Does Mexico’s wind industry deliver more dirty profits than clean energy?

September 21, 2022
private wind farms
Naturgy is one of many European companies operating wind farms in Oaxaca, Mexico. The farms are privatising and dividing up commonly owned agricultural and Indigenous lands.

Almost all wind farms in Mexico are privately owned, typically by European and US transnational companies. While wind farms are touted as climate solutions, the profit-hungry companies are actually causing widespread damage.

Almost two-thirds of Mexican towns and cities are facing severe water shortages, and the country’s Senate declared a climate emergency in 2019. Instead of addressing these issues alternative energy companies in Mexico are focused on exploiting cheap land that is often the common property of farmers and Indigenous people. While companies such as Coca-Cola, Walmart and Mitsubishi use the electricity generated, the common lands are being privatised, and the wind companies are polluting agricultural areas.

The US, meanwhile, has been pressuring Mexico to rush permit granting and to put US energy companies first, at the expense of locals. The US recently opened a formal treaty dispute, with the first round of consultations starting on August 23.

Sempra Energy is headquartered in San Diego and has wind and solar farms in Mexico, near the US border, as well as in the windiest parts of the country. This is so it can pay low rates for land, and then export the energy generated to load serving and industrial entities in the US.

Sempra’s three wind farms and five solar plants are one example of a company profiting from Mexico, with little benefit to locals. A Yaqui activist who opposed a Sempra gas pipeline said he was framed for murder by the company and the Mexican government. He has been in prison since 2016. As with many other energy companies, he said Sempra bribed different Yaqui tribes in order to build through their territory.

Although Sempra doesn’t report its Mexico profits separately, the company made a total of $1.866 billion last year.

Clean energy, dirty profits

Industry and cars consume almost two-thirds of Mexico’s total energy consumption, with industry using double the energy of all residential use, according to government data.

High demand from industry and big business is partly why wind farm companies sell electricity to other companies, rather than directly supplying homes — a model that has generated huge profits, according to Carlos Sanchez Martinez, a community radio activist and Zapoteca Indigenous person. Sanchez has been involved in movements fighting wind farm companies in his area of Juchitan, Oaxaca, since 2002, when he was a high school activist.

There are various lists of wind farms in Mexico, but none are complete. The statistics institute, INEGI, lists 20 farms, just two of which are publicly owned, but there are at least 69 wind farms in 15 states in Mexico.

Sanchez told Truthout: “The wind farms, apart from generating wind energy, at an international level they auction off or sell carbon bonds … that’s how they are making profits from the strength of the wind.” Companies can sell carbon “credits” that allow the entities buying them to release a certain amount of carbon emissions.

He accused the companies of bribing Indigenous people to access their land. “There’s a lot of money involved, and [the companies] don’t pay taxes,” he said. Since these companies also receive financial support from the state, “we are basically helping these companies, so they can access our electricity network.”

Truthout also talked to Teresa Souza Bosch, a lawyer specializing in environmental and energy law, who previously worked for the environment ministry. She argued that private energy companies “will try to maximize their profits, which means they can enter into really predatory agreements with land owners, and that has been a problem”.

Oaxaca has a large proportion of Mexico’s wind farms. Of the 28 in operation in the state, 23 are primarily run by Spanish and French companies. The electricity is sold to Walmart, FEMSA (Coca-Cola), Nestlé, Nissan, Home Depot, Unilever, Heineken and Mexican companies such as Grupo México, Bimbo (a food company), Bancomer (a bank), Soriana (supermarket chain), and others.

Mexican and international law stipulate that Indigenous peoples must be consulted first regarding the use of their land, but in Oaxaca, that has only happened with one of the wind farms. The wind companies have been effectively privatising and dividing up the territory, taking up over 50,000 hectares of common-use land.

Sanchez said “The Mexican state and companies had secret meetings … and in those meetings, they divided up [Indigenous] peoples’ land, and the Mexican state gave [the companies] permits, protection and institutional support.”

He said the companies also met with small farmers and told them they would make lots of money renting their land to companies. But the Spanish company Iberdrola, which owns the Ventosa wind farm, only pays $10 per month per hectare to use the land. In the US, landowners can earn US$3000–7000 per year for the area one turbine takes up — much less than a hectare.

