Bart de Swart

INDIGENOUSPOWER

Renewable electricity and local sustainabilityin Mexico and South America

ISA Master Thesis

Bart de Swart

INDIGENOUS POWER

Renewable electricity and local sustainability in Mexico and South America

Master thesis for the degree of MSc. Globalisation and Latin American Development

Institute for the Study of the Americas (ISA), School of Advanced Study, University of London

Supervision by Graham Woodgate Date of submission 28 August 2012

Preface and acknowledgements

This dissertation partly results from a six month working placement and apprenticeship as

a secretary at the Group Science, Technology and Society (STS) of Utrecht University.

Inspired by the maturity of interdisciplinary research at this institute, I decided to embark

on an ambitious plan to combine an energy science approach with a social science

approach towards the themes described in this thesis. Aiming to become pop group

Queen's new lead guitarist might have been less of an ambitious goal, especially since I

am not trained in the field of energy science (moreover, many believe my guitar skills are

promising). However, since Sir Brian May managed to write an entire PhD thesis all the

while serving his Queen, this comparison might be just as irrelevant as comparing the

present dissertation with Hoffmann's master piece on a closely related topic (Hoffmann

2012).

I strongly believe, however, that both the subject of this thesis and the people involved

should be considered to be all but irrelevant. Therefore I would like to express my gratitude

and deep respect to Alán Monroy, Alejo Girón, Carlos Carbrera, Chelsea Mozen, Maribel

González, Samuel Herculano, Sergio Oceransky, Steph & Iván, and especially Vicente

Vásquez for their time and hospitality during and after my field trip to Mexico. Great thanks

to Aisha Elfring and Petra Ekdom and the other people at STS for their good advice and

company; to Benjamin Cok, Richard, Robert Coates, and Graham Woodgate for their

comments on initial research proposals; and to Pepijn van Kesteren who gave me some

crucial tips on how to get from 28.000 words to 15.000 words in less then 48 hours

(“simply delete every second word”). Last but not least I would like to thank Willemijn and

Maarten and my real parents for their support, patience, and hospitality, and Isha, to whom

I dedicate this piece of work, perhaps most aptly described as 'a teachable moment'.

Table of Contents

Preface and acknowledgements

1. Questions, aims and methods.........................................................................................12 . Theoretical framework.....................................................................................................53 . Current trends for power generation in Latin America and Mexico................................13 4 . Opposing wind in the Isthmus of Tehuantepec: A tilting at windmills?...........................2 65. Towards the first community-owned wind farm of Latin America ..................................4 2 6. Conclusions...................................................................................................................50

BibliographyAppendix: Land-lease contracts analysed for Table 4 .1

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CHAPTER 1

Questions, aims and methods

1.1. INTRODUCTION

An increasing amount of empirical evidence suggests that our planet is heating up in a

pace that is likely to have dire consequences around the globe, including sea level rise,

floods, desertification, extreme weather events, and, perhaps most significantly, drought

(Lovelock 2009). According to a study by the World Bank (2010), the region of Latin

America and the Caribbean (LAC) is likely to be severely hit by climate change, with

severe consequences for people and environment, the most important of which are

summarised in Table 1.1.

Table 1.1. Expected impacts of climate change in Latin America and the Caribbean

Area Description of impact Observed or expected consequence

Andes Disappearance of tropical glaciers

Water stress for people and hydroelectric dams

Caribbean Bleaching and decreasing of coral reefs

Decreases in marine biodiversity and tourism; decreased protection against tropical storms

Gulf of Mexico

Damage to wetlands Augmented vulnerability in the Gulf coast to hurricanes, which will increase in intensity and frequency

Amazon Large rain forest areas turning into savannah

Further changes in regional and global climate

Source: Author's elaboration based on a summary provided by World Bank (2010: 6)

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In 1988, the Intergovernmental Panel on Climate Change (IPCC) was founded after

scientists had discovered a link between human-induced carbon dioxide (CO2) emissions

and climate change. Reports of the IPCC have repeatedly suggested that human induced

emission of CO2 and other greenhouse gases (GHG) should be drastically scaled back in

order to mitigate climate change (cf IPCC 2007). One way to do this is to scale back the

use of fossil fuels for energy production and other economic activities. An additional

motivation for bringing down fossil fuel consumption is that reserves of oil, coal and gas

are finite, and diminishing1.

