VZCZCXRO2717
PP RUEHCD RUEHGD RUEHHO RUEHMC RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
DE RUEHME #0671/01 0652222
ZNR UUUUU ZZH
P 062222Z MAR 09
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC PRIORITY 5494
INFO RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE PRIORITY
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHC/DEPT OF LABOR WASHINGTON DC
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RHMFIUU/HQ USNORTHCOM
RHMFISS/CDR USSOUTHCOM MIAMI FL
RHEHAAA/NSC WASHINGTON DC

UNCLAS SECTION 01 OF 03 MEXICO 000671 
 
SENSITIVE, SIPDIS 
 
STATE FOR WHA/MEX, WHA/EPSC, EB/IFD/OMA, AND DRL/AWH 
STATE FOR EEB/ESC 
USDOC FOR 4320/ITA/MAC/WH/ONAFTA 
USDOC FOR ITS/TD/ENERGY DIVISION 
TREASURY FOR IA 
DOE FOR INTERNATIONAL AFFAIRS 
STATE PASS TO USTR 
STATE PASS TO FEDERAL RESERVE 
 
E.O. 12958: N/A 
TAGS: ECON EFIN ENRG EINV PGOV SENV MX
SUBJECT: CLEAN AND RENEWABLE ENERGY - POSSIBLE INITIATIVES WITH 
MEXICO 
 
¶A.  Mexico 299 
¶B.  Mexico 156 
¶C.  Mexico 42 
¶D.  08 Monterrey 397 
 
¶1. Summary and Introduction:  The GOM is interested in working more 
closely with the USG on renewable energy, energy efficiency and 
climate change.  Post believes the Mexican position offers a 
significant opportunity to develop closer ties in a priority area 
for both countries and is exploring several options with Mexican 
officials, NGOs, academia and the private sector on how we can 
better coordinate our efforts on these topics.  We have found both 
government and private sector interlocutors eager to engage. 
Embassy Mexico offers the following ideas for bilateral cooperation 
on clean and renewable energy for Washington agencies' 
consideration: 
 
 
Knowledge Sharing: 
------------------ 
 
¶2.  PROMOTE ACADEMIC EXCHANGES:  There is a strong interest among 
Mexican Universities, Think Tanks and NGOs to expand and strengthen 
ties on renewable and development and policy dialogue.  If funding 
is available, an initiative under the rubric of the USAID TIES 
Program which creates university partnerships and promotes 
scholarships, could focus exclusively on clean and renewable energy. 
 Potential Mexican partners in this area could include the 
Universidad Nacional Autonoma de Mexico; Universidad Iberoamericana; 
Instituto Tecnologico Autonomo de Mexico (which has successfully 
worked on hydrocarbons through an existing TIES grant) and Monterrey 
Tech. 
 
¶3.  BUILD INSTITUTIONAL TIES:  The Mexican Government has requested 
our assistance to build collaboration between US and Mexican 
government research institutions (DOE laboratories including Thomas 
Edison Center and Argonne Laboratories; the Mexican Institute for 
Electric Energy Research and other institutes.)  Under the October 
2008 energy reform legislation, $9 billion pesos ($600 million)over 
three years will be allocated to renewable energy research and 
development.  As Mexico implements the reforms, the GOM would be 
interested to learn how the USG organizes R&D grants.  Several 
leading Mexican NGOs, including the Mario Molina Center also have 
expressed interest in closer collaboration.  (Note:  Dr. Mario 
Molina is one of the most prominent Mexican voices on climate change 
and renewable energy.  He is a Nobel Physics Prize Winner, and a 
dual national who spends half his time at UC San Diego.  He has 
advised both Presidents Obama and Calderon on climate change policy 
and is a close and longstanding friend of Energy Secretary Chu.  End 
Note) The Mario Molina Center is a partner in developing the Mexican 
Climate Change Strategy and has expressed interest in partnering 
more closely with the USG.  It would be valuable to bring Mario 
Molina specifically and his Center more generally into a bilateral 
initiative on Climate Change and Clean and Efficient Energy.  Other 
smaller Mexican NGOs could also be brought into this initiative. 
 
 
ENERGY EFFICIENCY: 
------------------ 
 
¶4.  BUILDING RETROFIT - The Ibero American University is being 
retrofitted for energy efficiency through a self funded program 
where technology installed modernizes facilities and is paid for by 
guaranteed energy and operational savings.  This particular program 
is being implemented with Honeywell technology under the Clinton 
Climate Initiative (four international companies have this type of 
technology including Siemens, Honeywell, GE and X.)  There is 
significant potential to expand these types of programs to schools, 
hospitals and other public buildings.  One obstacle is that under 
Mexican law Government Agencies cannot incur debt.  US and Mexican 
officials could exchange information about improving energy 
efficiency in public buildings. 
 
¶5.  ENERGY EFFICIENT APPLIANCE EXCHANGE - Mexico has implemented a 
program to exchange light bulbs, air conditioners and refrigerators 
 
MEXICO 00000671  002 OF 003 
 
 
for more energy efficient models.  This program is focused on lower 
income communities who hold on to less efficient appliances.  There 
may be opportunities between the US and Mexico to collaborate on 
these appliance exchange programs which generate significant energy 
savings. 
 
