Identifier
Created
Classification
Origin
09MEXICO299
2009-02-05 13:44:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Mexico
Cable title:
COOPERATION ON RENEWABLE ENERGY - AN OPENING TO ENGAGE
VZCZCXRO3807 PP RUEHCD RUEHGD RUEHHO RUEHMC RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM DE RUEHME #0299/01 0361344 ZNR UUUUU ZZH P 051344Z FEB 09 FM AMEMBASSY MEXICO TO RUEHC/SECSTATE WASHDC PRIORITY 4911 INFO RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE PRIORITY RUEATRS/DEPT OF TREASURY WASHINGTON DC RUCPDOC/DEPT OF COMMERCE WASHINGTON DC RUEHC/DEPT OF LABOR WASHINGTON DC RHMFISS/DEPT OF ENERGY WASHINGTON DC RHMFIUU/HQ USNORTHCOM RHMFISS/CDR USSOUTHCOM MIAMI FL RHEHAAA/NSC WASHINGTON DC
UNCLAS SECTION 01 OF 04 MEXICO 000299
SENSITIVE, SIPDIS
STATE FOR WHA/MEX, WHA/EPSC, EB/IFD/OMA, AND DRL/AWH
STATE FOR EEB/ESC
USDOC FOR 4320/ITA/MAC/WH/ONAFTA
USDOC FOR ITS/TD/ENERGY DIVISION
TREASURY FOR IA
DOE FOR INTERNATIONAL AFFAIRS
STATE PASS TO USTR
STATE PASS TO FEDERAL RESERVE
E.O. 12958: N/A
TAGS: ECON EFIN ENRG EINV PGOV SENV MX
SUBJECT: COOPERATION ON RENEWABLE ENERGY - AN OPENING TO ENGAGE
MEXICO
UNCLAS SECTION 01 OF 04 MEXICO 000299
SENSITIVE, SIPDIS
STATE FOR WHA/MEX, WHA/EPSC, EB/IFD/OMA, AND DRL/AWH
STATE FOR EEB/ESC
USDOC FOR 4320/ITA/MAC/WH/ONAFTA
USDOC FOR ITS/TD/ENERGY DIVISION
TREASURY FOR IA
DOE FOR INTERNATIONAL AFFAIRS
STATE PASS TO USTR
STATE PASS TO FEDERAL RESERVE
E.O. 12958: N/A
TAGS: ECON EFIN ENRG EINV PGOV SENV MX
SUBJECT: COOPERATION ON RENEWABLE ENERGY - AN OPENING TO ENGAGE
MEXICO
1)REF A: Mexico 42
2)REF B: Mexico 156
3)REF C: 08 Monterrey 397
1. (SBU) Summary: Efforts to deepen US-Mexican collaboration on
energy issues has been constrained in recent years by Mexico's
sensitivity about foreign involvement in the hydrocarbons sector.
Since the Calderon Administration's energy reform bill was approved
in October 2008 and oil prices have fallen, the Mexican government
has become more interested in stepping up cooperation. However,
Mexican sensitivities about creating full and formal bilateral
energy consultations remain. However, there are some opportunities
to work with Mexico on implementation of the energy reform bill (ref
A). Other opportunities to renew collaboration would involve
working with GOM officials on carefully crafted initiatives focused
exclusively on renewable energy and energy efficiency.
An Opportunity for Enhanced Collaboration
--------------
2.(SBU) Since the Calderon Administration's energy reform bill was
approved in October 2008, the Mexican government has become more
interested in deepening cooperation on some energy topics. Senior
officials of the Mexican Energy Secretariat (SENER) have expressed
interest in renewing bilateral cooperation - especially with respect
to renewable energy. SENER informally proposed creating a bilateral
public private partnership to promote renewable technology and
exchange lessons learned. Other priorities including passage and
implementation of the energy reform bill have put this issue on the
back burner for the moment, but officials here would be receptive to
reviving this concept. Mexican officials and academic institutions
have also expressed interest in developing closer partnerships.
