The Pacific coast of the isthmus of Tehuantepec in the Mexican state of Oaxaca is an ideal place for a wind farm. But the projects put in place by the Mexican government, with the support of the World Bank, are provoking opposition from local people because they provide power for companies like Walmart without addressing energy poverty in one of the poorest states in Mexico.
Cheap energy for Wamart but little for local people
The Pacific coast of the isthmus of Tehuantepec, located in the Mexican state of Oaxaca, is one of the places in the world best endowed with wind resources. The International Finance Corporation (IFC) has described the region as “one of the most promising yet untapped areas for wind energy development in Latin America”, making the isthmus an ideal location for renewable energy generation. The unique natural features of the isthmus have attracted multiple investors to the region, who are competing with each other to get the best locations to set up wind farms, creating a sort of “wind rush”.
These new wind farm developments have caused confrontations with the local communities, who claim that, even though they will be directly affected by the construction of the wind farms, they have not been properly consulted. According to the Front of the Peoples of the isthmus in Defence of Land (Frente de Pueblos del Istmo en Defensa de la Tierra), they are not opposed to the idea of wind farming as such, but “against land grabbing by companies and against the impact that it will have on their life, culture and territory, due to the way in which the projects have been drawn up”.
Oaxaca is one of the poorest states in Mexico, with 67% of the population categorised as poor, 26.6% of whom live in extreme poverty. Almost all the rural inhabitants of the wind corridor areas are indigenous (Huaves or Zapotecos), some of whom do not even speak Spanish or are illiterate.
The World Bank has been seen as one of the key players in the expansion of wind power in the region. Under the “Large Scale Renewable Energy Development Project”, which the World Bank implements for the Global Environment Facility (GEF), it provides technical assistance to the Ministry of Energy (SENER), the Energy Regulatory Commission, the Ministry of Environment and Natural Resources (SEMARNAT) and the Federal Electricity Commissio, including assistance in planning and setting up future wind farm developments on the isthmus.
The first seven wind turbines were established in La Venta in 1994, producing 1,575 kW of electricity. Since then several other projects have been approved, including a $12.29 million loan investment in La Venta II wind project, approved by the World Bank’s Prototype Carbon Fund, and $25 million in grant funding for La Venta III, the first wind farm in the region built and run by a private wind power producer. Additional projects include La Mata and La Ventosa wind park, the first to be supported by the Clean Technology Fund’s private sector wind development project in Mexico, which has been operating since May 2010.
Local population is unhappy
These projects have been increasingly challenged by the local population. Energy companies and their agents have been accused of not seeking free, prior informed consent from the communities. Many of the contracts have been criticised for their lack of transparency, for not being understood by the local people, and for failing to offer compensation that is anything like commensurate to the profits the companies intend to make. As a result, the projects are being seen as an injustice and the cause of confusion, complaints and conflict. The Mexican government has also been accused of supporting the companies and doing little or nothing to protect the rights of local people.
The La Mata and La Ventosa wind park, in particular, has come in for strong criticism, because it offers cheap electricity to Walmart, but does nothing to address energy poverty in Oaxaca. The model was possible by exploiting a loophole in Mexico’s electricity “self-supply” laws, which allows corporate energy users to gain discount rates for electricity if they take a nominal stake in the private company that is generating the energy. The CTF intends to fund other projects using the same techniques, although this is likely to worsen yet further energy inequalities in the country.
The huge imbalances of economic and political power between multinational companies and small farmers have proved to be a formula for conflict and discontent, especially in the context of a country where political institutions are characterised by endemic corruption and the authoritarian exercise of power. The situation has been exacerbated in Oaxaca, where the people most directly affected by the wind farms are among Mexico’s poorest and most powerless communities.