It is increasingly becoming clear that tackling this dual problem of climate change and

declining energy resources requires a global strategy of curbing carbon emissions through

a reduction in fossil fuel consumption. However, the widely documented correlation

between energy use and economic activity (cf Arbex & Perobelli 2010; Apergis et al. 2010)

suggests that compromising on economic growth could throw back millions into a situation

of poverty, especially in recently emerging economies in Africa, Latin America and South-

East Asia (Collier 2010). Moreover, governments and business emphasise that tempering

economic growth would cause political and financial instability.

It should be viewed in this context that discourses on sustainable development and

'clean' energy have come to dominate the global discussion on development and climate

change. Increasingly, these discourses are contributing to a widespread belief that through

technology and innovation it might be possible to cut carbon emissions while at the same

time alleviating poverty and sustaining economic growth. It is not my aim here to contribute

to the technical and economical debates on to what extent this idea is based on realistic

expectations. Rather, the aim of this dissertation is to show how discourses on sustainable

development and 'clean technology' have facilitated the promotion of development projects

1 While the exact time frame in which all reserves will be finished is subject to debate, this is expected to occur before the end of this century for oil and gas, and in the following century for coal (Shafiee & Topal 2009; Lior 2008; IEA 2006).

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that have not always been sustainable, especially related to local social and environmental

impacts.

The structure of the dissertation is as follows. First, mainly within the context of Latin

America, a modest but generalisable theory will be suggested in Chapter 2. The technical

and regulatory conditions for power generation from renewable energy (RE) sources in

general, and wind energy sources in particular, will be mapped out for Latin America and

Mexico in Chapter 3. Subsequently, Chapter 4 will assess the social impacts of

contemporary wind project in the Isthmus of Tehuantepec, and will try to identify factors

that have contributed (and are still contributing) to the current conflict situation between

companies and communities. Complementing the excellent work carried out by Hoffmann

(2012), Chapter 5 will explore to what extent a community owned wind farm (COWF) in

Mexico is likely to avoid the irregularities commonly associated with other wind projects in

the region. In Chapter 6, finally, the answers to my research questions (Table 1.1) will be

presented to arrive at some tentative conclusions.

Table 1.1 Research questions and corresponding chapters

N˚ Research question Chapter(s)

1 How should local socio-environmental externalities and conflicts resulting from RE projects in Latin America be contextualised, and what denominating factors can be identified that may lead to a generalisable theory?

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2 How is the use of RE for electric power generation in Mexico and Latin America to be contextualised, and what factors contributed to the recent growth of wind energy projects in Mexico?

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3 In what ways have wind energy projects been affecting local communities and their environment in the Isthmus of Tehuantepec? 4 and 5

4 To what extent can the community-owned wind farm in Ixtepec be expected to avoid the mistakes of its privately-owned counterparts? 5

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1.2. METHODOLOGY

The research for this dissertation has been carried out in two stages. The first stage

consisted of an intense, but obviously limited, retraining in the field of energy science2. In

the second stage, fieldwork was carried out in Mexico for a relatively short period (five

weeks). In this limited time frame, depth interviews were carried out with stakeholders in

and around Juchitán de Zaragoza and Ixtepec, and with representatives from the Yansa

Group in New York and London (see bibliography). Moreover, participant observation was

carried out in Ixtepec on several occasions by accompanying one of the members of the

indigenous governing body and his assistant in their daily activities. At the time of this

research, their main activity consisted of consultations with posesionarios (usufruct rights

holders), of the lands currently being considered for the COWF. Observation of this

process served to assess the extent to which the autonomy and rights to 'prior and

informed consent' of the posesionarios was respected. Finally, primary sources such as

land lease contracts, constitutional laws, and crude numbers on electricity generation, as

well as secondary sources have been consulted and analysed.

