Mexico is one of the countries that utilize alternative or renewable energies aside from its major power generating plants such as thermal and coal fired power plants. Renewable energy represents the production of electrical energy with the resources being provided by nature on a sustainable basis. Utilization of this renewable energy gives an alternative solution to the prevailing demand for energy. It also lessens or eliminates the emission of harmful threats to the environment cause by the usage of the typical sources of energy such fossil fuels in the form of carbon, oil, or gas.
The environmental effects are long term in nature and irreversible in process such as the increasing hole in the ozone, global warming and contamination of the atmosphere, the greenhouse effect, and nuclear waste. Alternative or renewable energies may be in the form of a hydropower plant that uses the kinetic energy of water to be able to generate power; a solar panel utilizing photovoltaic cell to harness the energy rays coming from the sun; a windmill that uses wind power to produce energy; and geothermal energy that utilizes steam coming from the earth’s core.
Adapting to the usage of renewable energy not only has a positive effect on Mexico’s environment but also in its economy. An evaluation of renewable power sources will provide significant help in producing additional power in Mexico. Mexico utilizes alternative sources of energy in the form of hydropower which comprise 22% of the total rated capacity, 2% to geothermal plants, 3% to nuclear plants, only a small fraction of percent goes to wind power and large percentage accounts to thermal plants of CFE and others from independent power producers.
CFE refers to the “Comision Federal de Electricidad” or the Federal Electricity Commission, and it represents the sole state owned electric company. CFE is responsible for the construction of generating plants to meet the demands for domestic lighting, irrigation, dragging and milling; increasing the rated capacity of power needed; unified economical and technical criteria by standardizing the operating voltage and frequency with the purpose of standardizing equipment thereby reducing manufacturing time as well as cost, inventory and storage.
At present there are two governing bodies in Mexico’s electrical public system, the Central Light and Power Company and the Federal Electricity Commission or CFE. The two bodies govern agreements on transmission and interconnection services being granted to renewable power sources. Regulatory schemes are being implemented to balance the competitive condition of power production thus enabling competition under similar conditions.
The Energy Regulatory Commission or the CRE has the sole responsibility regarding the economic and technical regulation of the electricity sector. The objective is to protect consumer’s interest either short or in long terms. Factors to consider in economic regulations include costs, prices, quality of service and investment. CRE is also responsible in concessions and permits, settling disputes, and promoting competitions among participants.
Mexico’s energy sector played a key role regarding the economic growth of the country such as the relative increase in the Gross domestic product or GDP, certain percentages coming from the energy exports, total public revenues, and investments in the energy sector greatly contributed to the economic growth of the country. The figure below shows the structure of the Mexican Energy Sector.