Energy in Motion: Investment Opportunities in Baja California

On February 12, 2014, the Baja California state government hosted the "Energy in Motion" Forum, as part of the "Baja California Week in Mexico" event held on February 10-14 at the Club de Industriales in Mexico City, with the ultimate goal of attracting more domestic and foreign investments to the state and repositioning it as a highly competitive area. The Energy Forum, headed by Baja California Secretary of Economic Development Carlo Bonfante, was attended by Maria Elena Giner, General Manager of the Border Environment Cooperation Commission (BECC).

In her remarks, Maria Elena Giner highlighted the achievements of the BECC and its partner, the North American Development Bank (NADB), in Baja California where "we have certified 34 projects with a combined cost of US $1.5 billion –primarily projects in the areas of water and wastewater, street paving, sanitary landfills, and renewable energy." Projects certified in Baja California represent 29% of the total number of certified projects along the Mexican border and 40% of all the certified capital investments in Mexico, she said.

"Of the 227 projects that BECC has certified throughout the border, valued at more than US $7 billion, about 131 focus on water issues and 20 on energy." Of the latter, the binational official said, in the last 24 months the BECC and NADB have certified and funded 1,000 megawatts of renewable energy.    

During his comments at the forum, the CEO of IENOVA, Carlos Ruiz Sacristan, assured that investing in Baja California was a wise choice. He said "it is a border state that has great opportunities and part of what the state requires is enough energy at a competitive price. We have invested nearly US $1.9 billion in the state, and we also have a forthcoming project focused on wind energy with an investment of about US $ 300 million."

He also called the Energy Reform a very important factor for investing in this market niche "as it will establish and meet the objectives of having more energy at more competitive prices, and this will bring in investments to develop the infrastructure required by the country. I think this will bring about significant results."

Francisco Javier Orduño, Director of the Baja California State Energy Commission, said that his is one of the states with optimal features to develop wind energy, "since we have an average of 8 meters per second, one of the best in the country because we have the Sierra Juarez and San Pedro Martir mountain ranges."  

Finally, the CEO of Mexico Power Group, John D. Pock, presented some success stories and said that committing to this market niche has certainly been one of the best investments ever made by his company. He said: "In a pre-development phase, we have US $80 million invested in Mexico, in addition to US $1.5 billion in projects coming up in the next two years."

Maria Elena Giner also noted that under the border climate change project, BECC has played a major role in assisting the six Mexican border states in the development of their greenhouse gas inventories and has advanced the development of their State Climate Action Plans (SCAPs) in coordination with the National Institute of Ecology and Climate Change. Additionally, using funding assistance from the United States Agency for International Development (USAID) and in coordination with the State Energy Commission, water utilities in Baja California will be able to implement a greenhouse gas reduction and energy efficiency program.

Regarding this issue, Maria Elena Giner said that such programs are essential, as water utilities have a high energy demand. In Baja California, she said, the Tijuana utility uses 42% of its budget to pay its electricity bill; Tecate used 28%, Mexicali 22%, and Ensenada 20%.

Under this program that includes the development of energy audits, the utilities will be able to improve the efficiency of their electrical and mechanical equipment, reduce costs, use renewable energy sources, and strengthen their institutional capacities, BECC General Manager Giner said.