2 A six months working placement at the department of Science, Technology and Society at Utrecht University facilitated access to a great part of the consulted literature, most of which has been omitted from the bibliography since it has not directly been used for the dissertation

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CHAPTER 2

Theoretical framework

2.1. INTRODUCTION

The need to curb carbon emissions discussed in the previous chapter has had such

influential institutions as the World Bank applaud initiatives by countries such as Brazil–

among the fastest growing economies of the current decade and as such expected to

significantly increase energy consumptions patterns– to increase their electric capacity

through the construction of hydroelectric dams. For instance, a joint report of the Office of

the Chief Economist and the Sustainable Development Department of the Bank’s Latin

America and the Caribbean division made the following recommendation concerning the

LAC region:

“Continuing high-income growth–and the consequent growth in demand for electricity–will

require that LAC continue to rely on clean energy sources for a relatively large fraction of its

generation capacity. The most obvious way to do this is to develop more hydropower

generation, in which the Region has huge untapped potential.”

(De La Torre, Faijnzybler and Nash 2009: 57)

Hydroelectric dams are often promoted as a ‘sustainable’ source of energy because

virtually no waste is produced once a dam is operational, and CO2 emissions during the

dam's life cycle are low compared to most other sources of electricity. Moreover, since

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hydroelectric dams generate electricity from a RE source, they potentially contribute to a

secure supply of electricity. Finally, some technical advantages of hydroelectric dams

include their storage capacity and “quick response to sudden changes in demand”

(Tweidell & Weir 2006; Andrews & Jelly 2007; Batlle et al. 2010). However, it is

increasingly becoming clear that hydroelectric dams are not as ‘sustainable’ as is often

argued. As will be discussed in the following section, the building of large dams in Latin

America has often led to social displacement and loss of biodiversity and related economic

activities. This in turn means a loss in social, economic, cultural and biological diversity

arguably still not sufficiently valued in sustainability discourses. More importantly, it

completely goes against the main principle of sustainable development3.

2.2. BELO MONTE

Rarely had the friction between global discourses on sustainable development and the

unsustainable impact these discourses can have locally become so eminent as during the

2012 edition of the UN Earth Summit held in Rio de Janeiro. It was perhaps not so much

the conference itself that displayed this contrast, but the events that were occurring

simultaneously in relation to the building of a gigantic hydroelectric dam on the Xingu river

basin of the Brazilian Amazon. In what recalled images of James Cameron's epic movie

Avatar (2009), hundreds of indigenous people occupied the dam site, while in Rio mass

protests were held outside the conference.

The seriousness of the protesters' cause can hardly be overstated. Before completion,

set for 2015, the Belo Monte dam project will divert over eighty per cent of the Xingu river’s

natural flow, predicted to displace up to 40.000 people and to cause “substantial losses of

aquatic and terrestrial fauna” (Diamond & Poirier 2010: 26). Apart from local effects on

livelihoods, cultural diversity, and biodiversity, the project is expected to contribute to global

3 A much cited description by Brundlandt (1987: 54) holds that sustainable development “meets the needs of the present without compromising the ability of future generations to meet their own needs”

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climate change by clearing forest and emitting greenhouse gases, particularly methane

and CO24. Although currently less than eight per cent of the hydroelectric potential in the

Brazil’s Legal Amazon area has been developed (Caetano de Souza 2008: Table 1), at

least seventy more plants are planned (Verweij et al 2009).

The socio-environmental externalities that will likely result from the building of the dam

stand in sharp contrast to the expected benefits, at least locally. It could be argued that the

expansion of electric capacity might have positive effects on the population as well,

because local people may gain access to electricity, and, more generally, the addition of 11

GW to the grid might in theory have the effect of lowering consumer prices somewhat5.

However, as Fearnside (2006: 8) points out, most of the generated electricity will be used

for aluminium and alumina processing plants, largely owned by multinationals companies

(MNC)6 that, partly as a result of the highly energy intensive nature of the aluminium

industry “employ a minuscule workforce in Brazil”.