3.(SBU) The Calderon Administration's interest in deepening
cooperation presents an opening and opportunity for the USG. In the
past, efforts to deepen US-Mexican collaboration on energy issues
have been constrained by Mexico's extreme sensitivity about foreign
- especially US - involvement in the hydrocarbons sector. US-Mexico
Technical Energy Consultations were last held in 1997 and bilateral
discussions on the margins of the Binational Commission have not
taken place for several years. Since 2001, the US, Mexico and
Canada have collaborated on trilateral energy initiatives through
the North American Energy Working Group. NAEWG is a valuable forum
for trilateral issues and has advanced discussions on reducing
barriers to clean energy technology and promoting energy efficiency.
GOM officials support the trilateral forum, and appreciate that it
gives them some "cover" for discussions with senior USG officials on
sensitive topics without engendering the type of public scrutiny a
bilateral forum would create. Energy topics remain sensitive and
Mexico does not propose a formal bilateral dialogue. However,
enhanced cooperation on renewable energy and energy efficiency could
pave the way forward to closer ties in many areas.
Mexico's Focus on Renewable Energy
--------------
4.(U) SENER forecasts that Mexico will have to spend $51 billion
(outside experts forecast $60 billion) over the next decade to meet
rising domestic demand for electricity which is projected to grow
five percent annually during the 2008-2017 planning cycle. The
Calderon Administration is committed to making renewable energy
sources play a significantly expanded role in meeting demand, even
as it continues expansion of natural gas-fired, combined turbine
generators. To signal its commitment, the Calderon Governments
National Infrastructure Plan set a target of 26 percent for
renewable generation capacity by 2012. Although Mexico is already
close to that figure, there is strong interest in expanding
renewable generation and developing these resources, both for
commercial and environmental reasons. (Note: Current electricity
generation in Mexico: natural gas 39%; fuel oil 27%; hydro 22.4%;
coal 6%; nuclear 3% and solar and geothermal 2%. End note)
5.(U) At the Poznan Ministerial on Climate Change, the Calderon
Administration became one of the few developing countries to set a
MEXICO 00000299 002 OF 004
specific greenhouse gas reduction target (ref B). Mexico announced
that it would reduce greenhouse gas emissions fifty percent from
2002 levels by 2050 by increasing clean and efficient energy
technologies - including wind and solar power. In tandem, Mexican
authorities have developed and implemented the mechanism necessary
to allow renewable energy projects in Mexico to qualify for the
obtainment of certified emissions reductions under the Kyoto
protocol and eventually participate in the emissions trading market.
The Energy Reform on Renewable Energy and
Energy Efficiency
--------------
6.(U) Although the Calderon Administration's October 2008 energy
reform focuses largely on strengthening PEMEX and regulating the
hydrocarbons sector, one segment of the package which has received
little attention addresses renewable energy and energy efficiency.
The objective of the renewable energy law is to reduce Mexico's
dependence on hydrocarbons by promoting specific renewable energy
technologies: wind, solar, hydro, tidal, geothermal, biofuels (as
stipulated in the biofuels law) and other technologies sanctioned by
the Secretary of Energy. (Note: The law explicitly excludes some
technologies including nuclear energy and methane from landfills
that do not comply with environmental rules. End Note)
7.(U) The energy reform bill charges SENER with creating a new
program to promote renewable energy by May, 2009. Resources will
be earmarked to foster the use renewable energy, energy efficiency
and savings; foster the use of clean energy, and diversify energy
sources. Three billion pesos (approximately $220 million dollars)
will be allocated to this annually in the federal budget 2009-2011.
8.(U) Beginning this year with an initial budget of 150 million
pesos ($10.5 million dollars),the Mexican NSF (CONACYT) will
operate two funds created under the energy reform bill: one on
hydrocarbons and another on energy sustainability. Funding will
represent 0.65 percent of the value of PEMEX oil and gas production.
