Hydrogen economy

Mexican industry and government begin to think about hydrogen.

Green hydrogen is a high potential alternative fuel made with renewable energy and there is a growing buzz around it in Latin America.

Mexico, with an abundance of renewable energy potential, has a natural endowment that could be leveraged to drive growth in the sector. Unfortunately, the current political environment means that projects are likely to develop slower than desired.

A promoter of hydrogen in Mexico explained, “We have some of the best conditions in the world to create hydrogen from water using photovoltaic and wind energy. There is a huge potential but we need to get the early adopters moving, most likely industry, these will be followed by sustainable transportation and finally power generation.”

“We have some of the best conditions in the world to create hydrogen from water using photovoltaic and wind energy.”

Promoter of hydrogen, Mexico

There is growing pressure on countries and companies to comply with global sustainability commitments and move towards zero admissions. Therefore, it is in the interests of industry to advance towards hydrogen as a power source for industrial activity sooner rather than later. This is already happening in renewables with many industrial groups signing power purchase agreements directly with wind and solar energy generators.

An industrial consultant with an interest in hydrogen commented, “The industrial groups are the ultimate beneficiaries of a switch to hydrogen so by being first movers, they can help to stimulate the growth of the market and private investment. The pressure on industry will only grow under the United States-Mexico-Canada agreement (USMCA), they should act now.”

“The pressure on industry will only grow under the United States-Mexico-Canada agreement (USMCA), they should act now.”

Industrial consultant, Mexico

The most significant barrier to the growth of the hydrogen economy in Mexico is the government. President Andrés Manuel López Obrador (AMLO) has been staunch in his defence of traditional energy sources based on fossil fuels. An energy industry executive has some optimism, “The reform of the electricity industry is a terrible message for investment, however, given its notorious unconstitutionality, it will be challenged and Mexico cannot ignore its international commitments forever.”

A representative of the renewable energy association in Mexico believes the government’s position isn’t sustainable, “The blackouts must be a wake-up call – energy sovereignty is not the same as energy security. It will become more and more expensive [to ignore renewables], PEMEX’s financial statements emphasise the huge cost of feeding inefficient industries and ‘white elephants.'”

The promoter of hydrogen in Mexico also has some optimism for the medium term, “It seems to me that there is an opportunity to sell the idea to the federal government that betting on hydrogen would create their own legacy, separate from the renewables initiatives of previous governments.”

There are also some allies in government who have a more favourable view of renewables and hydrogen than the leadership, according to the representative of the renewable energy association, “Marcelo Ebrard (Secretary of Foreign Affairs) and Claudia Sheinbaum (head of government of Mexico City), are supportive, are sensitive to innovation and environmental protection. With them you have to start raising awareness about the potential that exists with green hydrogen.”

In fact, hydrogen already appears in the Programme for the Development of the National Electricity System 2020-2034, which suggest some interest in a gradual adoption of hydrogen.

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