Energy Cooperatives Swim Against the Tide in Mexico

Onergia, one of the two energy cooperatives operating in Mexico today, installs photovoltaic systems, such as this one at the Tosepan Titataniske Union of Cooperatives in the municipality of Cuetzalan, in the southern state of Puebla. CREDIT: Courtesy of Onergia

Onergia, one of the two energy cooperatives operating in Mexico
today, installs photovoltaic systems, such as this one at the
Tosepan Titataniske Union of Cooperatives in the municipality of
Cuetzalan, in the southern state of Puebla. CREDIT: Courtesy of
Onergia

By Emilio Godoy
MEXICO CITY, Aug 31 2020 (IPS)

A Mexican solar energy cooperative, Onergia, seeks to promote
decent employment, apply technological knowledge and promote
alternatives that are less polluting than fossil fuels, in one of
the alternative initiatives with which Mexico is seeking to move
towards an energy transition.

“We organised ourselves in a cooperative for an energy
transition that will rethink the forms of production, distribution
and consumption to build a healthier and fairer world,” Onergia founding partner and
project director Antonio Castillo told IPS. “In this sector, it
has been more difficult; we have to invest in training and go
against the logic of the market.”

The eight-member cooperative, created in 2017, has so far
installed some 50 photovoltaic systems, mainly in the south-central
state of Puebla.”A public policy is needed that would allow us to
move towards the transition. Getting people to adopt alternatives
depends on public policy. It is fundamental for people to have the
freedom to choose how to consume. It is our job to organise as
consumers.” —
Antonio Castillo

Castillo explained by phone that the cooperative works with
middle- and upper-class households that can finance the cost of the
installation as well as with local communities keen on reducing
their energy bill, offering more services and expanding access to
energy.

In the case of local communities, the provision of solar energy
is part of broader social projects in which the beneficiary
organisations’ savings and loan cooperatives design the financial
structure to carry out the work. A basic household system can cost
more than 2,200 dollars and a larger one, over 22,000.

“The communities are motivated to adopt renewable energy as a
strategy to defend the land against threats from mining or
hydroelectric companies,” said Castillo. “They don’t need to
be large-scale energy generators, because they already have the
local supply covered. The objective is to provide the communities
with alternatives.”

Onergia, a non-profit organisation, promotes distributed or
decentralised generation.

In Mexico, energy cooperatives are a rarity. In fact, there are
only two, due to legal, technical and financial barriers, even
though the laws governing cooperatives recognise their potential
role in energy among other diverse sectors. The other, Cooperativa LF del Centro,
provides services in several states but is not a generator of
electricity.

The Electricity Industry Law, in effect since 2014, allows the
deployment of local projects smaller than one megawatt, but
practically excludes them from the electricity auctions that the
government had been organising since 2016 and that the
administration of leftwing President Andrés Manuel López Obrador
put a stop to after he took office in December 2018.

Since then, López Obrador has opted to fortify the state
monopolies of the Federal Electricity Commission (CFE) and the
Petróleos Mexicanos (Pemex) oil giant, which translates into
favouring fossil fuels over renewable sources.

The National Electric System Development Programme 2018-2032
projects that fossil fuels will represent 67 percent of the energy
mix in 2022; wind energy, 10 percent; hydroelectric, nine percent;
solar, four percent; nuclear, three percent, and geothermal and
bioenergy, four percent.

In 2032, the energy outlook will not vary much, as fossil fuels
will account for 60 percent; wind, nuclear and geothermal energy
will rise to 13, eight and three percent, respectively;
hydroelectric power will drop to eight percent; while solar and
bioenergy will remain the same.

In Mexico, rural communities are guaranteeing their electricity supply by using clean sources, thus furthering the energy transition to micro and mini-scale generation. The photo shows the "Laatzi-Duu" ecotourism site (the name means "standing plain" in the Zapotec indigenous language) which is self-sufficient thanks to a solar panel installed on its roof, in the municipality of San Juan Evangelista Analco in the southern state of Oaxaca. CREDIT: Emilio Godoy/IPS

In Mexico, rural communities are guaranteeing their electricity
supply by using clean sources, thus furthering the energy
transition to micro and mini-scale generation. The photo shows the
“Laatzi-Duu” ecotourism site (the name means “standing
plain” in the Zapotec indigenous language) which is
self-sufficient thanks to a solar panel installed on its roof, in
the municipality of San Juan Evangelista Analco in the southern
state of Oaxaca. CREDIT: Emilio Godoy/IPS

The government cancelled the call for long-term electric
auctions that allowed private companies to build wind and solar
plants and sell the energy to CFE. But these tenders privileged
private Mexican and foreign capital and large-scale generation.

