Opportunities for Energy Efficiency in Mexico
Despite unexpected challenges, Mexico's drive for higher energy efficiency continues to create opportunities for businesses and solutions providers. We think that roughly $10 billion to $12 billion U.S. dollars of investment will be needed to upgrade energy efficiency across Mexico over the next 15 years. The coronavirus crisis delayed some of this work, but the nation's long-term needs remain.
Upgrading systems typically disrupts workflow, but that is less of an issue with many workplaces temporarily empty or operating at reduced capacity. Furthermore, a substantial number of improvements can be made by a single person, which allows companies to put some employees to work while complying with social distancing requirements.
Legislation is Key to Driving Adoption
The effort to improve energy efficiency began with Mexico’s Energy Transition Law in 2015, and that legislation still provides a framework for policy. The Ministry of Energy plays a central role in coordinating the actions of agencies dedicated to specific tasks. The National Commission for the Efficient Use of Energy (CONUEE) provides guidance to these agencies via the Energy Efficiency Roadmap.
The roadmap lays out energy efficiency targets, sets priorities for policies, and establishes rules for ensuring compliance. PRONASE includes the projects initiated to achieve the power-saving goals set by the roadmap. Perhaps most importantly, the Finance Ministry sets up policies and financial incentives to encourage investments in energy efficiency.
Regulatory Policy Goals Support Fundamentals
While policymakers set short-term objectives along the way, Mexico's overall energy efficiency goals remain relatively fixed. Spreading information about the advantages of energy efficiency is often the first step. Furthermore, standardization makes it easier to compare the energy efficiency of different options.
Consumers and businesses typically do not realize how much money can be saved by upgrading to energy-efficient displays, air conditioners, and other technologies. However, information is only one part of encouraging energy efficiency. Making financing available is the other half of the equation.
Mexico Energy Partners provides client's with energy efficiency improvements with no upfront costs. Customers can pay for equipment and solutions from the realized savings. Many efficiency improvements pay for themselves in just a few years, but businesses and consumers frequently do not have enough capital to make the upgrades.
Specific programs were created to assist firms and households in making the transition to power-saving technology. The Eco-Crédito Empresaria is perhaps the most important for small and medium-sized businesses. This credit helps firms upgrade their equipment to more energy-efficient technology.
There are also programs that can help individual consumers. FOTEASE is a fund that provides households with financing for replacing inefficient old appliances with new ones. FOTEASE also supports efforts to switch public lighting to LEDs and other technologies that use less power. Finally, FIRA offers credit and guarantees to rural agribusinesses to improve their energy efficiency.
Most businesses are aware of the advantages of LED lights and monitors, but there are far more ways to improve efficiency. At Mexico Energy Partners, we use new technology to find areas for improvement. For example, RealWear's head-mounted augmented reality Android devices allow us to see live thermal images and building diagrams so that businesses can take the most effective steps to boost energy efficiency. Older windows, doors, and ventilation systems in any workplace often allow a surprising amount of heat in or out.
Heavy industry and agriculture use more electricity than most other businesses, so the potential savings are correspondingly higher. Irrigation systems, tractors, cooling systems, and manufacturing equipment can all benefit from the solutions we provide for improved energy efficiency.
Achieving Energy Efficiency Today
Energy efficiency helps businesses to save money while also helping to save the planet. Unfortunately, too many firms lack the capital needed to make these improvements, especially during a recession. However, now could be the best time to act. Financing programs let businesses take advantage of this downtime to make energy efficiency improvements without disrupting the workplace. Contact Mexico Energy Partners today.
Also in Mexico Energy Insights
The coronavirus crisis placed many businesses in the unusual position of being able to save significant amounts of money through improved energy efficiency during protracted shutdowns. There are specific best practices that firms can use to determine how much they can save, safely make the changes, and then reverse the process when business starts up again.
Businesses and other organizations use 76% of the energy produced in Mexico, and they are increasingly interested in procuring renewable energy. Over 1,500 firms already use renewables, and capacity keeps rising. Mexico reached over 24,000 MW of sustainable energy capacity in 2019. As the number of market participants rises and the depth of the market increases, renewable power becomes more reliable and cost-effective.