Power Play

Mexico’s renewable energy race in the presidential arena.

Mexico’s upcoming presidential elections are shaping up to be a showdown between two formidable contenders: Claudia Sheinbaum, the appointed successor of President Andrés Manuel López Obrador, and Xóchitl Gálvez, the named candidate of the opposition coalition. While Sheinbaum currently holds a significant lead in the polls, both candidates are signalling a commitment to accelerating Mexico’s renewable energy transition. 

Claudia Sheinbaum, a former climate scientist with a Ph.D. in energy engineering from the National Autonomous University of Mexico (“UNAM”), brings a wealth of expertise to the table and has a strong track record in advocating for renewable energy. “She is focused on seeking a balance between public participation, maintaining the spirit of the 4T on an axis of energy sovereignty and at the same time achieving a goal of zero net emissions,” reported a senior consultant specialising in renewable energy. 

As mayor of Mexico City, Sheinbaum championed initiatives such as rooftop solar and sustainable transport, demonstrating her commitment to a more sustainable energy mix. “There is also a commitment to improve public-private transport through renewable energies, so not only in the energy sector, but also to participate in sustainable mobility.” The entrepreneurial manager in the renewable energy sector agreed, “On Claudia’s side, to the extent that she breaks the chains of obedience and loyalty that bind her to Andrés Manuel’s vision, it could be a great transition towards greater private participation.” 

“on Claudias side, to the extent that she breaks the chains of obedience and loyalty that bind her to Andrés Manuels vision, it could be a great transition towards greater private participation.”

Entrepreneurial manager in the renewable energy sector, Mexico

However, Sheinbaum faces the challenge of reconciling her vision for renewable energy with the policies of her predecessor, President López Obrador, who prioritised “energy sovereignty” over the clean energy transition and private investment “to achieve this goal of zero emission.” While she has defended López Obrador’s fossil fuel policies, Sheinbaum has also articulated her intention to accelerate the development of renewables, advocating for state investment in lithium extraction and solar power plants. 

On the opposing side of the presidential race, Xóchitl Gálvez has positioned herself as a staunch advocate for Mexico’s renewable energy transition and “goes more for a model of openness, very similar to what we had before, even taking up a proposal for reform in Pemex that was explored earlier,” reviewed the consultant. Described as the “bull in a china shop” of Mexico’s energy industry, Gálvez has been vocal about the need for increased private investment in clean energy and the reduction of greenhouse gas emissions.  

A specialist in renewable energy commented, “I find Xóchitl’s proposal more attractive, given the level of erosion that has taken place in the energy market during this administration. I find it difficult to make a shift back to the previous model in the short term, it seems utopian.” The election presents opportunities for reinvestment in the energy market, albeit “not as widely as in the past.”  

Gálvez has proposed bringing back power auctions and has even floated the idea of privatising Pemex, the heavily indebted state oil company, signalling a bold departure from traditional energy policies. Essentially though “their challenge is very similar: how to rebuild a sustainable energy market under the current circumstances, legal uncertainty, institutional destruction, loss of talent, but above all loss of investor confidence, and with debts that seem irretrievable.” The entrepreneurial manager in the renewable energy sector continued, “In any case, whoever wins, the starting point is further back than it was 6 years ago.” 

“Their challenge is very similar: how to rebuild a sustainable energy market under the current circumstances, legal uncertainty, institutional destruction, loss of talent, but above all loss of investor confidence, and with debts that seem irretrievable.”

Renewable energy sector entrepreneur, Mexico

A renewed focus on reducing greenhouse gas emissions aligns with global efforts to combat climate change, positioning Mexico as a leader in sustainable development. It all sounds great, but “the basic problem with both proposals is the lack of sufficient funds to adjust what needs to be adjusted.” The senior consultant elaborated, “No matter the model, if the bet continues to be on maintaining Pemex, resources are needed for its deep reform.” 

“The most criticised aspect of the previous reform, or rather, the greatest resistance, had to do with the way in which companies developed projects claiming to have social compensation, but in reality, did not take the community into account and the community did not benefit from the spillover of the project.” The privatisation of Pemex, while potentially beneficial in addressing the company’s financial woes, would likely face significant political and social resistance.

As Mexico prepares for its presidential elections, the energy policies of the incoming administration will be closely watched by both domestic stakeholders and the international community. The outcome of the election could have far-reaching implications for Mexico’s energy future, shaping the country’s trajectory towards a more sustainable and resilient energy system. 

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