIAL INCLUSION
TIMEFRAME FOR THE IMPLEMENTATION
OF THE ENERGY REFORM
SENER, WITH THE SUPPORT
OF CNH WILL ISSUE THE
CONGRESS DEADLINE FOR
PRESENTATION OF THE
NATIONAL ENERGY
STRATEGY TO CONGRESS
RATIFICATION OF THE
NATIONAL ENERGY
STRATEGY
PROPOSALS RESOLUTION
FOR
PROMULGATION
WITHIN 90
WITHIN 120
OF THE
CONSTITUTIONAL
REFORM
(20/ DEC/2013)
DAYS
DAYS
PEMEX IN ROUND
ZERO
14 APRIL
28
WITHIN 180
FEBRUARY
DAYS
STARTS ROUND ZERO. PEMEX
SUBMITS THEIR OILFIELDS OF
INTEREST TO SENER FOR ITS
CONSIDERATION
• ADEQUACY TO 26 SECONDARY
LAWS
• APPOINTMENT OF 2 ADDITIONAL
COMMISSIONERS TO CNH AND
2 FOR CRE FOR THEIR
STRENGTHENING (TO RATIFY IS
AN EXCLUSIVE FACULTY OF THE
SENATE)
THE FUTURE OF THE ENERGY REFORM IN MEXICO
SANTIAGO CREUHERAS
DIRECTOR GENERAL FOR ENERGY EFFICIENCY AND TECHNOLOGY INNOVATION
DEPARTMENT OF ENERGY
MEXICO
AUGUST 2014