Renewable Energy 
---------------- 
 
¶6.  FINANCING - Spanish, German and French technology dominate the 
renewable energy sector in Mexico.  However, the current economic 
crisis combined with the falling price of oil have made financing 
renewable energy projects more difficult.  We could create a forum 
to inform Mexican investors about US technologies and financing 
opportunities - or use an existing event which provides 
opportunities for US exporters.  We would recommend a public/private 
partnership event involving US institutions (OPIC, EXIM, TDA, etc) 
as well as International Financial Institutions (WB, IADB, etc) 
which could take place along the margins of other upcoming energy 
related events. 
 
¶7.  OUTREACH - REGULATORY AND SOCIAL BARRIERS - In Mexico as in the 
US, both regulatory and social barriers have limited the expansion 
of renewable energy.  There is an opportunity to collaborate closely 
with Mexico both from a broad public policy perspective as well as a 
technical perspective to address these issues.  Academics, 
scientists and state officials (especially border states) could be 
brought into such a discussion. 
 
¶8.  INCENTIVES - Mexico does not provide subsidies for renewable 
energy projects.  Under Mexican law, the government sets 
electricity.  These factors together have dampened investment 
interest in renewable.  A USAID study addressing incentives and 
social perceptions related to renewable energy, especially wind 
energy, will be released in April 2009.  There are opportunities for 
the US and Mexico to jointly examine incentives for increasing 
renewable energy generation. 
 
¶9.  TRANSMISSION GRIDS - The renewable energy potential is Mexico is 
generally far from population centers.  Grid interconnection is an 
issue.  USAID has been working on this with GOM through a project 
that ends this month.  If additional funding were made available, 
continued collaboration on this issue would be valuable. 
 
¶10.  ENERGY AND COMPETITIVENESS - USAID is working on a program 
which addresses energy among several key components affecting 
Mexico's economic competitiveness.  The energy component focuses on 
renewable production and energy conservation and includes 
small-scale renewable energy projects and research on international 
best practices.  This project highlights the connection between 
development and clean energy technologies and has great potential 
for expansion. 
 
¶11.  COLLABORATION ON SPECIFIC TECHNOLOGIES - Mexico is interested 
in working more closely with the USG to develop certain specific 
technologies including solar, geothermal and wind.  There may be 
opportunities for US institutions to work more closely with Mexican 
institutions on research and development via National Science 
Foundation Grants and its Mexican counterpart CONACYT to develop and 
commercialize technologies. 
 
TRILATERAL: 
----------- 
 
¶12.  The North American Energy Working Group (NAEWG) Ministers last 
met July 2007 in Canada.  It is Mexico's turn to host the next 
ministerial meeting, but no date or agenda has been set.  We suspect 
the GOM is waiting for Energy Secretary Kessel to meet with DOE 
Secretary Chu before making a proposal for a meeting.  In the 
meantime, the Mexicans have signaled certain topics on which they 
would like to focus. 
 
¶13.  REVITALIZE AGREEMENT ON ENERGY SCIENCE AND TECHNOLOGY:  The 
agreement was signed in July 2007 under the North American Energy 
Working Group (NAEWG) and allows the three countries to co-finance 
 
MEXICO 00000671  003 OF 003 
 
 
research projects.  The challenge has been finding projects of 
interest to all three countries.  The architecture is in place, but 
no projects have been started.  Possible areas of interest include 
biofuels and carbon capture and storage. 
 
¶14.  EXPAND TRILATERAL STANDARDS AND ENERGY STAR - NAEWG has 
promoted establishing trilateral standards for domestic appliances. 
Mexico would be interested in expanding the program.  It may also be 
possible to encourage Mexico to participate with the US and Canada 
in the Energy Star efficiency program. 
 
¶15.  PROMOTE GREEN BUILDINGS - The Mexican National Commission for 
Energy Savings (CONUEE - formerly known as CONAIE) is interested in 
launching a project through the Commission for Environmental 
Cooperation (CEC) to reduce energy use and CO2 emissions by 
fostering green buildings.  The Mexican proposal emphasizes 
financial and environmental metrics for green building performance. 
In Canada, Mexico and the US, commercial and residential building 
operations account for approximately 23, 30 and 40 percent of energy 
consumption, respectively.  These buildings release about 2,200 tons 
of CO2 in the air, approximately 35% of the continents total. 
 
MULTILATERAL: 
------------- 
¶16.  The GOM does not have the resources to play a significant role 
multilaterally on energy issues beyond its current commitments. 
Mexico will host the third biannual meeting of state owned oil 
companies in May 2010 and substantial resources are already being 
committed to planning that activity.  The Mexicans will be 
supportive of other multilateral and regional energy events but 
realistically will not have the personnel to devote too much 
attention to new initiatives. 
 
COMMENT: 
-------- 
 
¶17.  The Mexican press reported heavily on President Obama's trip to 
Ottawa in February and the trip's focus on energy and environment. 
The US-Canada Clean Energy Dialogue was noted and senior GOM 
officials commented in the press that it is a program Mexico would 
be interested in joining.  We expect the Mexicans will raise this 
with senior USG officials and we need to be prepared to respond when 
they do.  Engaging with the GOM in a series of projects to promote 
clean and renewable energy may provide Mexico with an equally high 
profile initiative to address the GOM interest.  However, the degree 
to which we can interact with Mexico on the proposals outlined in 
this cable will depend largely on available resources both in Mexico 
and the US.  In the meantime, post will maximize the impact of 
current resources by expanding outreach on renewable energy and 
climate change - both through public speaking opportunities and 
existing programs. 
 
BASSETT