Mexican companies are shifting to renewable energy

Mexico's position allows the country to have one of the lowest prices for renewable energy.

Companies in Mexico are investing in renewable energy to reduce Co2s emissions.

Meanwhile, the Mexican government is betting on hydrocarbons for energy generation, companies are shifting to renewable sources for reducing COs emissions and saving the cost to pay with electricity.

Mexico’s position allows the country to have one of the lowest prices for renewable energy, according to a working paper of the Wilson Center

Mexican companies are embracing renewable energy

For that reason, companies in Mexico have undertaken a strategy of migrating to fossil fuels as an energy source, towards cleaner alternatives in their operations. Forbes Mexico informed that the energy shift is intending to reduce the carbon footprint of their operation, but also reducing the cost to pay with electricity, reaching levels of more than 80%.

According to the Business Coordinating Council (CCE), the electricity generated by the private sector is 26% cheaper than that produced by the plants of the Federal Electricity Commission (CFE), a percentage that represents around 60,000 million pesos annually.

“The implicit cost of this 26% more expensive, which will translate, as shown in all the studies we present, in addition to 60,000 million pesos per year, which will have to be financed in some way. Either it is financed because electricity to economic agents will be more expensive, or it will be financed because the Ministry of Finance will have to subsidize these 60,000 million pesos annually, “he said last March at the” Electricity for the future of Mexico “forum, his president, Carlos Salazar Lomelín.

Which Mexican companies are shifting to renewable energy?

América Móvil (AMX), one of the main companies in the Mexican Stock Exchange (BMV) and owned by Carlos Slim, had a plan for 2020 that 50% of the energy would come from clean sources, a goal that was close to achieving in 2019, registering progress of 94%, according to the sustainability report of that year.

During 2019, AMX’s energy consumption in the operations of the different countries where it has a presence was 6.2 million megawatts/hour (MWh), of which 2.3 million were from Mexico.

Walmart in Mexico and Central America has taken a similar approach. Currently, 63% of total energy consumption comes from sustainable sources. However, the company has the objective of reaching 100% by 2035, as indicated in its “Financial and ASG 2020, A year of stories ”.

In the document, the self-service store chain highlights that, as part of its strategy, last year 13 million tons of CO2 were avoided, due to the participation of 188 suppliers through the Gigatón Project in Mexico.

Walmart invested 449 million pesos in Mexico and 100 million pesos in Central America to continue the transition towards LED lighting and photovoltaic cells,

The Mexican Fomento Economico (FEMSA), owner of Oxxo, the biggest chain of grocer stores in the country, in 2019 expanded the use of clean energy in its manufacturing plants in Mexico, reaching its original goal for 2020 of 85%, according to a report from the firm.

The company recently announced that 70.1% of Oxxo stores in Mexico are supplied by renewable sources, since through contracts with 5 wind farms in the country “we satisfy 69.4% of our electricity needs.”

Grupo México, owned by German Larrea, has also embarked on a path towards renewable energy in its operations since the consumption of electricity from these alternatives in 2019 was 1,413 GWh, representing 18.6% of total consumption.

This energy came mostly from hydroelectric plants that supply the mining operations in Peru, and in that year it made it possible to avoid the emission of 305,270 tons of CO2, as well as the El Retiro wind farm with 74 MW capacity, developed and operated by the Infrastructure Division in southern Mexico.

Grupo México assured that the company will continue to increase the use of renewable electricity in its operating processes.

Bimbo is another of the companies that have undertaken a strategy of migrating from fossil fuels to cleaner alternatives. 80% of the energy consumed by the bakery worldwide is renewable.

Only in its operations in the Mexican Republic, 80% of the electricity used by Bimbo is renewable; where the Piedra Larga Wind Farm, in Oaxaca, supplies 70%, avoiding the emission of 180,000 tons of CO2 per year, in addition to having solar roofs in some of its distribution centers, including in its corporate offices.

Last February, the president of the bakery, Daniel Servitje, highlighted in a conference with analysts that last year they increased their global use of renewable electricity, going from 49% to 80%, meeting our 2020 objective and advancing in their commitment to achieving a 95% by 2023.

In 2021 Grupo Bimbo foresees investments in capital goods (Capex) this year around 1,000 million dollars in plants, technology, electric vehicles, and renewable energies, including some purchase of another company,

“We hope to increase our investments in electric vehicles. And in some cases, we also invest in renewable energy on our rooftops and in some other areas, but most of the investments go basically to the plant, the bakeries, and the increase in development capacity ”, said Servitje.

At the difference of other places in the world, Mexican companies have more compromised in the transition than the government.