August 2020, Vol. 247, No. 8

Editor's Notebook

Mexico’s President No Fan of ‘Big Fans’

By Michael Reed, Editor-in-Chief

In what could only be viewed as a significant blow to the wind-power industry in Mexico, that nation’s president, Andrés Manuel López-Obrador, said he would end his support for further projects, including the installation of grid connectors. 

The government maintained the decision was necessary to stabilize the electricity grid amid a huge drop in demand during the Coronavirus outbreak.

In addition to his government no longer issuing permits for wind-power projects, López-Obrador added insult to injury by calling wind turbines “big fans” that create “visual pollution” without producing all that much energy. 

This came as Mexico announced a halt to subsidies for wind and solar intermittent power sources, which have led to increasing costs for electricity – passed on to a citizenry that already faced a recession even before the Coronavirus outbreak. 

The moves were only the latest of several anti-renewable actions taken since López-Obrador took over in 2018. In some ways, the policy shift should have been expected by those who now express disbelief at this perceived about-face on green energy. 

For one thing, much of the pledged supplies of electricity from subsidized wind-power facilities within the Tehuantepec Isthmus ended up being sent by wind companies to places other than the local communities that López-Obrador had promised to help. According to the green-energy-friendly Heinrich Böll Foundation, 5.1% of these communities still did not have electricity in late 2019, and wind companies have widely failed to build the promised new infrastructure in the region, including schools or hospitals.

“Worse still, they have had a negative impact on social cohesion among many nearby indigenous communities,” the foundation wrote. “Since only one part of the population directly benefits from renting their lands to the wind companies, the other is left without any benefit at all. This increasingly results in jealousy and social tension.”

Meanwhile López-Obrador signaled he might be willing to let bygones be bygones when natural gas importation from the United States is at issue. 

In August 2019, the administration reconsidered litigation and the president was at the forefront of settling what could have been a protracted battle involving five pipelines built to import natural gas from Texas to Mexico.

The dispute centered on $3 billion in payments to the companies brought about by force majeure clauses that allowed the compensation based on delays that were beyond the companies’ control.  

In short, López-Obrador determined Mexico, which consumes more than 8 Bcf/d (227 million m3/d) of natural gas while producing only 2.6 Bcf/d (74 million m3/d) itself, needed natural gas more than it needed the funds from the hefty payout. This, even though the pipelines had not transported any gas to Mexico yet.

“It’s going take a long time to be self-sufficient in gas,” López-Obrador said not long ago about efforts to strengthen state oil company Pemex and boost production of oil and gas. “We’re going to be forced to import gas because gas production and extraction were completely neglected [by previous administrations].”

And, it appears renewables will remain out of the picture as long as the current president is calling the shots. According to Reuters, the government, on June 30, ordered that formal complaints be written, alleging fraud on the part of an unspecified number of renewable energy companies.

“We want to talk to the companies one by one,” López-Obrador said at a news conference. “I’ve given the order to begin drawing up formal complaints.”

Apparently, López-Obrador is one socialist who expected more bang for his buck from wind power. And, in retrospect, who can blame him?


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