Top Ten Highlights of Cleantech in Mexico

Over the last few years, there has been a large decrease in the crude oil production in Mexico. To counter the effects of it, the Mexican government has started to look for new venues for energy that would create less of a dependence on fossil fuels.

1) Renewable Energy Potential. The United States Department of Energy states that Mexico “places great importance of the development of renewable energy” and that further expansion is likely. With Los Angeles and Belize already purchasing geothermal power from Mexico, and a deal with Guatemala in the works, Mexico is realizing its potential as a renewable energy power player. By 2005, the government approved 50 renewable energy projects, completed by 2007 and supplied 1,400 MW of energy. Aside from exporting renewable sources, renewable energy manufacturing is also big. There is a photovoltaic module manufacturing plant, a Sanyo solar manufacturing plant, two wind turbine blade manufacturing plants, as well as a German thin-film solar cells manufacturing plant.

2) Mexico Renewable Energy Program. The Mexico Renewable Energy Program aims at promoting sustainable and appropriate use of renewable energy technologies throughout Mexico. By doing so, it would “increase the quality and to reduce the costs of renewable energy technologies…; increase the use of clean energy sources to combat global climate change (reducing greenhouse gas emissions) and to protect our natural environment by limiting pollution; and increase the economic, social, and health standards in rural off-grid households and communities by utilizing renewable energy systems for productive applications.” The focus of the program is to use renewable energy technologies, mainly photovoltaics and small wind, to produce necessary cost-effective electricity.

3) Benefits of United States – Mexico Partnerships. In the beginning of 1993, the United States Department of Energy’s Sandia National Laboratories assisted in the installation of photovoltaic systems in rural locations throughout Mexico. More than 250 photovoltaic systems and wind energy and water pumping systems have since been installed, as well as an additional 150 other renewable energy projects throughout Mexico. According the Michal Ross, Sandia program manager, “These programs seek to improve the economies of some of the poorest areas of rural Mexico by increasing the profitability of small ranches while also promoting the use of renewable energy technology, reducing pollution from fuel-powered generations, and broadening the renewable energy market outside the U…It benefits everyone involved.”

4) Renewable Energy for Agriculture Project. The Renewable Energy for Agriculture Project provides electricity in rural areas for purposes of production, through the use of renewable energy technologies. It supports productive investments as well as improved farming practices. Managed by FIRCO, under the Mexican Ministry of Agriculture, the program is expected to provide more than 1,200 photovoltaic systems and 55 wind systems of isolated, rural areas. Though primarily used for pumping water, it can be adapted for other uses that would elevate social, economic, and health standards of many Mexican agricultural areas. Also supplied is technical assistance, promotional campaigns, and a project management.

5) National Commission of Energy and the Environment. The National Commission of Energy and the Environment is one of Mexico’s main organizations set to develop standards of energy efficiency as well as increase promotion of the utilization of sustainable energy. It is one of the most comprehensive programs throughout all of Lain America. The commission assisted with the adoption of the Law on Sustainable Energy Use in 2008 as well as the regulations implementation. In 2009, it assisted in passing broad-based labeling requirements for energy efficiency.

6) Renewable Energy Usage and Energy Transition Financing Act. Passed in 2008 by the Mexican Congress, the Renewable Energy Usage and Energy Transition Financing Act, has become the strongest legislative action towards the implementation of climate change policy along federal levels. It sets up rules and guidelines for private self renewable energy generation. According to the Constitution of Mexico, the government has control over the generation, transportation, transformation, and distribution of electricity for public usage. This law does not change the prerogative of the government, but instead increases the available of clean technologies and renewable energy to be used other than through being provided to the public – simply put, private individuals are able to generate their own electricity. This legislative step has been a positive shift in Mexico’s move toward renewable energy independence. Also part of the legislation is the “National Strategy for Energy Transition and Sustainable Energy Use,” via which the Mexican government provides for sustainability and efficiency.

7) Mexico Green Building Council. The Mexico Green Building Council, a nonprofit organization, looks to “promote sustainable building developments through environmental planning.” It has many goals that are based up the focus and understanding of market performance, environmental requirements, and social needs. The council provides a range of activities, including information dissemination on ecological sustainability and building; professional development to expand knowledge of the sustainability field; institutional management; industry correlation; and creation of associations and alliances that will increase initiatives for high-environmental, low-energy performance buildings. One of the main goals is the promotion of environmentally regenerative, economically profitable, and socially responsible designs, construction, as well as operation of all real estate developments and buildings.

8 ) Intertek Mexico. One of the first environmentally friendly facilities is being erected in Mexico City – Interek Mexico relocated in 2010 to new headquarters that contain the latest in energy efficient, environmentally friendly design and engineering technologies. Some of the green designs incorporated into the building includes water conservation, landscaping at the center of the building to reduce carbon emissions, waste reduction and management, and energy conservation and efficiency.

9) Trust Fund for Electric Energy Savings. The Trust Fund for Electric Energy Savings, known as FIDE, is a Mexican-based private trust fund that provides assistance to cultivate savings and efficient utilization of electric energy, preserve the environment, and contribute to social and economic development throughout commercial, industrial, municipal, and residential sectors. FIDE offers financing and technical support to end-users in the development of energy efficient actions, including assessments and audits, as well as acquisition and installation of equipment that is energy efficient. FIDE creates national and regional programs to increase energy efficiency.

10) Solar Mexico. Solar Mexico is a private initiative that works with the Mexican Foundation for Rural Development and is sustained through private donations from Mexico, the United States, and others. The mission is to supply renewable sources of energy to poor, rural families and improve their quality of life in ways that are socially and environmentally beneficial, this includes items such as solar ovens, battery-less flashlights, and solar water distillers.

Article by Shawn Lesser, president and founder of Atlanta-based Sustainable World Capital, which is focused on fund-raising for private equity cleantech/sustainable funds, as well as private cleantech companies and M&A. He is also a co- founder of the GCCA Global Cleantech Cluster Association, and can be reached at shawn.lesser@sworldcap.com