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«NATIONAL RENEWABLE ENERGY LABORATORY RENEWABLE ENERGY OPPORTUNITY ASSESSMENT FOR USAID MEXICO November 2015 Andrea Watson, Ricardo Bracho, Rachel ...»

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70 From conversations with Ms. Sandra Liliana, GIZ 34 USAID is currently supporting RUTAS, a vocational training program, which has completed an Energy Sector Labor Market Assessment, Curriculum Assessment, and Bi-national Collaboration (Appendix V).

2.1.6 Red de Mujeres en Energía (Women in Energy Network) 2.1.6.1 Context and Barriers Gender disparities exist in the energy sector in countries across the globe. The obstacles that women face to secure energy sector jobs vary. For women in impoverished rural areas, barriers to inclusion in the energy landscape are in part a result of energy investments that are made without a gender-informed process. In most cases, investments are not designed to factor in gender sensitivities, which according to the African Development Bank Group, harms women and girls the most, because they are often marginalized socially and economically in areas where energy access is limited. 71 In Latin America, women face institutional barriers and hurdles in access to training, financing and markets that lead to exclusion from the energy sector and its benefits and vulnerability to factors like the market and prices. 72 In Mexico, as in other countries, a prominent perspective is that enduring and outdated cultural beliefs keep women from breaking through barriers to higher job growth. In a recent McKinsey survey of Latin American executives, 78% say their country’s culture makes it easier for men than for women to move forward in their careers. 73 Mexico’s energy reform did not specifically indicate gender as an area in which change would be made, and it assumed that women in Mexico may continue to face unique institutional barriers and hurdles in access to training and advancement in the near future.

2.1.6.2 Program Theme In an effort to decrease the gender gap in energy, a Red de Mujeres en Energía (Women in Energy Network) could be created. The objective would be to create an environment where women can collaborate on bringing women into the energy industry.

The group would give women a voice within a technical, male-dominated industry.

Events or regular meetings as well as mentorship programs could be elements of this program.

If a priority for the Government of Mexico, USAID could act as a facilitator for these events, providing the invitation to participate to key players, from both the private and government sector. In particular, current leaders would be encouraged to mentor the next generation of energy leaders within their work environment. USAID could work to find local partners (government or private sector entities) that would co-sponsor such events.

71 http://www.afdb.org/en/news-and-events/article/process-of-developing-an-ecowas-policy-on-women-and-energykicks-off-13996/ 72 http://www.ipsnews.net/2013/03/women-entrepreneurs-face-greater-barriers-in-mexico/ 73 http://fortune.com/2014/11/11/in-latin-america-why-women-face-an-iron-ceiling/ 35 Another potential gender focused activity is targeted support on workforce development with CFE to achieve a more customer-focused business model through improvements in billing and customer service. To support USAID’s commitment for achieving greater gender equality in energy and infrastructure, this intervention would aim to increase the professional participation by women in a rapidly changing niche in the energy sector.

Customer-CFE relationships can be optimized through efforts to deepen segmentation, behavioral demand response and the offering of new customized customer options.

Through training opportunities targeted at women professionals, CFE has the potential to improve gender outcomes while streamlining operations through advanced customer information systems (CIS) 74.

2.1.6.3 Other Stakeholder Activity GIZ has the mandate to include gender topics in all of its projects. In particular, they are promoting educating women in low-income weatherization and energy retrofits.

The National Institute for Women (Inmujeres) has been running the Gender Equity Model (GEM) Initiative since 2003. 75 The initiative certified some 300 Mexican organizations or companies as “gender equitable” since 2010. A collaboration opportunity could be sought out between Red de Mujeres en Energía and Inmujeres.

2.2 GHG Emissions and Renewable Energy in Mexico Mexico became the first developing nation to release their climate plan the 2015 United Nations Conference of the Parties (COP21) in Paris. According to Mexico’s INDC, “…if Mexico achieves its goal [35% clean energy by 2035], its 2030 emissions will be 759 megatonnes (Mt) of GHG without international support, or 623 Mt with support.” 76 The country’s INDC commits them to reduce GHG emissions by 22 percent (experiencing peak emissions in 2026), and black carbon by 51% before 2030. With international support, reduction is expected to be greater (Figure 3). 77

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74 This idea of improving CFE-customer relations was provided by an anonymous USAID reviewer.

