Rolando Fuentes was invited to present a coauthored study in San Lázaro that proposes a new electricity subsidy strategy in response to nearshoring in Mexico.

By JOSÉ ÁNGEL DE LA PAZ | EGADE BUSINESS SCHOOL

"The exponential growth of solar power will change the world, not just the electricity sector," stated Rolando Fuentes, research professor at EGADE Business School - Tecnológico de Monterrey, citing a recent article in the The Economist, to the Energy Commission of the Chamber of Deputies.

The academic was invited to present a study he had coauthored on July 31 at the San Lázaro Legislative Palace. In it, he highlighted how the transition towards renewable energies, particularly PV solar, is redefining global economies and energy infrastructure.

"This type of technology can be implemented more rapidly in zones that are more likely to receive new investments, which is crucial in order to capitalize on the advantages of nearshoring."

In response to this global trend, Fuentes shared his study "Prices versus Quantities: Re-thinking Electricity Subsidies in the context of Nearshoring in Mexico", published by The Oxford Institute for Energy Studies.

The document proposes a shift from price-based to quantity-based electricity subsidies in Mexico.

He explained that this change would use distributed generation, especially PV solar, to address the increased demand produced by nearshoring in an efficient, sustainable manner.

Fuentes emphasized how the realignment of global value chains, particularly China to the United States, puts Mexico in a strategic position to attract foreign investment, reinforced by the technological advancements in the electricity sector of the past few decades.

Fuentes’ proposal seeks to capitalize on solar power's modularity and rapid implementation to respond to local needs and accelerate the expansion of electricity infrastructure.

He also suggested that complementing quantity-based subsidies with industrial initiatives could drive local solar panel production and foster employment and technological development.

Representative Manuel Rodríguez González, president of the Energy Commission, recognized that Fuentes’ contribution is significant for debate on energy reform in Mexico, highlighting his innovative proposals and their potential for improving electricity infrastructure in the country.