“But individual agreements on collective or common lands are not allowed, and that means the wind farms in Oaxaca are illegal,” said Sanchez.

He alleged that the wind companies used entities in the US dedicated to destroying movements to quell resistance. He said he has documents showing that "in the US they conducted strategic projects about how to deactivate the movement of Popular Assembly of the People of Juchitan [a group created to bring together various communities and farmers to oppose the wind farms and other attacks on the land and territory]".

Companies and the government trump up charges, persecute activists and issue death threats against any local resistance, he added. Sanchez himself has had five criminal charges brought against him by the government and wind farms, including lawsuits for extortion and kidnapping.

Sanchez accused the firms of dumping oil and rubbish on agricultural lands. Piedra Larga, a wind farm in Oaxaca, is owned by Grupo Bimbo, a Mexican multinational food company. It was built just 800 metres from homes. The turbines produce noise of 82 decibels, the blades drip oil onto the land and trees were cut down so the turbines could be erected.

Although wind farms are perceived as a sustainable source of energy, “they don’t just contaminate our lives, but also our way of living,” Sanchez said. “They removed a whole forest area in order to plant the metal turbines. How can they kill life and then pretend to argue for an ecological project?”

So far, years of Zapoteca struggle have achieved one recent victory, with a court suspending a French company’s plans. The company had plans to build the biggest wind farm in Latin America, and activists say that threats and harassment of common land holders continue, in an effort to reverse the suspension.

Sustainability in the face of global inequality

Poorer countries like Mexico typically have less funds available to develop sustainable energy on their own. For that reason, South Africa proposed in 2021 that richer countries commit to $750 billion to help poorer countries move towards climate goals. Such funds could make it easier for Mexico to stop depending on transnationals.

Instead, companies are paying less for land in Mexico compared to their headquarter countries. “Where the turbines are, there are two payments,” Souza explained. “One for land use, and one for the amount of energy generated.”

Juchitan, in Oaxaca, ranks ninth for greatest potential energy generation in the world, she said. “They say that the winds are so strong the first wind turbines they bought broke.… So, you have a place that is geographically unique, that is generating a huge amount of energy, and at the same time you have a place that is Indigenous, and historically poor, and so a lot of companies (use that to) argue that the land is basically worthless.”

However, the same companies have agreements with European farmers, and “even though the energy generation is way lower, they are a lot more generous.”

Financial support isn’t enough, especially as governments continue to back their companies and insist on their “right” to exploit the land and resources in poorer countries.

The US continues to challenge Mexico’s energy policies and its attempt at some sovereignty, arguing that Mexico is breaching the United States-Mexico-Canada Agreement. However, the policies laid out in the agreement only involve Mexico sometimes prioritizing state-owned energy companies over private competitors. Still, the US has claimed that delays in securing permits are “unfair” to its companies and demanded dispute settlement talks with Mexico in July.

The American Petroleum Institute and the American Clean Power Association said in a statement that Mexico’s policies were “discriminatory” and complained that by favouring state-run energy companies, Mexico was threatening “the prosperity of US companies.” In a visit to the US in July, however, Mexican President Andrés Manuel López Obrador met with Jeff Martins, the executive director of Sempra. During that visit, Martins announced new energy projects in Mexico.

Indigenous organisers have repeatedly warned that clean energy on its own isn’t enough. “I think if these wind projects were more humane, and they weren’t using technology to generate wealth, then wind could be a way to mitigate global warming,” Sanchez said.

He said economic benefits should be shared with Indigenous communities. Further, there should be better planning. Companies are building wind farms “on very fertile land, and there’s no intention to set them up in the most appropriate places … there’s no control, they are just interested in hoarding land,” he said. “Our people have already given over so much of our land … and so often, in exchange for temporary work, and that’s inhumane.”

[Copyright, Reprinted with permission. Tamara Pearson is a journalist and writer living in Puebla, Mexico. She is the author of The Butterfly Prison. Her writings can be found at her blog and her Twitter is @pajaritaroja.]

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