The energy sustainability fund will support projects on energy
efficiency, renewable energy and clean technology, undertaken by
Mexican research institutions, to encourage linkages between the
academia and the productive sector and to promote technology and
related businesses.
Renewable Energy in Mexico - Policy Framework
--------------
9.(U) Mexico has significant renewable energy potential, especially
with respect to solar, wind and geothermal technologies. While
there are no constitutional restrictions covering the development of
renewable energy, Mexico lacks a framework to create the market
conditions necessary to promote development of these technologies.
The Comisisn Federal de Electricidad (CFE) and Luz y Fuerza del
Centro (LFC) are Mexico's two state-owned electricity companies.
CFE in particular dominates the electric power sector and accounts
for over 90 percent of generating capacity. Since 1992 private
participation has been allowed in generation activities (independent
power producers that sell all their power to CFE, self suppliers,
cogeneration and small scale generation, at no more than 30
megawatts). However, CFE and LFC control the transmission and
distribution of electricity. The cost and adequacy of transmission
has limited private participation in generating activities,
including renewable energy. Another related factor involves
geography. Those areas with the greatest potential for solar and
wind power generation are often geographically remote and far from
population centers.
10.(U) Although the Mexican constitution does restrict private
participation in the electricity sector, there are no restrictions
on private power generating facilities exporting electricity. Some
U.S. states like California and Texas with ambitious targets for
renewable energy generation have expressed interest in investing in
and importing "green" electricity from Mexico.
11.(U) Mexico does not provide subsidies for renewable energy
projects. The current budget crunch combined with the falling price
of oil have made financing renewable energy projects more difficult.
Although this may be a short-term problem, financing new projects
may be delayed in coming months.
MEXICO 00000299 003 OF 004
Wind
--------------
12.(U) There are few installed wind power projects in Mexico today,
but some experts project the country has an estimated wind power
potential of 40,000 megawatts country wide. (One megawatt roughly
is enough electricity to supply 1,000 homes in the US.) Wind energy
currently accounts for less than 2 percent of electricity
production. The GOM hopes to boost the nation's wind energy
potential to 5,000 megawatts - about 10 times its current output,
and is planning on a series of wind projects that should generate
2,500 megawatts of electricity by 2012. The key to a successful
wind energy project is identifying areas where the wind is
consistently strong. Among the most promising areas for wind
generation facilities in Mexico are Oaxaca, Baja California and the
Yucatan Peninsula.
13.(U) Several large wind energy projects are planned for an area
of Oaxaca known as La Ventosa or Windy which sits on a narrow
isthmus between the Gulf of Mexico and the Pacifica Ocean where
winds blow at 15 to 22 mph. On January 22 President Calderon opened
a $550 million dollar project in Oaxaca which will generate 250
megawatts of electricity when all 167 turbines are operational by
the end of 2009. This will make the 2,500 hectare project headed by
the Spanish firm Acciona Energia the largest of its kind in Latin
America. France's EDF - Energies Novelles is developing another
67.5 megawatt project in La Ventosa which could become commercial by
August 2009. This $200 million dollar project will provide
electricity to 350 Wal-Mart stores in Central Mexico under the GOM's
self supply rules.
14.(U) Another promising area for wind power generation is Baja
California. In La Rumorosa, Baja California, a San Diego-based U.S.
company is working on a $400 million project which involves the
installation of 125 power generating wind turbines by 2010. Most of
the accumulated production of 250 megawatts will likely be exported
to California and Arizona.
15.(U) The Mexican state of Nuevo Leon (REF C) is also pursuing
wind energy projects. One such project, the Eolica Santa Catarina
project run by Econergy is a $50 million project will have a total
generating capacity of 20 megawatts. Monterrey Tec is also
exploring the use of wind energy to better meet Mexico's needs.
