Enhancing the coherence of climate and energy policies in Mexico (CONECC)

Context

By launching its energy reform process and Energy Transition Law, Mexico has initiated the climate-friendly restructuring of its energy sector. The aim is to increase the share of clean energy in the electricity sector to 35 per cent by 2024. With the reform of the country’s climate legislation in 2018, Mexico has also enshrined its national climate protection goals (Nationally Determined Contributions, NDCs) in law within the framework of the Paris Agreement and its reduction targets for certain sectors of the economy. In the international arena, Mexico has also declared its willingness to reduce its greenhouse gas emissions by 2030 by 22 per cent or, with international support and depending on the progress of international climate negotiations, even by 36 per cent relative to the ‘business as usual’ scenario.

Objective

Key climate and energy policy stakeholders in Mexico are able to initiate or implement political and institutional steps to achieve better cooperation in the areas of energy and climate. This is helping Mexico to achieve its NDCs.

Approach

The project operates within the context of the restructuring of the Mexican energy market. It promotes the climate-friendly development of the energy sector and the harmonisation of the two policy areas of climate and energy. To achieve these aims, the project provides advice to the energy and environment ministries on both specialist and procedural issues.

Strategic measures improve the integration of energy and climate policy at national level. In addition, the project helps ensure that regulatory instruments and economic incentives are developed in climate and energy policy. National data and information systems are also refined to link energy and climate data more closely. The project also supports the creation of better conditions for investments in Mexico that are beneficial in terms of both climate and development. The experience gathered in Mexico is discussed with international experts and findings shared with other countries. The private sector is also involved in order to foster the transfer of climate-friendly technologies.

Results

The project has achieved results in the following areas so far:

• Digitalisation of the energy sector. In cooperation with the Mexican Government, the project has identified the digitalisation of the energy sector as a promising approach for achieving climate protection. In particular, intelligent transmission and distribution grids (‘smart grids’), digital solutions for the integration of supply and demand in markets with a high proportion of variable renewable energy sources (‘smart markets’) and greater energy efficiency are contributing to reducing energy and emissions. The digitalisation approach has been introduced into the political debate.
• Potential for reducing greenhouse gases in the electricity sector. The project has supported Mexico in preparing a report on the potential for reducing greenhouse gas emissions in the electricity sector. Working on the basis of national and international obligations in the area of reduction, the potential for reducing greenhouse gases in the electricity sector for the period from 2018 to 2030 has been calculated in two reduction scenarios based on the expansion of renewable energies.
• Energy efficiency by means of energy quota systems. International experts have exchanged information with Mexican stakeholders with regard to their experience and the most important steps for establishing an energy quota system. As part of this system, energy savings can be verified and traded by means of energy efficiency certificates referred to as ‘white certificates’. A plan for establishing a Mexican energy quota system has been developed based on this exchange.
• Achieving measurability of the negative impacts of electricity generation. Since 2017, the project has been advising a working group of the Mexican Government on developing a suitable instrument for making the negative external effects of electricity generation measurable in financial terms. The aim is for all Mexican electricity generators to document and pay financial compensation in future for the impacts on the economy, health and the environment caused by electricity generation.