75 “Renewable Energy and Jobs.” 2013. IRENA.http://www.irena.org/rejobs.pdf.

76 “What Is an INDC?” n.d. World Resources Institute.http://www.wri.org/indc-definition.

77 “Mexico: Intended Nationally Determined Contribution.” n.d. SEMARNAT.

36 About 67% of CO2eq comes from the energy sector. This number includes transportation related emissions, which makes up a little more than half of those emissions, followed by the electricity sector. 78 Figure 4 is from Mexico’s Fifth National Communication and illustrates greenhouse gas emissions by sector.





Figure 4: GHG emissions by category, from Mexico's Fifth National Communication GHG Reduction Potential of Proposed Activities USAID support could be pivotal in ensuring that Mexico meets its conditional INDC goals. While much of the policy is in place to reach the unconditional goals of the INDC, political will, implementation efficiency, and donor support will likely be crucial to success of meeting the country’s conditional goals. The activities included in this RE Assessment Report describe opportunities for USAID to help Mexico contribute to their INDC GHG emission reductions goals through work in the renewable energy sector.

The activities proposed in this document enable renewable energy development in Mexico. We cannot, however, predict how many megawatts of renewable energy (and in turn tons of GHG reduction) will result from these activities. Capacity building at the grid operation and planning professional level could be seen as directly tied to Mexico’s ability to maximize integration of variable renewable energy and hence have an impact on emissions reductions.

78 Comisión Intersecretarial de Cambio Climático, “Mexico: Quinta Comunicación Nacional Ante La Convención Marco de Las Naciones Unidas Sobre El Cambio Climático” (SEMARNAT, 2012).

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Appendices Appendix I: TDY Leave Behind Próxima Fase: USAID México, Programa de Cambio Climático Mayo, 2015 Junto con el Gobierno de México, USAID México ha trabajado desde hace varios años para mitigar el cambio climático a través de varios programas. Ahora, USAID quiere empezar el proceso de diseñar su próximo programa de cambio climático en México, considerando las políticas relevantes, la reforma energética, y el desarrollo económico del país. Este nuevo programa tendrá una inversión de alrededor de cinco millones de dólares anualmente. A fin de informar este proceso, USAID realizará un análisis enfocado en los temas de energía renovable y eficiencia energética.

Para llevar a cabo este análisis, USAID ha reunido a un equipo de expertos pertenecientes al Laboratorio Nacional de Energía Renovable (NREL) y a la consultoría Abt Associates. El objetivo del análisis es trabajar con el Gobierno de México y otros expertos mexicanos para identificar las estrategias de mayor impacto para la reducción de gases de efecto invernadero.

Los equipos de NREL y Abt Associates efectuarán dos viajes a México con el objetivo de reunirse con los actores más relevantes del sector energético en México. En este primer viaje (11 a 20 de mayo, 2015), el equipo de NREL estará enfocado en el análisis de oportunidades en el sector de energía renovable. Durante el mes de junio, un segundo viaje, integrado por funcionarios de USAID y representantes de Abt Associates se enfocará en eficiencia energética.

Miembros del equipo que realizarán labores de análisis en persona en Mayo:

Donald McCubbin – Asesor de Medio Ambiente, USAID México • (52) 55-4447-9295, dmccubbin@usaid.gov Kristen Madler – Coordinadora de Energía Limpia, USAID Washington • +1 (202) 712-4295, kmadler@usaid.gov Ricardo Bracho – Sr. Program Manager, NREL • +1 (303) 514-9512, Ricardo.Bracho@nrel.gov Andrea Watson – Manager, NREL • +1 (303) 275-4234, andrea.watson@nrel.gov Rachel Romero – Ingeniera, NREL • +1 (303) 886-8254, rachel.romero@nrel.gov Santiago Enriquez – Especialista en Cambio Climático, Abt Associates México • (52) 55-5254-2222, Santiago_Enriquez@abtmexico.net El equipo les agradece de antemano su atención y participación.

