Andres Manuel Lopez Obrador, Mexico’s President, said on Friday that after several months of friction with business leaders, the country has made commitment with 17 American companies on clean energy generation.
According to the terms of the agreement, Mexico is likely to establish 1,854-megawatt solar parks on the border between the country and the United States as the government seeks to combat climate change.
Building energy transmission networks to allow power to be transferred to California and other US states would be among the priorities, Obrador said at a climate conference.
The United States, one of the main investors in Mexico’s energy sector, is concerned about Lopez Obrador’s ambition to increase state control over the electricity industry. The US, together with Spain, Canada, Italy, and Japan, account for 93% of foreign investment in power, according to Economy Ministry figures.
Foreign and private engagement is restricted to the electricity generation phase under current regulation, with the transmission and distribution operations monopolized by the state.
The leftist government failed last April in its attempt to rewrite the Constitution to reestablish state control of the whole production chain, but it did secure amendments in regulatory legislation that expand its involvement in generation.
In addition to the announcement, Obrador also stated that the state-owned business Petroleos Mexicanos (Pemex) will invest US$2 billion in its own resources and credits to cut methane gas emissions in oil exploration and production operations by up to 98%.
Mexico is home to some of the largest automobile manufacturing plants in the world, including those of Volkswagen, Nissan, General Motors, BMW, and Kia, among others, with production destined for more than 80% of the US market.
On the Major Economies Forum last Friday, US President Joe Biden invited other countries to join his goal of having electric vehicles be more than 50% of the vehicles sold by 2030. Mexico was among the countries that joined the initiative, added Obrador.