Publication:
Hedging Mexico's Electricity Bets: The Case for Renewable Energy

Loading...
Thumbnail Image
Files in English
English PDF (803.49 KB)
134 downloads
English Text (88 B)
38 downloads
English PDF (238.19 KB)
117 downloads
Date
2007-06-01
ISSN
Published
2007-06-01
Editor(s)
Abstract
Few investors will risk putting all of their money into a single asset based on a 30-year forecast, yet narrowly-interpreted least-cost energy planning has often done just that. In Mexico, regulatory policies have hindered adoption of renewable energy (RE) and other diversified power options that could reduce portfolio risk. Against this backdrop, this note illustrates the country's growing recognition of RE as a viable way to broaden investments in power generation and increase long-term security.
Link to Data Set
Citation
Farchy, Daniel. 2007. Hedging Mexico's Electricity Bets: The Case for Renewable Energy. Knowledge Exchange Series;No. 9. © World Bank. http://hdl.handle.net/10986/23976 License: CC BY 3.0 IGO.
Associated URLs
Associated content
Report Series
Other publications in this report series
Journal
Journal Volume
Journal Issue

Related items

Showing items related by metadata.

  • Publication
    Leveling the Field for Renewables : Mexico's New Policy Framework for Incorporating External Costs of Electricity Generation
    (Washington, DC, 2014-04) World Bank
    Mexico has started a number of efforts to develop adequate policy frameworks in several areas including the energy sector, transportation and industrial policies, and forestry and natural resources management. Its Climate Change Law and the National Strategy on Climate Change envision is changing the upward trend of its carbon dioxide emissions towards a total decline of emission of thirty percent by 2020, and fifty percent by 2050. Achieving these ambitious policy goals is challenging for the country and will require many distinct efforts to mainstream climate change in policy design. Careful economic analysis will be critical to effectively reduce emissions while allowing for sustainable development. The policy evaluated in the study is part of Mexico's policy framework to promote renewable energy. The Ministry of Energy in Mexico, SENER, has issued a Methodology to incorporate external costs of electricity generation. While external costs are not privative of fossil energy, the Mexican government has started this process by focusing on the external costs on health and climate change, two of the main impacts of energy use. The study analyzes the potential of this new policy to help Mexico in its energy and environmental goals. It is organized into five chapters: (i) Introduction; (ii) Mexico s Policy Context for Incorporating Externalities; (iii) Valuation of Externalities; (iv) Internalizing Externalities; and (v) Conclusion. Included are four annexes: Method to Value Externalities for Mexico's Electricity Generation; Investment Plan in the Power Sector in Mexico; Modeling Framework and Methodology; and Project Valuation with Environmental Externalities.
  • Publication
    Country Stakes in Climate Change Negotiations : Two Dimensions of Vulnerability
    (World Bank, Washington, DC, 2007-08) Buys, Piet; Deichmann, Uwe; Meisner, Craig; Ton-That, Thao; Wheeler, David
    Using a comprehensive geo-referenced database of indicators relating to global change and energy, the paper assesses countries' likely attitudes with respect to international treaties that regulate carbon emissions. The authors distinguish between source and impact vulnerability and classify countries according to these dimensions. The findings show clear differences in the factors that determine likely negotiating positions. This analysis and the resulting detailed, country level information help to explain the incentives required to make the establishment of such agreements more likely.
  • Publication
    Mexico : Technical Assistance for Long-term Program of Renewable Energy Development
    (World Bank, Washington, DC, 2006-02) Antonius, Andrés; Awerburch, Shimon; Berger, Martin; Hertzmark, Donald; Huacuz V., Jorge M.; Merino, Gustavo
