New report provides detailed analysis of the Energy and Utilities market
- By April Murelio -
The newly published Mexico Power Report forecasts that the country will account for 22.38% of Latin America regional power generation by 2013, with a developing power surplus available for export to the US. The Latin America power generation estimate for 2008 is 1,130 terawatt hours (TWh), representing an increase of 2.5% over the previous year. We are forecasting growth in regional generation to 1,320TWh by 2013, representing a rise of 16.9%.
We estimate Latin American thermal power generation in 2008 at 453TWh, accounting for 40.0% of total electricity supplied in the region. Our 2013 forecast is 523TWh, implying 15.5% growth, trimming the thermal generation’s market share to 39.6%, despite environmental concerns that should promote renewables, hydro-electricity and nuclear power. Mexico’s 2008 thermal generation was around 209TWh, 46.04% of the regional total. By 2013 it is expected to account for 46.20% of thermal generation.
For Mexico, oil is the dominant fuel, accounting for 52.8% of 2008 primary energy demand (PED), followed by gas at 35.5%, coal at 5.3%, hydro-electric energy at 5.1% and nuclear energy with a 1.4% share of PED. Regional energy demand is forecast to reach 726mn tonnes of oil equivalent (toe) by 2013, representing 14.5% growth. Mexico’s market share in 2008 was 25.82%, easing to a forecast 24.73% by 2013. The country’s 10.2TWh of nuclear demand in 2008 is forecast to reach 13.0TWh by 2013, with its share of the Latin American nuclear market set to rise from 32.59% to 33.33%.
Mexico is still ranked fifth, ahead of Venezuela, in the Power Business Environment Ratings, reflecting considerable market size and reasonable growth prospects. The lack of privatisation progress, poorly developed competitive landscape and demanding regulatory environment conspire with country risk factors to depress the score and keep Mexico near the foot of the table for the foreseeable future.
BMI is now forecasting average annual Mexican real GDP growth of just 0.84% between 2009 and 2013, with a decline of 7.10% forecast for 2009. The population is expected to expand from 106.7mn to 110.8mn over the period, with GDP per capita forecast to increase by 24%. Electricity consumption per capita is now expected to decline during the period by 1.2%. The country’s power consumption is expected to increase from an estimated 203TWh in 2008 to 208TWh by the end of the forecast period, providing a rising net export capacity, assuming 2.6% annual growth in electricity generation.
Between 2008 and 2018, we forecast an increase in Mexican electricity generation of 41.3%, above average for Latin America. This equates to 22.8% in 2013-2018, up from 15.1% in 2008-2013. PED growth is set to grow from 9.7% in 2008-2013 to 15.9% in 2013-2018, or 27.2% for the entire forecast period. An increase of 31% in hydro-power use in 2008-2018 is a key element of generation growth.
Thermal power generation is forecast to rise by 42% between 2008 and 2018, with nuclear demand rising by 57%. More details of the longer-term power forecasts can be found later in this report.