News, Insights and Best Practices for Manufacturing in Mexico

How will wind energy impact manufacturing in Mexico?

04 Mar 2014

Category: Politics & Regulations

Recent energy reforms in Mexico have created substantial opportunities for increased foreign investment in the country that will ultimately benefit manufacturers. However, investment in wind power has been in the works over approximately the past 20 years, beginning in the early 1990s and most recently in the activities of Mexican President Enrique Peña Nieto, according to a report published by the independent research firm the Wilson Center.

Green energy a boon for job creation
In fact, since 2006 there has been a 600 percent increase in installed wind power capacity, reaching 1,000 megawatts for the first time in 2012. While Oaxaca, a southern Mexican state, has been the traditional stronghold of wind energy, there have been expansive wind farm projects during the past few years in various locations, including Baja California and Veracruz. As of 2012, national demand for wind power was roughly 40 percent under its potential output, with government research indicating Mexico could prospectively generate nearly 71,000 megawatts for the entire country.

Greater investment in green energy has the potential to improve the economic outlook for Mexico. According to the Wilson Center report, green technology helps generate more jobs per unit of energy created than those positions based on fossil fuel production and distribution. Employment is tied to manufacturing, installing, operating and managing wind farms and related facilities. These jobs not only depend on a highly skilled labor market, but also help create incentives for talented workers to pursue education in engineering and other related fields. At the same time, a diversified energy sector will benefit both domestic and foreign companies looking to manufacture in Mexico. Costs associated with powering production facilities can potentially decrease when there are multiple sources of power, instead of strictly depending on carbon-based sources.

Turning the corner in 2014
According to EQ International magazine, a publication providing insights on global energy concerns, 2014 will signal a turning point for Mexico in terms of wind power generation. This fact is largely due to the fact that legislation passed by the government has established a benchmark that calls for 35 percent of energy produced by the major firms in Mexico to come from clean sources. Currently, the Mexican Wind Energy Association has already aimed to create 12,000 megawatts of wind power by 2022, which would generate roughly US$2.3 billion growth in the Mexican gross domestic product. Recent legislation also provides more flexible pathways for private enterprises to invest in the Mexican energy market, which can help invigorate wind energy initiatives.

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