Global investment in energy will grow almost 10% in 2021, to 1.9 trillion dollars, with a special emphasis on renewable technologies, where 70% of investments will be concentrated, and will reverse last year’s fall caused by the pandemic, according to a new report from the International Energy Agency (EIA).
The expected increase in investment this year is a mix of a cyclical response to the recovery and a structural shift in capital flows towards cleaner technologies, the organization says. But this scenario does not seem to be replicating in Mexico, where current policies do not point to a recovery in the sector or new investment plans.
Many governments have decided to increase their bet on renewables for two main reasons: the global fight against climate change and the benefit in the number of jobs that this market niche represents.
A study by the National Association of State Energy Officials of the United States (NASEO, for its acronym in English) indicates that the energy sector, mainly the one focused on renewables, is the one that represents the most jobs for the economies. In the United States, the energy industry has added almost one million jobs during the last five years, twice as many jobs as were created in the rest of the productive sectors.
“While many energy companies remain in a fragile financial state, there are signs that developers are using the window provided by accommodative monetary policy and government backing to plan infrastructure developments and investments in new projects,” the organization says.
So several countries have already launched strong investment packages focused on renewable energy as the engine of an economic recovery and the creation of new jobs. Spain has announced that it will allocate close to 3,000 million euros in renewable energy projects in the next four years and India has committed more public money in the sector than any other government, with an injection close to 122,000 million dollars since the beginning of 2020. with a focus on the recovery of its post-pandemic economy.
Mexico has not launched any economic recovery plan that takes the sector into account and the uncertainty generated by regulatory changes – as part of the efforts to return Pemex and CFE to the leading role in the market – have generated a scenario of uncertainty that has not subscribed to new projects, neither public nor private.
“The uncertainty in an industry that is intensive in capital, such as energy, where what they invest is iron that remains and you cannot take them and it takes you 20 or 30 years to recover the investment, it slows down the investment and in this Noise has also slowed down public investment, because you have the legal framework under debate. And that situation is very complicated with a capital-intensive segment, with too much infrastructure and long investment recovery periods, ”says Severo López Mestre, an analyst in the sector.
The IEA ensures that investments in renewable energy will be directed to markets with low interest rates, low installation costs, regulatory frameworks that guarantee the recovery of investment and a fiscal policy in support of this type of project.
But in the case of Mexico, the administration has ended the mechanisms to increase private generation in the country, the pace of new electricity generation permits in the Energy Regulatory Commission (CRE) has slowed down, and at the beginning of the government they canceled power auctions, the main tool for private investment in new power plants.
Currently, the renewable sector generates around 29,500 jobs, according to information from the Mexican Wind Energy Association and the Mexican Solar Energy Association. Both organizations have already ensured that the continuous changes in the regulatory framework of the sector have put the number of places under pressure.
