Good Morning. It is a great privilege and pleasure to be here with you today at the Fourth Annual MIREC (Mexico International Renewable Energy Congress). I would like to welcome my colleagues from the Mexican Government, particularly Leonardo Beltrán, Deputy Secretary for Energy Planning and Transition. And this morning speakers, his excellency Viktor Elbling, Germany Ambassador to Mexico, Mr. Nadim Chaudhry, Green Power Conferences CEO, and Dr. Alberto Valdes, President of the National Solar Power Association ANES. I would also like to thank all of the U.S. company participants who are here to learn about the needs of the Mexican market and to collaborate with you on solutions.
I hope this conference significantly advances the dialogue on issues affecting the renewable energy industry in Mexico so that together we may continue to foster a green economy for truly sustainable development and growth.
Our two countries share plentiful geothermal, wind, and solar resources to reduce greenhouse gas emissions and to foster sustainable, “green” economic growth and productivity through innovation.
According to a recent Wilson Center report, Mexico has reached 25% of installed capacity from renewable sources, mainly from hydro with some geothermal and wind energy. Renewable power generation generally does not produce energy at its installed capacity because of variations in the environment, such as insufficient rain and water levels in the case of hydroelectricity, but this is just part of the story. We are seeing real growth in wind energy in Mexico and the potential for wind, solar and geothermal are significant. We need to continue working together, take the necessary steps to promote new renewable energy sources, and support Mexico’s goal of achieving 35% clean energy generation by 2024.
I think those of us here today can agree that climate change is one of the greatest challenges of our generation. The year 2014 was the hottest year on record globally. Climate and weather disasters are increasingly costly to the global economy. In 2012 alone, weather disasters cost the U.S. economy over $100 billion. And there are serious public health threats associated with extreme weather. Climate scientists say we need to avert a two degree temperature increase to avoid the most catastrophic impacts of climate change.
President Obama has made the promotion of low-carbon growth a priority for the U.S. Government – and he has taken a series of bold steps to combat climate change. This past November, for example, he laid out an ambitious but achievable target to reduce greenhouse gas emissions in the United States in the range of 26 to 28 percent below 2005 levels by 2025. Through his Global Climate Change Initiative, the U.S. Government is working with our partners around the world to address the challenge of climate change.
In Mexico, USAID’s Global Climate Change Program is supporting the Government of Mexico and private sector efforts to move towards a “low carbon” economic growth pathway. Achieving these objectives will result in a more stable and prosperous future for Mexico, as well as your neighbor, the United States.
The Government of Mexico has also shown truly great leadership on the issue of climate change. Just a few weeks ago, Mexico became the first major emerging economy to submit its pledge to the United Nations climate body to reduce greenhouse gas pollutants post-2020. In doing so, Mexico set an example for the rest of the world by submitting its pledge (known as an Intended Nationally Determined Contribution) that is timely, clear, ambitious, and achievable. In particular, Mexico’s target to peak its emissions by 2026 and drive them down thereafter is a landmark step in the global transition to a low-carbon economy. We should also recognize that Mexico’s General Law on Climate Change is a significant milestone in the development of a comprehensive framework for addressing climate change.
These climate commitments by Mexico, the United States, and other countries will help pave the way for a new climate agreement in Paris later this year.
These efforts are fundamental to our governments’ broader efforts to collaborate more effectively on trade and investment in order to make North America the most competitive economic region in the world. A key element of our shared prosperity is our joint focus on robust clean energy and technology.
The United States is Mexico’s largest trading partner and its largest export market in the world. Two-way trade between the U.S. and Mexico now stands at well over half-a-trillion dollars annually. This means that, each day, over $1.5 billion in trade crisscrosses our border. At the same time, business investment in both directions has grown dramatically. The cumulative stock of U.S. foreign direct investment in Mexico is over $101 billion.
All that said, the continuously increasing trade and investment between our countries wouldn’t be possible without the involvement of the energy sector. Energy reforms in Mexico are changing the power generation and distribution markets to make them more competitive and open to private investment. In addition, government targets for clean energy and plans for clean energy certificates should help promote renewables in the long term.
Wind energy will continue to be the dominant player in Mexico’s renewable energy market for the foreseeable future attracting over $1 billion alone last year, nearly half of total Mexico’s clean energy investment.
Mexico’s solar industry remains in its infancy with the expectation that the industry will emerge over the next six years, primarily through distributed photovoltaics. In fact, falling solar prices and high capacity factors rate Mexico among the top five markets in the world and solar could become the energy source of choice.
2014 was also a notable year for the geothermal industry in Mexico, as new regulations were signed by President Peña Nieto. A framework is now in place to facilitate the issuance of permits for site study, as well as concessions for exploration and development of geothermal resources. In addition, SENER recently announced that it has partnered with the Inter-American Development Bank to provide risk mitigation and financing to private geothermal energy projects.
Closer to home here in Mexico City, we acknowledge the recent news that came as a result of the first meeting of the C40 Cities Climate Leadership Group, where Mexico City officials signed a declaration of intent on clean buses and committed to convert two-thirds of the Mexico City bus fleet from diesel by 2020. This measure will have an important effect in the reduction of greenhouse gas emissions in Mexico’s capital.
In closing, let me quote President Obama, who said that, “Building a robust clean energy and technology sector is how the jobs of the future will be created.” Thank you for the opportunity to share with you about what our governments are accomplishing together. And, above all, thank you for your critical role in creating a shared sustainable future for our shared North America region.