Analyzing Scenarios for the Integration of Renewable Energy Sources in the Mexican Energy System

 

This paper uses numerical techno-economic modelling to analyse the effect of current national renewable targets and climate goals on the cost and structural composition of the Mexican energy system. For this, we construct a scenario base analysis to compare current policies with two alternative states of the world—one without climate policies and one attaining full decarbonization. Furthermore, an additional iterative routine allows us to estimate the cost-optimal share of renewable technologies in the energy sector and the effect that deviating from this share has on total discounted system costs, emissions and the structure of the energy mix. In general, model results exhibit three key insights—(1) A marked dependence of the energy system on photovoltaics and natural gas; (2) The 2050 cost-optimal share of renewables for the production of electricity, transportation and industrial heating is respectively 75%, 90% and 5%; and (3) As national renewable targets for the power sector are lower than the cost-optimal share of renewables, equivalent to the shares in an scenario without climate policies and completely disconnected from national climate goals, these should be modified.