Why this is important to Wisconsin businesses: Wisconsin companies can contribute to expansion of this power source.

Renewable energy has not been a priority in Mexico, mainly because of the importance of oil. Fully 85 percent of the energy consumed in the country comes from fossil fuel sources. But the current director of the Federal Electricity Commission (CFE in Spanish) has announced a goal of increasing the use of renewable energy by 23 percent by 2018. To bring this about, Mexico has a source of renewable energy that has been widely discussed due to the potential ecological impact: hydroelectric dams. Hydroelectric power is a renewable source, but dams can affect biodiversity in the surrounding area.

Since 1937, when the CFE was created, the country has built 64 hydroelectric plants; of these, 20 are of great importance, and the remaining 44 are small. 57 are hydroelectric plants that produce electricity, and seven are out of operation. In all, there are 181 generating units of this type.

Hydroelectric dams do not usually count toward rates of renewable energy use, and they are not favored in the international renewable energy community due to their impact on the environment. At the moment, solar energy, ocean energy, geothermal, thermal and biomass are favored. Although Mexico is not particularly water-stressed, it suffers from an uneven distribution of water resources, as well as pollution and inadequate infrastructure which constrain access to clean drinking water.

According to the General Law for Climate Change, the country has set the goal of generating 35 percent of its energy needs from renewable sources by 2024. Mexico’s CFE director wants the country’s 53 hydroelectric projects to be counted toward its renewable energy total. The country’s hydroelectric potential has not been fully realized. Hydropower is the renewable energy source with the highest installed capacity within the country (11,603 MW), while geothermal power capacity (958 MW) in Mexico ranks fourth in the use of this energy worldwide.

Mexico has enacted secondary legislation that creates a competitive power market open to private investment in almost all areas. As part of a package of nine new laws covering the energy sector and amendments to 12 existing laws, a new electric industry law (Ley de la Industria Eléctrica) took effect in 2014.

Operational control over the national grid (Sistema Eléctrico Nacional) and the transmission and distribution of electricity are considered strategic areas that will remain in the hands of the Mexican government through a state entity. However, the private sector will be able to participate in transmission and distribution of electricity through agreements and joint ventures with state-owned agencies. CFE will become a fully competitive entity as a “productive state enterprise” under the new law, and will be permitted to participate, through separate subsidiaries, in the different market activities. CFE will continue to be the supplier of basic retail services to residential customers and small and midsize commercial customers under regulated tariffs. None of CFE’s assets will be privatized.