Structural Shift and Its Implications on Air Emissions

As mentioned earlier, the public sector installed capacity in Mexico is dominated by fossil fuels, with coal's share being relatively small. Hydropower generation capacity is the next largest capacity, although its contribution to total generation is relatively small (Fig. 11.11). Recent trends in Mexican power sector indicate a sharp decline of fuel oil in the generation mix, primarily driven by local air pollution concerns, and substitution of capacity with IPP-owned natural gas combined cycle plants (Fig. 11.12). This shift in the fuel share has had clear impact on emissions of criteria pollutants and GHG emissions from the Mexican power sector.

Electricity generation from the public sector peaked in 2001 and has continued to decline since then, despite increase in the overall generation. Much of this is

because of increasing environmental pressure, wherein the combustion of high-sulfur containing residual fuel oil has been frowned upon, especially for plants located near heavily populated metropolitan areas.

The share of IPPs in the installed generation capacity has been steadily increasing in the Mexican power sector. They contributed over one-fifth of the total generation capacity, but were responsible for about one-third of total electricity generation in Mexico in 2007. These IPP plants, however, have significantly lower share of criteria pollutants and GHG emissions from the power sector (Fig. 11.13). Overall this structural shift has resulted in decreasing emission intensity from the power sector as a whole. Emission intensity of NOX, CO2 and PM has declined between 20% and 25%, whereas SO2 emission intensity has seen most dramatic impact, and has decreased by about 40% from 2002 through 2007 (Fig. 11.14).

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