Geothermal and Solar
--------------
16.(U) Geothermal and solar energy currently account for only 2
percent of Mexican electricity generation, but Mexico has
significant potential in both of these areas. Mexico is already the
world's third largest producer of geothermal electricity (after the
U.S. and Philippines) with an installed capacity of 1,000 megawatts.
Industry experts estimate that Mexico has the potential to increase
installed geothermal capacity to 8,000 megawatts. The GOM has
expressed particular interest in working with the USG in these two
areas.
17.(U) Like other sources of renewable energy, transmission issues
have slowed solar energy growth. Current solar and geothermal
projects are largely concentrated in Northern Mexico, particularly
Baja California, where large tracts of land are more readily
available. Japanese electronics giant Kyocera recently announced
plans to invest over $33 million to expand its solar panel
production plant in Baja California. Kyocera located in Tijuana
because of its proximity to the U.S. and also to be better placed in
the Mexican market. The firm plans to increase its annual
production capacity from 35 megawatts per year to over 150 megawatts
worth of solar panel production. Kyocera hopes that solar power
will be appealing to remote regions whose residents already depend
on generators and other devices to supplement electricity supply.
Hydro
--------------
MEXICO 00000299 004 OF 004
18.(U) Hydropower has and will continue to play a significant role
in helping Mexico meet its electricity demand. Hydro currently
accounts for over 20% of Mexico's electricity needs. Currently much
of Mexico's hydropower comes from small, outdated plants. (There
are however, large new hydro plants will be coming on line soon.
One such facility, the 750 megawatt El Cajon dam in the state of
Nayarit is funded with foreign capital and began production July
2007. Another hydroelectric project is La Yesca, with 750 megawatts
valued at USD 767 million. Work started on Jan 2008 and should be
operational by June 2012.
Comment and Next Steps:
--------------
19.(SBU) The GOM is interested in working more closely with the USG
on renewable energy, energy efficiency and climate change, but does
not want to establish a formal bilateral energy dialogue. Post
believes that this is a significant opportunity to develop closer
ties in an area in which collaboration is not sensitive and would
benefit both countries. Embassy Mexico is exploring several options
with Mexican officials, NGOs, companies as well as the Canadian and
British Embassies on how we can better coordinate our efforts on
these topics. We have found both government and private sector
interlocutors eager to engage. We will continue to discuss with GOM
officials how best to craft a government to government initiative on
renewable energy.
20. Post is also looking at opportunities for expanding outreach on
renewable energy and climate change - both through public speaking
opportunities for Embassy personnel as well as proposals for a
modest speakers program focused on the social and policy barriers
renewable energy projects face. We also see opportunities to use
the existing voluntary visitor programs to target government and
private sector representatives active in these areas. Post is
exploring with the GOM and Embassy of Canada the establishment of a
trilateral (U.S.-Mexico-Canada) working group to coordinate these
topics.
BASSETT
SENSITIVE, SIPDIS
STATE FOR WHA/MEX, WHA/EPSC, EB/IFD/OMA, AND DRL/AWH
STATE FOR EEB/ESC
USDOC FOR 4320/ITA/MAC/WH/ONAFTA
USDOC FOR ITS/TD/ENERGY DIVISION
TREASURY FOR IA
DOE FOR INTERNATIONAL AFFAIRS
STATE PASS TO USTR
STATE PASS TO FEDERAL RESERVE
E.O. 12958: N/A
TAGS: ECON EFIN ENRG EINV PGOV SENV MX
SUBJECT: COOPERATION ON RENEWABLE ENERGY - AN OPENING TO ENGAGE
MEXICO
1)REF A: Mexico 42
2)REF B: Mexico 156
3)REF C: 08 Monterrey 397
1. (SBU) Summary: Efforts to deepen US-Mexican collaboration on
energy issues has been constrained in recent years by Mexico's
sensitivity about foreign involvement in the hydrocarbons sector.