    The four studies in this technical paper series deal with complementary themes and propose solutions to the same problems that all of them perceive in the Mexican electricity sector - yet each paper looks at the problem from a different angle, and proposes different actions that must be taken in order to bring about a significant increase in Mexico's adoption of on-grid renewable energy. These papers take us from the general overview of the policy and institutional context, down to the specific case of a hypothetical wind farm. They review the current situation, identify concrete policy and institutional changes that are badly needed to stimulate the sector, look at how new paradigms for valuation can help us to better account for the value of renewable energy capacity, and finally perform a thorough economic impact analysis of the hypothetical addition of a large wind farm to Mexico's grid.
  • Publication
    Central American Regional Programmatic Study for the Energy Sector : General Issues and Options - Sector Overview
    (World Bank, 2010-11-01) World Bank
    The six Central American countries of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama share a long tradition of regional integration, including a common market, substantial intraregional trade, as well as coordinated commercial policies, such as the Central American Free Trade Agreement (CAFTA) with the US. The most significant example of regional integration in the energy subsector consists of the Sistema de Interconexion Electrica para America Central (SIEPAC), an interconnection line that is expected to link the six countries in mid-2010. The creation of the interconnection has been a long-term effort, starting in the early 1990s and culminating in 2010. This report provides an overview of the energy sector in Central America, with a focus on the power subsector, and highlights the key challenges and options for meeting future energy and development goals. One of the main objectives of the study is to identify paths for collective action whereby individual countries, and the region as a whole, could benefit from a more integrated approach to developing energy infrastructure and connecting energy markets.
  • Publication
    Drilling Down on Geothermal Potential
    (World Bank, Washington, DC, 2012-03) World Bank
    Economic growth in Central America has increased rapidly over the past 20 years. Currently, the gross domestic product (GDP) per capita for the six Central American countries of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama averages approximately US$3,600. However, economic disparity in the Latin American region is the highest in the world. Despite impressive growth, 20 million people or half of the population in Central America are classified as poor. This assessment of the geothermal potential module is the fourth in the series; it provides an analysis of the energy context in the region focusing on the technology and past experiences of geothermal resources. The study aims to identify the challenges associated with development of geothermal generation, including physical, financial, regulatory and institutional barriers, and it outlines some possible strategies to overcome them at the regional and country-specific level with a view to establish a basis for policy dialogue and to provide decision-makers a reference document with a regional outlook. Energy, particularly electricity, is critical for economic development. It is needed to power machinery that supports income-generating opportunities. Countries that have affordable and reliable energy can more easily attract both foreign and domestic capital. Central America's vulnerability to external shocks in the energy sector has increased over the last years. The region depends on foreign supply of fossil fuels (oil, coal). Since the share of thermal generation in power supply has increased significantly in the last decade, exceeding installed capacity for hydropower, the rise and volatility of oil prices has a dramatic effect today on the region's economy. Together with integration, it has become increasingly clear that the region must develop its local energy endowment, which has generated a strong interest in renewable energy sources and technologies, such as hydropower, geothermal, and wind. Given its potential in the region, geothermal energy has attracted the attention of policymakers and private investors as a resource to further develop and supplement hydroelectric generation (and to reduce dependency on thermal generation).

