A wind farm in the state of Baja California, in Northwestern Mexico. This territory depends on fossil fuels for electricity generation, while the contribution of renewables is still low, but it is gradually moving towards residential solar generation. Credit: Sempra

By Emilio Godoy
MEXICO, Sep 15 2025 (IPS)

Over the past four months, Mexican researcher Nicolás Velázquez has paid around US$23 for electricity, thanks to the photovoltaic system installed in his home in the northern city of Mexicali.

“You can see the direct benefit. My neighbor received a bill over US$400. The problem is the high temperatures, which double demand” from March to August, said Velázquez, coordinator of the  Center for Renewable Energy Studies at the Engineering Institute of the public Autonomous University of Baja California.

Due to the high temperatures in cities such as Mexicali, capital of the northwestern state of Baja California, people need air conditioning systems during the summer, which increases electricity consumption in a state with 3.77 million inhabitants, affected by a shortage of infrastructure and generation.“Distributed generation is better for us. It is done by Mexican companies. We import the technology, but there is a chain of Mexican participation. We participate from engineering onwards, activating the economy to a certain level, helping the residential sector”–Nicolás Velázquez.

In late August, residents of several neighborhoods in Mexicali blocked the highway between that city and neighboring Tijuana due to a lack of electricity.

In an attempt to alleviate the situation, the Mexican government launched the Techos Solares del Bienestar (Solar Roofs for Welfare) program in March, aimed at low-income homeowners who pay high rates and consume between 400 and 1,000 kilowatt hours between July and August, so they receive solar panels for their homes in Mexicali and the neighboring municipality of San Felipe.

It is one of the steps to relaunch the energy transition to less polluting sources that the previous government halted in 2018.

The initial plan is to install solar panels in 5,500 homes in Mexicali with an investment of around US$10 million. The ultimate goal is to cover 150,000 homes by 2030. The scheme promises to reduce electricity bills from 49% to 89%.

For Velázquez, the central question revolves around the advisability of resorting to centralized or distributed generation, which consists of electricity production by systems of many small generation sources close to the end consumer.

“Distributed generation is better for us. It is done by Mexican companies. We import the technology, but there is a chain of Mexican participation. We participate from engineering onwards, activating the economy to a certain level, helping the residential sector,” he said from Mexicali.

In his opinion, “there has to be a balance between centralized and distributed generation, because there will not be a single solution. More energy justice is achieved through distributed generation.”

In Mexico, home to some 129 million people, there are at least 12,000 communities without electricity and some 9,000 homes without connection to the national grid, a quarter of which are located in Mexicali, which had 1.05 million inhabitants according to the 2020 census.

Small-scale or distributed generation is on the rise in the country.

Since 2007, the government’s Energy Regulatory Commission has authorized 518,019 licenses for a distributed energy generation capacity of 4,497 megawatts (MW). In 2024, it approved 106,934 interconnections for 1,086 MW.

The western state of Jalisco and the northern states of Nuevo León and Chihuahua top the list, while Baja California ranks 14th among the 32 Mexican states.

In July, the government’s National Energy Commission updated the regulations for interconnected self-consumption for installations between 0.7 and 20 MW, which expands the margin for distributed generation, also known as citizen generation.

Solar panels in a community in the municipality of Ensenada, in the northwestern state of Baja California. The existing microgrid in that town provides electricity to the small community. Credit: Secihti

More promises

The energy policy of president Claudia Sheinbaum, in office since October 1, has so far been marked more by proposals than by concrete actions, and Baja California is no exception to this dynamic.

Her government will allocate US$12.3 billion for electricity generation, US$7.5 billion for transmission infrastructure, and US$3.6 billion for decentralized photovoltaic production in homes.

The plan would add 21,893 MW to the national energy matrix, reaching 37.8% clean energy from the current 22.5%, so that the state-owned Federal Electricity Commission (CFE) would hold 54% of the market, with the rest going to private and individual entities.

On August 26, the president announced the construction of two solar thermal plants in the state of Baja California Sur, which shares a peninsula with Baja California, with a public investment of US$800 million to generate more than 100 MW. The territory is also isolated from the national grid and suffers from a chronic energy deficit.