Since the Calderon Administration's energy reform bill was approved
in October 2008 and oil prices have fallen, the Mexican government
has become more interested in stepping up cooperation. However,
Mexican sensitivities about creating full and formal bilateral
energy consultations remain. However, there are some opportunities
to work with Mexico on implementation of the energy reform bill (ref
A). Other opportunities to renew collaboration would involve
working with GOM officials on carefully crafted initiatives focused
exclusively on renewable energy and energy efficiency.
An Opportunity for Enhanced Collaboration
--------------
2.(SBU) Since the Calderon Administration's energy reform bill was
approved in October 2008, the Mexican government has become more
interested in deepening cooperation on some energy topics. Senior
officials of the Mexican Energy Secretariat (SENER) have expressed
interest in renewing bilateral cooperation - especially with respect
to renewable energy. SENER informally proposed creating a bilateral
public private partnership to promote renewable technology and
exchange lessons learned. Other priorities including passage and
implementation of the energy reform bill have put this issue on the
back burner for the moment, but officials here would be receptive to
reviving this concept. Mexican officials and academic institutions
have also expressed interest in developing closer partnerships.
3.(SBU) The Calderon Administration's interest in deepening
cooperation presents an opening and opportunity for the USG. In the
past, efforts to deepen US-Mexican collaboration on energy issues
have been constrained by Mexico's extreme sensitivity about foreign
- especially US - involvement in the hydrocarbons sector. US-Mexico
Technical Energy Consultations were last held in 1997 and bilateral
discussions on the margins of the Binational Commission have not
taken place for several years. Since 2001, the US, Mexico and
Canada have collaborated on trilateral energy initiatives through
the North American Energy Working Group. NAEWG is a valuable forum
for trilateral issues and has advanced discussions on reducing
barriers to clean energy technology and promoting energy efficiency.
GOM officials support the trilateral forum, and appreciate that it
gives them some "cover" for discussions with senior USG officials on
sensitive topics without engendering the type of public scrutiny a
bilateral forum would create. Energy topics remain sensitive and
Mexico does not propose a formal bilateral dialogue. However,
enhanced cooperation on renewable energy and energy efficiency could
pave the way forward to closer ties in many areas.
Mexico's Focus on Renewable Energy
--------------
4.(U) SENER forecasts that Mexico will have to spend $51 billion
(outside experts forecast $60 billion) over the next decade to meet
rising domestic demand for electricity which is projected to grow
five percent annually during the 2008-2017 planning cycle. The
Calderon Administration is committed to making renewable energy
sources play a significantly expanded role in meeting demand, even
as it continues expansion of natural gas-fired, combined turbine
generators. To signal its commitment, the Calderon Governments
National Infrastructure Plan set a target of 26 percent for
renewable generation capacity by 2012. Although Mexico is already
close to that figure, there is strong interest in expanding
renewable generation and developing these resources, both for
commercial and environmental reasons. (Note: Current electricity
generation in Mexico: natural gas 39%; fuel oil 27%; hydro 22.4%;
coal 6%; nuclear 3% and solar and geothermal 2%. End note)
5.(U) At the Poznan Ministerial on Climate Change, the Calderon
Administration became one of the few developing countries to set a
MEXICO 00000299 002 OF 004
specific greenhouse gas reduction target (ref B). Mexico announced
that it would reduce greenhouse gas emissions fifty percent from
2002 levels by 2050 by increasing clean and efficient energy
technologies - including wind and solar power. In tandem, Mexican
authorities have developed and implemented the mechanism necessary
to allow renewable energy projects in Mexico to qualify for the
obtainment of certified emissions reductions under the Kyoto
protocol and eventually participate in the emissions trading market.
The Energy Reform on Renewable Energy and
Energy Efficiency
--------------
6.(U) Although the Calderon Administration's October 2008 energy
reform focuses largely on strengthening PEMEX and regulating the
hydrocarbons sector, one segment of the package which has received
little attention addresses renewable energy and energy efficiency.