Unfortunately, externalities caused by dam projects are not confined to a specific place,

such as the Brazilian Amazon. For instance, as Lokey (2009) points out, the building of the

Chicoy dam in Guatemala, the Bayeno dam in Panama and the Río Cajon dam in

Honduras have caused similar, sometimes violent conflict, and these cases are not

isolated. Indeed, the surroundings of major river basins such as the Amazon river in

countries like Bolivia, Brazil, Colombia, Ecuador, Peru and Venezuela, the Bíobío river in

Chile, and the Usumacinta river in Mexico and Guatemala, are home to hundreds of

indigenous communities, whose livelihoods have been or are being threatened by

(planned) hydroelectric dams. Thus, while specific environmental, social and political

4 It is important to note here that the emission of 1 tonne methane contributes as much to global warming as 25 tonnes carbon dioxide (Demarty & Bastien 2011) 5 This might especially be relevant to the poorest section of society, for whom energy costs typically represent a large share of total expenses 6 In addition to the abundance of raw material (mainly bauxite) in the Amazon, many of these aluminium refining MNCs were attracted to Brazil by the high electricity subsidies granted to companies. For example, Turton (2002: 40) states that the Alumar Aluminum Smelter plant owned by the US based MNC Alcoa Inc, received its electricity for reduced prices that were “so low in 1997 that the State-owned utility Eletronorte subsidised Alumar to the tune of US$200 million”

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conditions of each case may differ, the displacement of local (indigenous) communities

and the negative impacts on their livelihoods caused by these dams appear to be a

recurrent phenomenon, at least in Latin America.

2.3. NCRE: A TECHNOLOGICAL FIX?

Many opponents of large hydro point to alternative sources of RE that could be harnessed

instead of large hydro, especially so-called non-conventional energy sources (NCRE) such

as wind and solar energy7. However, the problems caused by 'clean' energy development

described above do not seem to be restricted to a specific technology8. While for solar and

wind energy, no rivers need to be diverted, large-scale deployment of these technologies

may cause other or similar potential socio-environmental problems (Chapter 4). Despite

the fact that widespread large-scale deployment of these technologies is still only starting

to emerge in many countries, some NCRE projects have already caused conflicts in

various parts of the world. For instance, wind development has caused conflicts with local

communities in Chile, Mexico, Scotland, Spain, United States, and other places (cf

Pasqualetti 2011). Similarly, large scale solar power development, while still in its infancy,

has already created externalities and conflicts with local indigenous peoples, as currently

witnessed in the Californian Mojave Desert (cf Hunold & Leitner 2011; Helmore 2012). As

these technologies are becoming increasingly cost-effective, and are expected to become

cost-competitive with cheap sources of electricity in the course of the decade, the number

of conflicts in these sectors is likely to increase in coming years. So while opponents of

large hydro projects in culturally and environmentally sensitive areas are right to point to

7 There is a technical discussion beyond the aim ans scope of this dissertation on whether NCRE would indeed be capable of substituting for the planned hydroelectric capacity in some countries. Beyond this discussion, however, it should be acknowledged that the use of both wind and solar power for utility scale power generation is becoming increasingly common, not least because the improved cost-efficiency of NCRE projects as a result of learning (Junginger, Van Sark & Faaij 2010), economies of scale, and innovation. 8 Or, for that matter, 'dirty' energy development, as suggested by, for instance, experiences with oil and gas projects in the Amazon (Finer et al. 2008)

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the availability of alternative RE sources, the implicit assumption that a change in power

generation technology will solve the problem may at least be questioned9.

2.4. TOWARDS A GENERALISABLE THEORY

As discussed above, the general occurrence of local socio-environmental externalities

related to 'clean' energy development projects is not confined by place or type of

technology, although both may cause significant variations in the nature and intensity of

these externalities. What, then, might be identified as a common denominator of these

projects? While context specific factors undoubtedly play a role in many cases10, I would

argue that the following characteristics are crucial in the majority of cases: (1) local

communities are not informed, consulted, and engaged sufficiently prior to a project; (2)

local communities do not benefit directly from the energy produced or generated by the

project; and (3) in general environmental impact assessment carried out by companies

focus mainly on the 'clean' (low GHG emission) aspects of these projects, while

underestimating local impacts.