Solar thermal energy converts solar radiation into electricity using mirrors to generate steam and drive turbines, as well as enabling energy storage.

The CFE plans to tender phase II of the Puerto Peñasco photovoltaic plant, in the town of the same name in the northern state of Sonora, with a capacity of 300 MW and 10.3 MW of battery backup. The first 120 MW phase of this facility has been operating since 2023. Completed in 2026, it will contribute 1,000 MW at a cost of US$1.6 billion.

However, the Mexican government continues to promote fossil fuels, despite the urgency of phasing them out, as it seeks to strengthen the CFE and the state-owned Petróleos Mexicanos.

All of this impacts places such as Baja California, where 16 public and private power plants operate, with an installed capacity of 3,461 MW, including three wind farms with more than 300 MW of capacity and three solar farms with 50 MW.

The private company Sempra Infraestructura, a subsidiary of the US company Sempra, is building a wind farm with a capacity of 300 MW, which is expected to be operational in 2026. In addition, CFE operates a 340 MW geothermal plant.

Despite its shortcomings, the state exports around 1,100 MW to the neighboring US state of California and imports around 400 MW. Baja California could produce 6,550 MW of solar power, 3,495 MW of wind power, and 2,000 MW of geothermal power.

In addition, CFE is building two combined-cycle power plants in Baja California that burn gas and generate steam to drive turbines, which would reduce blackouts.

The country faces insufficient production to meet annual demand growth of about 4% and an obsolete power grid.

In the first half of 2025, the country generated 310.49 terawatt-hours, virtually the same as during the same period last year. Some sources, such as gas, hydroelectric, wind, and photovoltaic, increased, but others, such as thermoelectric and nuclear, decreased.

In Mexico, electricity generation depends mainly on fossil gas, followed by hydroelectricity and nuclear energy. Renewable sources have a capacity of 33,517 MW, but only contribute one-fifth of the electricity produced.

Energy map of the northern Mexican state of Baja California. Electricity generation is not enough to meet growing demand, causing frequent blackouts. Credit: Government of Baja California

New schemes

Baja California’s 2022-2027 Energy Program consists of four strategies, including providing access to electricity to remote communities and unregulated housing, as well as promoting the rapid transition to decarbonization and the use of clean energies.

In addition, it envisions eight outcomes, including the promotion of two annual microgrid power generation projects for isolated communities and a 3% increase in alternative electricity generation. However, there is no evidence of progress toward these goals.

If it so desired, the Mexican government could transform its national electricity subsidy of more than US$5 billion annually into distributed generation.

The Universal Electricity Service Fund is a case in point. Intended to cover marginalized communities, available data indicate that it has covered more than 1,000 municipalities out of a total of 2,469, including two in Baja California, since 2019.

Velázquez proposed that these funds could finance solar panels and microgrids.

“Year after year, they give a subsidy, but if these families were provided with a photovoltaic system, it would solve the problem at its root. We need to look for more far-reaching measures; the actions have to be different,” he said.

In December 2023, during the climate summit in Dubai, United Arab Emirates, Mexico joined the Global Renewables and Energy Efficiency Pledge, which consists of tripling alternative installed capacity and doubling the energy efficiency rate by 2030. In comparison, Sheinbaum’s plans fall short.

July 2014 floods in Russia but authorities turning blind eye to climate change. Credit: takemake.ru

By Mikhail Matveev
MOSCOW, Aug 30 2014 (IPS)

The recent call from Russian Prime Minister Dmitry Medvedev for “tightening belts” has convinced even optimists that something is deeply wrong with the Russian economy.

No doubt the planned tax increases (introduction of a sales tax and increases in VAT and income tax) will inflict severe damage on most businesses and their employees, if last year’s example of what happened when taxes were raised for individual entrepreneurs is anything to go by – 650,000 of them were forced to close their businesses.