Users also downloaded

Showing related downloaded files

  • Publication
    Classroom Assessment to Support Foundational Literacy
    (Washington, DC: World Bank, 2025-03-21) Luna-Bazaldua, Diego; Levin, Victoria; Liberman, Julia; Gala, Priyal Mukesh
    This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.
  • Publication
    Services Unbound
    (Washington, DC: World Bank, 2024-12-09) World Bank
    Services are a new force for innovation, trade, and growth in East Asia and Pacific. The dramatic diffusion of digital technologies and partial policy reforms in services--from finance, communication, and transport to retail, health, and education--is transforming these economies. The result is higher productivity and changing jobs in the services sector, as well as in the manufacturing sectors that use these services. A region that has thrived through openness to trade and investment in manufacturing still maintains innovation-inhibiting barriers to entry and competition in key services sectors. 'Services Unbound: Digital Technologies and Policy Reform in East Asia and Pacific' makes the case for deeper domestic reforms and greater international cooperation to unleash a virtuous cycle of increased economic opportunity and enhanced human capacity that would power development in the region.
  • Publication
    Crime and Violence in Central America : A Development Challenge - Main Report
    (World Bank, 2011-01-01) World Bank
    Crime and violence are now a key development issue for Central American countries. In three nations El Salvador, Guatemala, and Honduras crime rates are among the top five in Latin America. This report argues that successful strategies require actions along multiple fronts, combining prevention and criminal justice reform, together with regional approaches in the areas of drug trafficking and firearms. It also argues that interventions should be evidence based, starting with a clear understanding of the risk factors involved and ending with a careful evaluation of how any planned action might affect future options. In addition, the design of national crime reduction plans and the establishment of national cross-sectoral crime commissions are important steps to coordinate the actions of different government branches, ease cross-sectoral collaboration and prioritize resource allocation. Of equal importance is the fact that national plans offer a vehicle for the involvement of civil society organizations, in which much of the expertise in violence prevention and rehabilitation resides. Prevention efforts need to be complemented by effective law enforcement. The required reforms are no longer primarily legislative in nature because all six countries have advanced toward more transparent adversarial criminal procedures. The second-generation reforms should instead help deliver on the promises of previous reforms by: (i) strengthening key institutions and improving the quality and timeliness of the services they provide to citizens; (ii) improving efficiency and effectiveness while respecting due process and human rights; (iii) ensuring accountability and addressing corruption; (iv) increasing inter-agency collaboration; and (v) improving access to justice, especially for poor and disenfranchised groups. Specific interventions reviewed in the report include: information systems and performance indicators as a prerequisite to improve inter-institutional coordination and information sharing mechanisms; an internal overhaul of court administration and case management to create rapid reaction, one-stop shops; the strengthening of entities that provide legal counseling to the poor and to women; and the promotion of alternative dispute-resolution mechanisms and the implementation of community policing programs.
  • Publication
    The Mexican Social Protection System in Health
    (World Bank, Washington DC, 2013-01) Bonilla-Chacín, M.E.; Aguilera, Nelly
    With a population of 113 million and a per-capita Gross Domestic Product, or GDP of US$10,064 (current U.S. dollars), Mexico is one of the largest and highest-income countries in Latin America and the Caribbean (LAC). The country has benefited from sustained economic growth during the last decade, which was temporarily interrupted by the financial and economic crisis. Real GDP is projected to grow 3.8 percent and 3.6 percent in 2012 and 2013, respectively (International Monetary Fund, or IMF 2012). Despite this growth, poverty in the country remains high; with half of the population living below the national poverty line. The country is also highly heterogeneous, with large socioeconomic differences across states and across urban and rural areas. In 2010, while the extreme poverty ratio in the Federal District and the states of Colima and Nuevo Leon was below 3 percent, in Chiapas, Guerrero, and Oaxaca it was 25 percent or higher. These large regional differences are also found in other indicators of well-being, such as years of schooling, housing conditions, and access to social services. This case study assesses key features and achievements of the Social Protection System in Health (Sistema de Proteccion Social en Salud) in Mexico, and particularly of its main pillar, Popular Health Insurance (Seguro Popular, PHI). It analyzes the contribution of this policy to the establishment and implementation of universal health coverage in Mexico. In 2003, with the reform of the General Health Law, the PHI was institutionalized as a subsidized health insurance scheme open to the population not covered by the social security schemes. Today, the PHI covers all of its intended affiliates, about 52 million people
  • Publication
    Guide to the Debt Management Performance Assessment Tool
    (Washington, DC, 2008-02-05) World Bank
    The purpose of this document is to provide guidance and supplemental information to assist with country assessments of debt management performance, using the Debt Management Performance Assessment (DeMPA) tool. The DeMPA is a methodology used for assessing public debt management performance through a comprehensive set of 15 performance indicators spanning the full range of government Debt Management (DeM) functions. It is based on the principles set out in the International Monetary Fund (IMF) and World Bank guidelines for public debt management, initially published in 2001 and updated in 2003. It is modeled after the Public Expenditure and Financial Accountability (PEFA) framework for performance measurement of public financial management. The DeMPA has been designed to be a user-friendly tool to undertake an assessment of the strengths and weaknesses in government DeM practices. This guide provides additional background and supporting information so that a no specialist in the area of debt management may undertake a country assessment effectively. The guide can be used by assessors in preparing for and undertaking an assessment. It is particularly useful for understanding the rationale for the inclusion of the indicators, the scoring methodology, and the list of supporting documents or evidence required, and the questions that could be asked for the assessment.