In essence, I argue, this is a consequence of the fact that in general, the main purpose

of this type of large scale RE projects is not that of creating positive (and avoiding

negative) local impact11. To be sure, these may be secondary goals; however, these will

always be subordinated to whatever the primary goal is, especially since the costs of these

projects are typically in the multi-billion dollar range, of which the majority has to be paid

up-front. Thus, because of the enormous amounts of money and financial risk that are

9 That said, these and similar statements should not be misread as an indirect celebration of nuclear power. The social and economic consequences of nuclear accidents as that of Chernobyl (1989) and Fukushima (2011) and other problems such as the underestimated and increasing GHG emissions of uranium mining (Mudd & Diesendorf 2010), among other things, suggest that nuclear power is all but free from socio-environmental externalities. See Simonian (1995) for socio-environmental impacts of the only active nuclear power plant in Mexico 10 For instance, case-specific factors in problems associated with wind energy in the Isthmus of Tehuantepec may include, but not be limited to, caciquismo (Oceransky 2008) and the importance of this region Isthmus as a major corridor for bird migration (see Chapter 4) 11 In contrast to, for instance, small scale RE projects aimed at reducing energy poverty

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involved, the principal goal of the companies and organisations behind the project is in

most cases to make the project succeed at the lowest costs possible, to maximise

revenues, and to minimise – and possibly externalise (Baker 2010)– financial risk.

This fact is exacerbated by an extremely narrow conceptualisation of costs and benefits.

The recent shift from ‘development’ to ‘sustainable development’ discourses that could be

noted in such influential institutions as the World Bank brought with it a promise of steering

the dominant discourse(s) towards more pluralist and inclusive views, and of stimulating

discussion about the end goals of development in relation to their means12.

In essence, it seems that an almost autistic13 focus on (fast) economic growth and

profit-maximisation has not been replaced, but complemented by other goals, mainly

aimed at mitigating climate change. Where the two come together, as is often the case in

RE projects, it becomes clear that the label of ‘sustainability’ can easily legitimate projects

that are in many aspects unsustainable. In this way, the co-option of ‘sustainable

development’ discourse by companies, governments and other organisations involved in

large-scale energy projects may well facilitate, rather than impede or modify development

projects that, due to a too narrowly defined conceptualisation of 'sustainability', cause

externalities and conflicts, as in the case studies described in chapter 2 and 4.

One solution to this problem is provided by post-development theorists14, and

indigenous and peasant movements, many of which argue for a total rejection of both

‘development' and ‘sustainable development’ discourses. From a theoretical point of view

12 Admittedly, in some international finance mechanisms, such as the REDD and the Clean Development Mechanism promoted by the UN, the meaning of costs and benefits has clearly been expanded to include environmental services. As yet, however, both the extent and scope of broadening the meaning of benefits and costs have been insufficient to speak of a paradigm shift 13 The use of the term 'autistic' in this context is partially inspired by the 'Post-autistic economics' movement that emerged in France at the close of the twentieth century (cf Fullbrook 2007). 14 Post-development theory emerged in the 1980s as a critical theory that, mainly focusing on Latin America (Ahorro 2008), combined Foucauldian discourse analysis with a wide variety of critiques on the functioning of dominant discourses on development. Rather than suggesting better ways of carrying out development, or criticising a specific method or theory, it questioned the very premises on which development theory was based. For a critical analysis of the post-development theory see, for example, Jan Nederveen Pieterse (2000) and Morse (2008)

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there is much to say for taking such a stance, especially in cases where local communities

and livelihoods are severely threatened by both of these discourses. From a pragmatic

perspective, however, an all too radical rejection of the concept of ‘sustainable

development’ might be little effective if no convincing alternative is provided to address the

urgent social and environmental problems facing current and future generations. To be

sure, some alternatives that have been proposed by Post-development theory and related

social movements, when implemented on a very large scale, might prove more effective in

curbing CO2 emissions and reducing rural poverty and migration than any other

proposal15. However, even in the unforeseeable scenario that these proposals are adopted

as widely as discourses on ‘sustainable development’ have been, and continue to be, their

impact might be limited to certain areas, both in the geographical and topical spheres.

In this light, and given the pretentiousness and widespread adoption of discourses on

‘sustainable development’, it seems to make more sense to use this very concept as a

vehicle for change. To take this theory beyond beautiful sounding words, I concretely

propose a critical embrace of two phenomena that have gained importance in recent

discourses on development: 'responsible investment' and 'social enterprise', and especially

the combination of the two. Admittedly, discourses on 'responsible investment' have been

often misused to promote investments that are irresponsible in many aspects, as

demonstrated, for instance, by the Mareñas project (Chapter 3 and 5). However, that does

not imply that the 'responsible investment' or 'sustainable banking' discourses that have

increasingly been gaining in importance over the last years, are entirely useless. On the

contrary: as Chapter 5 will try to demonstrate, 'responsible investment' criteria can help

social enterprises such as Yansa to attract low interest loans from ethical banks and

15 For instance, the international peasant organisation La Via Campesina claims that “peasant and indigenous agricultures (with integrated polycultures of perennial and annual plants together with livestock) can sequester and store huge amounts of carbon and thus cool the planet as well as feed the world” (Woodgate 2012)

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socially oriented investors that are ready to accept low financial returns on their

investments.