Nevertheless, it looks like some lucky people are not only going to escape the “belt-tightening” but are also about to receive some dream tax vacations and the lucky few are not farmers, nor are they in technological, educational, scientific or professional fields – it is the Russian and international oil giants involved in oil and gas projects in the Arctic and in Eastern Siberia that stand to gain.

“In October [2013], Vladimir Putin signed a bill under which oil extraction at sea deposits will be exempt from severance tax. Moreover, VAT will not need to be paid for the sales, transportation and utilisation of the oil extracted from the sea shelf,” noted Russian newspaper Rossiiskie Nedra.“It looks like some lucky people are not only going to escape the ‘belt-tightening’ but are also about to receive some dream tax vacations and the lucky few are not farmers, nor are they in technological, educational, scientific or professional fields – it is the Russian and international oil giants involved in oil and gas projects in the Arctic and in Eastern Siberia that stand to gain”

Some continental oil projects were alsoblessedby the “Tsar’s generosity”: “For four Russian deposits with hard-to-recover oils [shale oil, etc.] – Bazhenovskaya [in Western Siberia] and Abalakskaya in Eastern Siberia, Khadumskaya in the Caucasus, and Domanikovaya in the Ural region – severance taxes do not need to be paid. Other deposits had their severance tax rates reduced by 20-80%.”

In fact, the line of thinking adopted by Russian officials responsible for tax policy is very simple. Faced with the predicament of an economy dependent on oil and gas (half of the state budget comes from oil and gas revenue, while two-thirds of exports come from the fossil fuel industry), they decided to act as usual – by stimulating more drilling and charging the rest of the economy with the additional tax burden.

There have been many warnings from well-known economists about the “resource curse” [the paradox that countries and regions with an abundance of natural resources tend to have less economic growth and worse development outcomes than countries with fewer natural resources] – and its potential consequences for the countries affected: from having weak industries and agriculture to being prone to dictatorships and corruption.

For a long time, however, economists have been keen on separating the economic and social impacts of fossil fuel dependency from the environmental and climate-related problems. But now, these problems are closely interconnected, and Russia might be the first to feel the strength of their combination in the near future.

Medvedev may not have read much about the “resource curse” but he should at least be familiar with the official position of the UN Framework Convention on Climate Change (UNFCC), whose Executive Secretary Christiana Figueres has said that three-quarters of known fossil fuel reserves need to stay in the ground in order to avoid the worst possible climate scenario.

One should at least expect this amount of knowledge from Russia as a member of the UN Security Council and it will be interesting to note whether the Russian delegation attending the UN Climate Summit in New York on September 23 will be ready to explain why, instead of limiting fossil fuel extraction, the whole country’s economic and tax policy is now aimed at encouraging as much drilling as possible.

However, it is not just the United Nations that has been warning against the burning of fossil fuels due to the related high climate risks. In 2005, Russia’s own meteorology service Roshydromet issued its prognosis of climate change and the consequences for Russia, stating that the rate of climate change in Russia is two times faster than the world’s average.

Roshydromet predicted a rapid increase in both the frequency and strength of extreme climate events – including floods, hurricanes, droughts, and wildfires. The number of such events has almost doubled during the last 15 years, and represent not only an economic threat but also a real threat to humans’ lives and their well-being,

Consider this summary of climate disasters in Russia during an ordinary July week (not including any of the large natural disasters such as the floods in Altai, Khabarovsk, and Krymsk, or the forest fires around Moscow in 2010):

“Following the weather incidents in the Sverdlovsk and Chelyabinsk District where snow fell last weekend, a natural anomaly occurred in Novosibirsk, resulting in human casualties … Two three-year-old twin sisters died after a tree fell on them during a strong wind storm in the town of Berdsk, Novosibirsk District.”

“The flood in Yakutia lasted a week and resulted in the submersion of Ozhulun village in Churapchinsky district last Saturday. Due to the rise of the Tatta River, 57 house went under.”

“Flooding in Tuapse [on the coast of the Black Sea] occurred on July 8, 2014 … [and] has left 236 citizens homeless.”

