Community acceptance challenges put Mexico’s wind ambitions at risk 

Mexico is looking to wind farms to reach its renewable energy targets. However, completion of wind projects has proven challenging as negotiations between indigenous communities and developers have sometimes ended in long delays and even project suspensions.

The Pena Nieto administration hopes the country will be generating 25% of its electricity from renewable sources by 2018. To achieve this, the government set a goal of bringing 10,140 MW of new renewable energy capacity online, with 7,590 MW of that wind.

Leopoldo Rodriguez, president of the Mexican Wind Energy Association (Amdee) told S&P Global Platts the country is in danger of failing to meet its wind goals because obtaining acceptance by communities has become such a lengthy process.

In May, the Regulatory Energy Commission (CRE) said that since the enactment of the 2013-4 energy reforms it has issued 239 power generation permits to private companies. Of those permits, 42.7% are for renewable energy projects with a total investment value of $22.4 billion.

Every one of the permits requires the developer to submit community impact studies to the Secretariat of Energy for approval. Rodriguez said the Mexican government has a backlog of applications that is delaying the construction of projects.

Also, developments that affect indigenous communities need a transparent and informed consultation with the communities organized by the government. A process that, according to Rodriguez, does not have yet defined rules and guidelines.

“The problem is that no consultations are being carried out right now by the government and the indigenous communities,” said Rodriguez. “This is an issue that needs to be unblocked because it is stopping the development of important projects.”

The situation is especially pressing in the wind-rich Isthmus of Tehuantepec, a thin area of land in the southern state of Oaxaca, which multiple indigenous groups such as the Binniza, Zapotec, and Huave call home.

According to multiple NGOs, if community tensions are not resolved in Oaxaca, they could spill over and affect the perception of wind projects in other regions of Mexico.

Oaxaca is a central part of Mexico’s wind strategy. According to Amdee, the country had 3,073 MW of installed capacity in 2015, with 76.8% of it located in Oaxaca.

Industry groups expect Oaxaca’s capacity will grow from 2,359 MW in 2015 to 5,564 MW in 2018 – over half the 8,992 MW the Mexican government needs to achieve its goal.

A 2015 report by the Center for Civic Collaboration about wind development in Mexico shows tensions in Oaxaca are creating legal uncertainty for developers over the ownership of lands and the distribution of benefits to landowners and the community.

“This has driven some companies to worry about the financing of their projects,” according to the report, which interviewed over 500 stakeholders including industry, government and community leaders in Mexico.

Some developers interviewed by the CCC said they are analyzing in more detail the situation in the communities because they are now struggling to access financing from some international investors due to accusations of human right violations and negative media attention.

In December, the Netherlands’ PGGM withdrew $285 million it had pledged for the $841 million, 396-MW Eolica del Sur wind project in Oaxaca. The pension group argued that after four years of delays and opposition from indigenous communities the project was not profitable enough.

Leopoldo Rodriguez said it is not possible to look solely at the community problems caused by wind projects because Oaxaca has unique characteristics and had many problems long before developers entered the picture.

According to the National Commission for the Development of the Indigenous Peoples, 48% of Oaxaca’s population is indigenous. They are among the poorest, most uneducated citizens of Mexico, with many only speaking native languages and unable to communicate in Spanish.

Wind projects have “intensified the social tension in a region with existing historical conflicts,” said Emiliano Diaz Carnero, a professor at the Institute for Research in Humanities at Universidad Autonoma Benito Juarez in Oaxaca.

Since 1964, a presidential resolution to distribute territory among the indigenous and rural communities of the area has failed to be fully executed. There is terrain registered at the state level as collective or private and at the federal level as the opposite, creating antagonism over land ownership.

This is the product of local chiefs and national interests that have created multiple social injustices, amongst which are allowing individuals who live outside the isthmus to hold private land title over communal property, said Diaz.

“The situation with wind projects is an extension of the historical conflicts produced by despotism and social injustice,” said Diaz.

Rodriguez said it has been challenging for developers to negotiate with communities in Oaxaca because of how fragmented the territory is.

“In the state, there are over 600 municipalities versus 20 in most states,” said Rodriguez, adding that some projects require as many as 300 agreements, compared with three or one in other parts of Mexico.