Chapter 4: Energy End-Use
rather than life-cycle costs, and the hiring of ESCOs, which are often involved in both the initial audit and project implementation, can be nearly impossible.10 Mexico also has very restrictive contracting policies at the federal and state levels, which prevent contracts from being awarded for more than one year (because of budget cycles and future obligations), thus limiting efficiency investments. After studying these issues in 2005, the U.S. Agency for International Development suggested that, rather than seek sweeping changes in procurement and budgeting policies, the government consider implementing a few pilots to test alternative approaches. Simplified ESCO contracts, which could be adjusted to fit one-year contract restrictions with simpler performance verification requirements, could be tested and, based on implementation experience, adjusted and replicated. As these bidding schemes become more accepted, an increased emphasis could be placed on bundling multiple public facilities together in order to scale up investments while reducing transaction costs. This effort could be complemented with a public revolving fund, perhaps on concessional terms, to improve the incentives for energyefficiency projects to be implemented. This experience would then allow more informed, comprehensive revisions of public policies to be considered.
Conclusions Mexico’s energy-efficiency, cogeneration, and renewable energy interventions in all stationary energy end-use sectors should be an important component of climate change mitigation policy. This has been clearly recognized in the National Strategy on Climate Change. Many of the MEDEC interventions represent accelerated or scaled-up activities that CONUEE, FIDE, and other agencies are already undertaking. The MEDEC interventions are mainly retrofit/renovations that involve replacement of existing equipment with new and more efficient ones. As Mexico’s electricity demand is projected to more than double by 2030, it is important that new equipment meets increasingly stringent energyperformance standards. In this regard, Mexico will benefit from the increasing harmonization of MEPS with the United States and Canada. Mexico would also benefit from a concerted effort to stop the inflow of old and inefficient equipment from the United States. In the rural sector, the dissemination of improved fuelwood cookstoves has significant greenhouse gas mitigation potential, with additional co-benefits. Energy-efficiency standards for buildings is an area in which Mexico can make significant progress. Doing so requires creating incentives for local governments to adopt and enforce the federal commercial building energy standard and introducing (preferably) mandatory energy-efficiency standards for residential buildings, at least in warm areas with high airconditioning demand. There is much potential for ESCOs in advancing Mexico’s energyefficiency agenda, especially in the industrial, commercial, and public sec-
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