The concept of 'social enterprise' (an organisation designed to induce positive social

and/or environmental change through commercial activity) has equally been questioned,

especially by those who question the viability of such an entity in a market oriented world

(cf Bylund & Mondelli 2009). Moreover, as Hoffmann (2012) points out, there is a danger

that the people behind a social enterprise, in their determination to induce 'positive

change', unconsciously impose their values and beliefs upon the communities they are

working with16. In short, the most important risks of a social enterprise are related to (1) the

viability of a project when competing with market oriented companies and (2) unconscious

dominance in ownership and design of a project. However, if these risks can be overcome,

RE projects carried out by a social enterprise –financed by responsible investment

institutions and foundations– should in theory be able to avoid most, if not all, of the

problems caused by the companies carrying out 'sustainable development' through RE

projects in the Isthmus of Tehuantepec and other socially and environmentally vulnerable

areas.

16 This is similar to a phenomenon that has been all too often witnessed in (international) development projects and NGOs (cf Escobar 1988; Petras 1997)

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CHAPTER 3

Current trends for power generation in Latin America and Mexico

3.1. SECTOR REFORMS AND RENEWABLE ELECTRICITY

In the 1980s and early 1990s, countries in the LAC region were encouraged by global

development imperatives and structural adjustment policies dictated by international

financial institutions such as the World Bank to liberalise and unbundle their vertically

integrated, publicly owned, electricity utilities. As Dubash (2003) points out, by the early

1990s this was a common pattern throughout the developing and, for that matter,

industrialised world. For example, after the US in the 1970s had been one of the first

countries to allow private participation in its electricity sector, Chile and the UK –both icons

for neoliberal orthodoxy at the time– implemented even more rigorous reforms in the

following decade (ibid).

Liberalisation has generally led to the entry of independent power producers (IPPs) to

the market (Andrés et al. 2008), which some argue is a necessary factor for achieving a

successful transition to a low carbon economy17, although these assumptions might

17 For example, in trying to identify barriers to a fast and effective implementation of RE in Latin America, Lokey (2009) points towards the fact that many countries have not fully liberalised their electricity markets, which generally leads to state-owned companies or joint-ventures dominating the market, with little incentive to switch to more 'sustainable' forms of energy production. In addition, low levels of market liberalisation might prevent innovators from entering the market with 'technological learning' taking place regardless of what these innovators actually achieve (Miller 2009).

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especially apply to NCRE technologies such as solar, wind, tide and wave energy18. In

theory, then, the existence of a causal relation between privatisation of the electricity

generation sector and the use of RE and especially NCRE would implicate that countries

with high privatisation rates have higher shares of (NC)RE in their electricity generation

matrices than countries with low privatisation rates. It is clearly beyond the scope of this

paper to prove or disprove a statistical correlation between the use of RE sources and

private sector participation in the electricity sector. Nevertheless, an analysis of the energy

matrices for 15 countries in the LAC region and their shares of private sector

participation19 suggests that if anything can be said about factors that influence the use of

RE sources in the electricity sector in Latin America, it clearly does not depend on the

amount of private sector participation alone.