The objective of the renewable energy law is to reduce Mexico's
dependence on hydrocarbons by promoting specific renewable energy
technologies: wind, solar, hydro, tidal, geothermal, biofuels (as
stipulated in the biofuels law) and other technologies sanctioned by
the Secretary of Energy. (Note: The law explicitly excludes some
technologies including nuclear energy and methane from landfills
that do not comply with environmental rules. End Note)
7.(U) The energy reform bill charges SENER with creating a new
program to promote renewable energy by May, 2009. Resources will
be earmarked to foster the use renewable energy, energy efficiency
and savings; foster the use of clean energy, and diversify energy
sources. Three billion pesos (approximately $220 million dollars)
will be allocated to this annually in the federal budget 2009-2011.
8.(U) Beginning this year with an initial budget of 150 million
pesos ($10.5 million dollars),the Mexican NSF (CONACYT) will
operate two funds created under the energy reform bill: one on
hydrocarbons and another on energy sustainability. Funding will
represent 0.65 percent of the value of PEMEX oil and gas production.
The energy sustainability fund will support projects on energy
efficiency, renewable energy and clean technology, undertaken by
Mexican research institutions, to encourage linkages between the
academia and the productive sector and to promote technology and
related businesses.
Renewable Energy in Mexico - Policy Framework
--------------
9.(U) Mexico has significant renewable energy potential, especially
with respect to solar, wind and geothermal technologies. While
there are no constitutional restrictions covering the development of
renewable energy, Mexico lacks a framework to create the market
conditions necessary to promote development of these technologies.
The Comisisn Federal de Electricidad (CFE) and Luz y Fuerza del
Centro (LFC) are Mexico's two state-owned electricity companies.
CFE in particular dominates the electric power sector and accounts
for over 90 percent of generating capacity. Since 1992 private
participation has been allowed in generation activities (independent
power producers that sell all their power to CFE, self suppliers,
cogeneration and small scale generation, at no more than 30
megawatts). However, CFE and LFC control the transmission and
distribution of electricity. The cost and adequacy of transmission
has limited private participation in generating activities,
including renewable energy. Another related factor involves
geography. Those areas with the greatest potential for solar and
wind power generation are often geographically remote and far from
population centers.
10.(U) Although the Mexican constitution does restrict private
participation in the electricity sector, there are no restrictions
on private power generating facilities exporting electricity. Some
U.S. states like California and Texas with ambitious targets for
renewable energy generation have expressed interest in investing in
and importing "green" electricity from Mexico.
11.(U) Mexico does not provide subsidies for renewable energy
projects. The current budget crunch combined with the falling price
of oil have made financing renewable energy projects more difficult.
Although this may be a short-term problem, financing new projects
may be delayed in coming months.
MEXICO 00000299 003 OF 004
Wind
--------------
12.(U) There are few installed wind power projects in Mexico today,
but some experts project the country has an estimated wind power
potential of 40,000 megawatts country wide. (One megawatt roughly
is enough electricity to supply 1,000 homes in the US.) Wind energy
currently accounts for less than 2 percent of electricity
production. The GOM hopes to boost the nation's wind energy
potential to 5,000 megawatts - about 10 times its current output,
and is planning on a series of wind projects that should generate
2,500 megawatts of electricity by 2012. The key to a successful
wind energy project is identifying areas where the wind is
consistently strong. Among the most promising areas for wind
generation facilities in Mexico are Oaxaca, Baja California and the
Yucatan Peninsula.