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41 Appendix III: Renewable Energy Building Blocks 79 Building Blocks for Scaling Up Renewable Energy Available evidence clearly indicates that the countries that are really scaling up meaning deploying thousands of MW of CE - are using five complementary building

blocks:

A. Competition for generation opportunities, often reverse auctions. This drives down prices over time, causing CE to approach parity with thermal generation. Low prices prove attractive to utilities and policy makers, causing more demand for scaling up RE. At some point, CE can even be cheaper than other least cost alternatives, in which case the rationale for more CE becomes even stronger. This isn't theoretical; it's actually what is happening in the west of the US, in India, Germany and the UK.

B. Smart incentives. This means that a country is constantly evolving their incentive regimes for CE, with changes being made to incentive regimes every year or two.

Bloomberg New Energy Finance (BNEF) is full of articles on the new incentive regimes in places like China, India, South Africa, Brazil, Mexico, etc. The reason this is important is because countries learn from experience, and the approach to CE evolves as experience is gained. This suggests that support for development and deployment of incentive schemes is advisable.

C. Grid integration. Countries that are really scaling up have realized that they must work on grid integration at the same time as they are scaling up. As they hit capacity levels equal to 8% to 10% of total generation capacity, they need to start spending nearly as much on grid integration as on generation capacity. This also has an impact on the prices of CE and on "bankability" of projects. For example, for a period of about 6 years, China curtailed as much as 20% of their wind capacity because of grid faults due to ramping and lack of evacuation capacity. Curtailment increases the cost of electricity (or lowers returns to investors).

D. Locational concentration. It is important to take locational mapping of RE resources one step further - to planning and executing RE zones. One of the best examples is the Competitive Renewable Energy Zones (CREZ) in Texas. This drives two positive outcomes: (1) it reduces CE prices due to higher capacity factors 80, and (2) it reduces the costs of common infrastructure per unit by concentrating capacity in limited areas.

E. Financing support. Many countries have created special financing facilities, banks and mechanism to scale up RE. Examples include taxes on fossil fuels used to pay production credits and FITs, and specialized windows in public infrastructure banks, among others. In many countries the financing support is needed to overcome the risks that lenders and investors see with new technologies and business models.

79 Building Blocks document provided by USAID GCC office. References within document were not provided when USAID issued the document.

80 Areas with better solar or wind resources result in a higher percentage of operation of RE plants. This is called “capacity factor”, and is basically the percentage of time that a unit is actually generating electricity.

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F. Climate planning: USAID has not issued guidance on this building block as of the writing of this report.

43 Appendix IV: Grid Integration Check List for Mexico 81 Mexico-specific Checklist of Recommendations: Input Data

Recommendations for Mexico on input data for grid integration studies include:

Leverage existing and forthcoming solar radiation time series data for Mexico to • estimate sub-hourly solar power variations for desired locations and deployment scenarios. Invest early in the development of a large-scale mesoscale weather model to predict wind speeds across Mexico’s geography. Calibrate this model using data from entities such as IIE, SENER, international wind developers, public and private weather modelers, and public data measurement methods.

o As an alternative to developing a mesoscale wind model specifically for GOM, explore developing an agreement between SENER and Vestas that would allow the use of Vestas’s proprietary mesoscale model results in SENER’s broad-scale integration studies. This route could potentially save significant time and money and thereby significantly shorten the grid integration analysis time window.

Participate in the UVIG annual forecasting workshop and similar venues to gain • insight into the evolution of wind and solar forecast methodologies. Consider expanding Mexico’s representation in IEA Wind to include participation in Task 25 by appropriate representatives from SENER, CENACE, CFE, and IIE. While beyond the scope of this roadmap, IIE and other Mexico stakeholder concerns regarding distribution system impacts of rooftop and other customer sited PV systems have been examined and addressed in the IEA Photovoltaic Power Systems Programme (PVPS) Task 14 on High Penetration of PV Systems in Electric Grids. Mexico is part of the PVPS, but expanding active participation into Task 14 activities is recommended.



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