In a dialogue with IPS, independent researcher Carlos Tornel
questioned the predominant energy design promoted by the 2013
reform that opened up the hydrocarbon and electricity markets to
private capital, and the form of energy production based on passive
consumers.

“We don’t have an effective legal framework to promote that
kind of energy transition,” said the expert via WhatsApp from the
northeast English city of Durham. “A free market model was
pursued, which allowed the entry of megaprojects through auctions
and allowed access to those who could offer a very low cost of
generation, which could only be obtained on a large scale.”

With that strategy, he added, “small projects were left out.
And the government did not put in place economic incentives to
foment cooperative schemes.”

“We need a more active model focused on the collective
good,” added Tornel, who is earning a PhD in Human Geography at
Durham University in the UK.

Mexico, the second largest economy in Latin America with a
population of 129 million, depends heavily on hydrocarbons and will
continue to do so in the medium term if it does not accelerate the
energy transition.

In the first quarter of 2019, gross generation totaled 80,225
gigawatt hours (Gwh), up from 78,167 in the same period last year.
Gas-fired combined cycle plants (with two consecutive cycles,
conventional turbine and steam) contributed 40,094, conventional
thermoelectric 9,306, and coal-fired 6,265.

Hydroelectric power plants contributed 5,137 Gwh; wind fields
4,285; nuclear power plants 2,382; and solar stations 1,037.

The Energy Transition Law of 2015 stipulates that clean energy
must meet 30 percent of demand by 2021 and 35 percent by 2024. By
including hydropower and nuclear energy, the country will have no
problem reaching these goals.

Residents of the small rural community of Amatlán, in the municipality of Zoquiapan in the state of Puebla, oversee the operation of photovoltaic panels installed by the Mexican cooperative Onergia. This type of cooperative can help rural communities in Mexico access clean energy, particularly solar power. CREDIT: Courtesy of Onergia

Residents of the small rural community of Amatlán, in the
municipality of Zoquiapan in the state of Puebla, oversee the
operation of photovoltaic panels installed by the Mexican
cooperative Onergia. This type of cooperative can help rural
communities in Mexico access clean energy, particularly solar
power. CREDIT: Courtesy of Onergia

By early August, the government’s Energy Regulatory Commission
(CRE) had granted 310 permits for solar generation, small-scale
production and self-supply, totaling almost 22,000 Mw.

The 2017 report Renewable Energy
Auctions and Participatory Citizen Projects
, produced by the
international non-governmental Renewable Energy Policy Network for
the 21st Century (REN21), cites, with respect to Mexico, the
obligation for investors to form self-sufficient companies, which
complicates attempts to develop local ventures.

Onergia’s Castillo stressed the need for a clear and stable
regulatory framework.

“A public policy is needed that would allow us to move towards
the transition,” he said. “Getting people to adopt alternatives
depends on public policy. It is fundamental for people to have the
freedom to choose how to consume. It is our job to organise as
consumers.”

Affected by the coronavirus pandemic, Onergia is reviewing the
way it works and its financial needs to generate its own power
supply. It also works with the Renewable Energies Institute of the
National Autonomous University of Mexico in the design and
installation of solar power systems.

In March, the government’s National Council for Science and
Technology launched a strategic
national programme on energy transition
that will promote
sustainable rural energy projects and community solar energy, to be
implemented starting in 2021.

In addition, the energy ministry is set to announce the
Special Energy Transition Programme 2019-2024
.

But to protect the CFE, the CRE is blocking approval of the
development of collective distributed generation schemes, which
would allow citizens to sell surplus energy to other consumers, and
the installation of storage systems in solar parks.

Tornel criticised the lack of real promotion of renewable
sources.

“The Mexican government has been inconsistent in its handling
of this issue,” he maintained. “They talk about guaranteeing
energy security through hydrocarbons. There is no plan for an
energy transition based on renewables or on supporting community
projects. We have no indication that they support renewable, and
that’s very worrying.”

The REN21 report recommends reserving a quota for participatory
citizen projects and facilitating access to energy purchase
agreements, which ensures the efficiency of tenders and the
effectiveness of guaranteed tariffs for these undertakings.

In addition, it proposes the establishment of an authority for
citizen projects, capacity building, promotion of community energy
and specific national energy targets for these initiatives.

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Energy Cooperatives Swim Against the Tide in Mexico
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Energy Cooperatives Swim Against the Tide in Mexico