Mexico City.- For Mexico to meet its climate goals, it must transition to an energy matrix with more renewables, which would require investments of up to 340 billion dollars by 2030.
Of the total estimated, it is expected that the construction of new renewable energy plants will require investments of up to 180 billion dollars by 2030, according to the report “Understanding the Financial Needs for a Just Transition of the Mexican Electric Sector” by the New Climate Institute.
In order for power plants to be able to distribute the cheap energy generated to the areas where it is needed, it is essential to strengthen and expand the electrical grids, which could cost up to 160 billion dollars.
Last year, Mexico pledged at the Conference of the Parties on Climate Change (COP 27) to increase its transition goal, from reducing greenhouse gas emissions by 30 to 35 percent by 2030.
The above is intended to align with the global goal of keeping the increase in the Earth’s temperature below 1.5 degrees Celsius and achieving net zero emissions by 2050.
To achieve this, in addition to the massive incorporation of renewables, the gradual elimination of energy produced using fossil fuels is required, which implies the need for international financing, mainly in emerging countries such as Mexico.
However, there is still no clear and specific roadmap of the plans to follow, considering that the country has a large amount of energy generated from fossil fuels.
“Given that the Mexican energy sector is heavily dependent on fossil gas, the early retirement of some fossil gas capacity becomes as important a part of achieving this goal as the cancellation of already planned capacities. Financial compensation for potential economic losses may be justified for such early retirements,” the report adds.
Jorge Villareal, director of Climate Policy at the Climate Initiative of Mexico, said that in order to decarbonize the energy sector – especially the electric sector – there must be no more investment in fossil infrastructure after 2027.
Meanwhile, Nelson Delgado, general director of the Mexican Solar Energy Association (Asolmex), said that it is necessary to structure the how of the transition, and that while it should be led by the State, it must also be accompanied by an institutional transformation and the support of other actors.
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