Wind energy development in Mexico: an authoritarian populist development project?

17 March 2018

What are the current context and consequences of Mexico's wind energy policy in the rural setting of the Isthmus of Tehuantepec?

Narratives favouring climate change mitigation and a transition towards ‘green’ energies are reconfiguring rural areas in the Global South using a double ‘win-win’ discourse: creating a global good while bringing new investments, jobs, growth and development to socially deprived regions. Renewable energies are assumed to represent a path away from the hard choices based on fossil fuels, towards a soft and sustainable path that would be flexible, resilient, benign and fraught with opportunities for development.

For the Mexican government wind energy expansion brings different sorts of opportunities to the country: to reduce carbon emissions without compromising economic growth, to contribute to climate change mitigation, to develop local capabilities, to foster technological development, amongst others. It is in this context that Mexico has passed one the most ambitious frameworks with regards to Renewable Energies development in the world. The Law for the Utilisation of Renewable Energies approved in 2008, on the one hand, establishes that in every renewable energy project that is above 2.5 MW should seek local participation and should foster social development in the region. The General Law of Climate Change passed in 2012, on the other hand, set up the goal for the year of 2024 to produce at least 35 percent of the total electricity by clean energy sources including sources such as nuclear, coal and gas with Carbon Capture Storage Schemes.

It is important to mention, however, that these narratives seeking to come up with popular appeals to the interests of the poor and the vulnerable populations through a transition towards green energies seem to advance the interests of foreign and domestic capitals adding to the heterogeneity and complexity behind authoritarian populism. This tension has to be analysed in relation to the energy reform approved in 2013. Until this date, electricity was classified as a service to be provided by the state and allowing private generation under specific schemes – self-generation, cogeneration and independent producer – to be sold to the state-owned enterprise. The majority of wind energy projects, under this framework, are large investments, funded by international organisations, acting as self-generation societies –schemes where private actors and public-private partners set up an agreement for generation and commercialisation of electricity amongst partners, paying only a fee to the state-owned utility for the transmission of energy.

The energy reform approved in 2013 under Peña Nieto’s office modifies this framework by establishing that only transmission and distribution of energy are public services to be provided by the State. That is to say that the electricity system is transformed, from a completely state-owned utility, into a free and non-discriminatory market where private entities can now participate in electrical generation spaces. One of the novelties behind this new framework is that within secondary laws, notably the Law for the Electric Industry, it is now required to do a Social Impact Assessment for electricity projects, as well as an indigenous consultation within international standards – ILO 169 Indigenous and Tribal Peopl es Convention.

Both the scheme before and after the reform has promoted an expansion of wind energy projects on a massive scale in Mexico, especially in the Isthmus, since 1994 - when the first wind park in Latin America was built. Nowadays, the outlook is so positive that investments in wind energy are expected to attract between 13 to 15 billion dollars in the period between 2016 and 2018. Also, it is expected that energy capacity generation will double up by 2022 and in some places of the country like Yucatán, for instance, wind ene rgy is expected to reach Oaxaca’s capacity – process that took more than 2 decades – in less than 2 years. There are, likewise, further incentives for private actors to invest in renewable energy development in the country, which positions Mexico as the 6th most attractive economy for investments in renewable energies.

Wind energy development is presented as a solution to energy and climate crisis that can benefit poor people and socially deprived regions by creating employment opportunities and bolstering social and economic development. It is important, however, to pay attention to the asymmetric ways in which the benefits of climate change and renewable energies development are being distributed in Mexico. All of the wind energy projects implemented before the energy reform, for instance, did not carry a prior consultation process according to international standards. The permits were just granted at the federal level and the enterprises were just in charge of implementing the project. This generated two phenomena in the region. On the one hand, the idea that “social responsibility” was more related to agreements between partners than to an actual obligation imposed by the state behind wind energy development. As one of the author's informants argues: “in the case of Eurus wind park Mexican Cement, our partner, obliged us to have a formal social area focused in the development of this project.” On the other hand, it started articulating opposition on the basis that these projects were alien to the region and imposed upon indigenous communities against their will.

Mexico, in consequence, faces an inherent tension with regards to wind energy: while wind energy and its growth in emergent markets will play out a salient role in de-carbonisation and development efforts, its prospects and pathways will be made and reshaped by the local politics of contestation. This paper seeks to understand the current context and the consequences resulting from wind energy in the rural setting in the Isthmus of Tehuantepec. The argument is that the new investments, jobs and growth that supposedly would result from wind energy development authoritarian populist project easily appealed stakeholders in the Isthmus. Yet, the capture of land, wind and livelihoods has provoked asymmetries and social conflicts that result in new exclusions and dispossessions for some people. This paper explores the consequences in the Mexican rural setting of three different analytical moments in wind energy development: the siting of a project, the expansion of projects in less than 5 years and the long-term projects that have been in the region for over a decade. At the same time, it seeks to explore how the top-down rationale behind these projects has actually generated opening for resistance that seem to be exacerbated by the recent earthquakes that struck the region last year and by the recent declaration of the Isthmus as a Special Economic Zone in 2018.