Cars swept away in July 2014 floods in Russia. Credit: takeme.ru

Is it not worrisome that so many climate disasters have to occur before Russian officials start to realise that climatologists are not lying? Or perhaps they are simply not inclined to take the climatologists’ warnings seriously.

Another significant problem could arise for Russia if oil consumers start taking U.N. climate warnings seriously – and there is evidence that this is happening.

The European Union (still the main consumer of Russian oil and gas) has announced an ambitious “20/20/20 programme” – increasing shares from renewables to 20 percent, improving energy efficiency by 20 percent, and decreasing carbon emissions by 20 percent. The United States has decided to decrease carbon emissions from power plants by 30 percent. These are only first steps – but even these steps can help decrease fossil fuel consumption.

Fossil fuel use has only very slowly been increasing in the United States and decreasing in Europe in the last five years. On the other hand, demand for oil has continued to rise in China and Southeast Asia, and it is perhaps this – rather than the recent “sanctions” against Russia over Ukraine – that inspired President Vladimir Putin’s recent “turn to the East”.

But there are serious doubts that Asia’s greed for oil will continue into the future. China recently admitted that it will soon be taking measures to limit carbon emissions – for the first time in its history. China has already turned to green energy andled the rest of the worldin renewable energy investment in 2013.

Will other Asian countries follow suit? Perhaps – because they certainly have a very strong incentive. According to Erin McCarthy writing in the Wall Street Journal, South and Southeast Asia’s losses due to global warming may be huge, and its GDP may be reduced by 6 percent by 2060, despite the measures taken to curb its emissions.

What does this mean for Russia?

Well, if the oil-consuming countries meet their carbon emission targets, we can expect a 10-20 percent decrease in oil demand in the next ten years, maybe more. Any decrease in demand usually induces a decrease in price – but not always proportionally. Sometimes, especially if the market is overheated, even a small decrease in demand can trigger a drastic falls in price. Economists call such a situation a “bursting bubble”.

Today, the situation in the oil (and, in general, fossil fuel) market is often called a “carbon bubble”. Because of high oil prices, investors are motivated to make investments in oil drilling in the hopes of earning a stable and long-term income.

But once the world starts taking climate issues seriously and realises that most of the oil needs to be left in the ground, oil assets will fall in value. Investors will try to withdraw their money from the fossil fuel sector, and, facing a crisis, oil companies will be forced to decrease both production and prices.

If the “carbon bubble” bursts, Russia will be left with sustainable businesses (that are being choked by the nation’s own tax politics) and with a perfect network of shelf platforms, oil rigs, and pipelines (which will be completely unprofitable and useless). Thus, by making fossil fuels the core of its economy, Russia is taking twice the number of risks.

First, it risks ruining the climate, and second, it risks ruining its own economy. It looks like Russia will lose at any rate: if the leading energy consumers are unable to decrease their oil consumption, the climate will be ruined everywhere, including Russia. If they manage to decrease their dependence on fossil fuel, the Russian economy will be ruined.

This certainly is not looking pleasant, especially if we add in the high probability of a major disaster like the Gulf of Mexico Oil spill happening in the Arctic, as well as countless minor leaks possibly occurring along the Russian pipelines.

But maybe Russia just has no other alternative to an economy dependent on fossil fuels?

In that case, perhaps it is worth mentioning a recent article by Russian financier Andrei Movchan in the Russian Forbes magazine. Movchan convincingly shows that the Achilles’ heel of the modern Russian economy is its extremely underdeveloped small and medium-sized businesses. And it looks like the current tax plans would literally exterminate them.

If Russia were able to reverse this tax policy and make small businesses play as big of a role in the economy as they do in the United States or Europe, there could be economic growth comparable to the growth expected from oil and gas – without all the frightful side effects of an economy driven by fossil fuels.

Sounds like a dream, but the first step to making it a reality can be simple: get rid of big oil lobbying in the government and try to reform the taxation system to suit the interests of Russian citizens instead of the interests of the big oil corporations.

(Edited by Phil Harris)

* Mikhail Matveev is 350.org Communications Coordinator for Eastern Europe, Caucasus, Central Asia and Russia