13.(U) Several large wind energy projects are planned for an area
of Oaxaca known as La Ventosa or Windy which sits on a narrow
isthmus between the Gulf of Mexico and the Pacifica Ocean where
winds blow at 15 to 22 mph. On January 22 President Calderon opened
a $550 million dollar project in Oaxaca which will generate 250
megawatts of electricity when all 167 turbines are operational by
the end of 2009. This will make the 2,500 hectare project headed by
the Spanish firm Acciona Energia the largest of its kind in Latin
America. France's EDF - Energies Novelles is developing another
67.5 megawatt project in La Ventosa which could become commercial by
August 2009. This $200 million dollar project will provide
electricity to 350 Wal-Mart stores in Central Mexico under the GOM's
self supply rules.
14.(U) Another promising area for wind power generation is Baja
California. In La Rumorosa, Baja California, a San Diego-based U.S.
company is working on a $400 million project which involves the
installation of 125 power generating wind turbines by 2010. Most of
the accumulated production of 250 megawatts will likely be exported
to California and Arizona.
15.(U) The Mexican state of Nuevo Leon (REF C) is also pursuing
wind energy projects. One such project, the Eolica Santa Catarina
project run by Econergy is a $50 million project will have a total
generating capacity of 20 megawatts. Monterrey Tec is also
exploring the use of wind energy to better meet Mexico's needs.
Geothermal and Solar
--------------
16.(U) Geothermal and solar energy currently account for only 2
percent of Mexican electricity generation, but Mexico has
significant potential in both of these areas. Mexico is already the
world's third largest producer of geothermal electricity (after the
U.S. and Philippines) with an installed capacity of 1,000 megawatts.
Industry experts estimate that Mexico has the potential to increase
installed geothermal capacity to 8,000 megawatts. The GOM has
expressed particular interest in working with the USG in these two
areas.
17.(U) Like other sources of renewable energy, transmission issues
have slowed solar energy growth. Current solar and geothermal
projects are largely concentrated in Northern Mexico, particularly
Baja California, where large tracts of land are more readily
available. Japanese electronics giant Kyocera recently announced
plans to invest over $33 million to expand its solar panel
production plant in Baja California. Kyocera located in Tijuana
because of its proximity to the U.S. and also to be better placed in
the Mexican market. The firm plans to increase its annual
production capacity from 35 megawatts per year to over 150 megawatts
worth of solar panel production. Kyocera hopes that solar power
will be appealing to remote regions whose residents already depend
on generators and other devices to supplement electricity supply.
Hydro
--------------
MEXICO 00000299 004 OF 004
18.(U) Hydropower has and will continue to play a significant role
in helping Mexico meet its electricity demand. Hydro currently
accounts for over 20% of Mexico's electricity needs. Currently much
of Mexico's hydropower comes from small, outdated plants. (There
are however, large new hydro plants will be coming on line soon.
One such facility, the 750 megawatt El Cajon dam in the state of
Nayarit is funded with foreign capital and began production July
2007. Another hydroelectric project is La Yesca, with 750 megawatts
valued at USD 767 million. Work started on Jan 2008 and should be
operational by June 2012.
Comment and Next Steps:
--------------
19.(SBU) The GOM is interested in working more closely with the USG
on renewable energy, energy efficiency and climate change, but does
not want to establish a formal bilateral energy dialogue. Post
believes that this is a significant opportunity to develop closer
ties in an area in which collaboration is not sensitive and would
benefit both countries. Embassy Mexico is exploring several options
with Mexican officials, NGOs, companies as well as the Canadian and
British Embassies on how we can better coordinate our efforts on
these topics. We have found both government and private sector
interlocutors eager to engage. We will continue to discuss with GOM
officials how best to craft a government to government initiative on
renewable energy.
20. Post is also looking at opportunities for expanding outreach on
renewable energy and climate change - both through public speaking
opportunities for Embassy personnel as well as proposals for a
modest speakers program focused on the social and policy barriers
renewable energy projects face. We also see opportunities to use
the existing voluntary visitor programs to target government and
private sector representatives active in these areas. Post is
exploring with the GOM and Embassy of Canada the establishment of a
trilateral (U.S.-Mexico-Canada) working group to coordinate these
topics.
BASSETT