Hidalgo state to push forward with energy transition

Claudia De La Rosa

06-Jul-2022

HOUSTON (ICIS)–Daniel Hernandez, director of the Hidalgo state energy agency (AEEH), said its energy transition plan is flexible enough to continue having influence despite the upcoming September state government change.

Hidalgo elected a new government in early June, but Hernandez said in an interview with ICIS that the momentum they have created to advance the energy transition dialogue and action will not die out easily.

The energy transition plan released in early June is more of a reference for best practices than a strict manual to follow, Hernandez said.

“It is a guide but it is not written in stone.”

Hernandez said the flexibility of the document will make it easier for the incoming Hidalgo state administration, set to start in early September, to use it.

POTENTIAL MARKET IMPACT

Hernandez said advancements in some of the indicators outlined in the plan would have the most important impact on the local energy market in coming years.

He highlighted that nearly 4% of Hidalgo’s energy still comes from wood, something that studies have shown presents numerous risks to vulnerable populations.

Almost 94% of energy consumed in the state comes from fossil fuels, according to the plan, with renewables accounting for 2%.

Renewables potential in Hidalgo includes solar, wind and geothermal among others.

Hernandez said that solar energy has the greatest potential in the state and that two solar projects with installed capacity of nearly 104MW have entered operation during the current state administration’s term.

Hidalgo’s three competitive advantages in solar are its proximity to the high-demand Mexico City and Valle de Mexico area, robust electricity transmission infrastructure and certain geographic characteristics that improve its ability to capture solar energy.

The infrastructure and specific details are explained in the transition planning document.

The state also has geothermal and wind potential.

Studies remain to be done, however, to confirm if and how much of Hidalgo’s geothermal energy could be used, according to Hernandez, and its wind potential is more limited than that  of other states.

The Hidalgo energy transition plan also notes that there are not currently any projects, permits or concessions for the exploration of geothermal energy in the state.

The small state of Hidalgo’s economic activity totals nearly 2% of Mexico’s national GDP, with potential to grow if its industry has access to more affordable energy.

The manufacturing sector accounted for 24% of Hidalgo’s GDP in 2021, which is among the more energy-intensive of the main economic activities in the state.

The state government of Hidalgo currently has a joint initiative with the private sector to offset the costs for Hidalgo-based companies who apply to install solar panels to reduce their electricity costs.

The program listed on the AEEH website says it is supported in part by Banverde, which says it is the largest solar distributed generation financing company in Mexico.

Hernandez said all the different facets of the energy transition plan from attracting energy investment to improving energy efficiency and reducing energy poverty must be addressed and advanced at the same time to keep stakeholders of all kinds engaged.

Claudia De La Rosa

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