3.2. POWER GENERATION IN MEXICO

Contrary to the global and regional trend, Mexico kept liberalisation of its electricity sector

to a minimum during much of the XX century. Even today, the sector in essence still

consists of one vertically integrated public power utility, the Federal Electricity Commission

(CFE), which owns and controls the generation, transmission and delivery of grid-

connected electricity20. However, in 1992, the Law of Public Service of Electric Energy,

was approved, which opened up the sector somewhat by allowing IPPs to generate

electricity in Mexico. Nevertheless, this is only allowed in the case of self-supply,

independent production, small scale production, co-generation, and import and export, and

only under the conditions specified in this law (Mexico 2012a). The CFE thus remained the

18 In spite of being a source of RE, hydroelectricity is not a NCRE but a well-established technology, and historically has played an important part in the electricity matrices of many Latin American countries (Arango & Larsen 2010). 19 Because of the limited space available here, this analysis has been left out of the final version of this dissertation. 20 To be sure, until recently, that task was divided between the CFE and the Light and Power Company (Luz y Fuerza del Centro, LyFC), but the latter was liquidated in 2009 by presidential decree

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most important producer of electric power in Mexico and in 2008 still as little as 19 percent

of electricity generation was privately owned (Lokey 2009).

3.2.1. Brief overview of electricity sources

Over the course of the XX century, through a variety of constitutional laws and

amendments, Mexico had nationalised both its petroleum and electricity sectors (Randall

1989; Uri & Boyd 1997; Carreon-Rodriguez, Jimenez & Juan Rosellon 2007). In this

context, it should be of no surprise that for much of the past century electricity generation

in the country was dominated by oil (Figure 3.1). In 1997, the country generated three

quarters of its electricity with primarily refined oil, with residual fuel oil used for base load

and diesel for peak power and off-grid solutions (Uri & Boyd 1997). The relative

importance of oil diminished somewhat in the 1990s, while nuclear power, RE, coal and

gas gained importance, to varying extents. Following a global trend (IEA 2011d), by 2005

natural gas had established itself as an important player in the Mexican power generation

sector, a trend that is expected and proposed (SENER 2012) to continue in the following

decades. This scenario becomes even more likely21 if the country's enormous untapped

reserve of natural gas are considered, estimated to be the fourth largest in the world (EIA

2011; Rosenberg & Barrera 2011).

21 Some would applaud this development in light of global warming concerns. In the particular case of Mexican electricity generation, life cycle CO2 emissions of gas were found to be half that of heavy fuel oil and diesel, and even less than half that of coal (Santoyo-Castelazo et al. 2011). However, most of the gas found in Mexico is locked up in shale formations, which means it would have to be recovered through a method called hydraulic fracturing or fracking (EIA 2011). Fracking generally causes local environmental externalities (Groat & Grimshaw 2012) and increases the GHG “footprint” of natural gas to levels that surpass that of oil and coal (Howarth, Santoro & Ingraffea 2011: 679)

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Figure 3.1. Mexico – “Electricity generation by fuel”

a Source: IEA (2011c) Note: [a] includes geothermal, solar, wind, biofuels and waste

Figure 3.2. Mexico wind power growth 2005-2010

Source: GWEC (2010: 49)

2005 2006 2007 2008 2009 20100

100

200

300

400

500

600

3

85 85 85

202

519

Inst

alle

d c

apac

ity

(MW

)

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3.2.2. RE and NCRE

While RE has played an important role in Mexico's electricity generation matrix, this can be

contributed almost uniquely to the presence of large hydro. In 2011, Mexico's installed

hydroelectric capacity totalled 11,600 MW, of which all but 1 percent consisted of large

hydroelectric dams. Apart from hydroelectricity, RE sources have historically played a

surprisingly small role in the Mexican electricity generation sector. The underutilisation of

NCRE is especially noteworthy, certainly considering the country's vast and increasingly

well-documented geothermal, solar and wind resources.

For instance, with over 40 active and extinct volcanoes in its territory, only Indonesia

leaves Mexico behind in terms of geothermal potential (DOE 2002). Still, in 2009, installed

geothermal capacity accounted for less than 12 percent of the estimated potential of at

least 8,000 MWe (IGA 2011; DOE 2002). Even more surprising is the “underutilisation” of

Mexico's solar resource (Sanchez-Juarez cited in Navarro 2012). Although the nation's

significant amounts of solar radiation have been acknowledged and studied for decades

(Almanza & López 1978; Galindo, Castro & Valdes 1991), comprehensive studies mapping

the potential for electricity production from solar energy have been elaborated carried out

more recently. These studies unanimously show high irradiation factors for Mexico, with a

nationwide average of 5 kW·day-1·m-2 and in some parts of the country surpassing 6

kW·day-1·m-2 (NREL 2003). These values are higher than in some of the countries that

have been leading the solar power market in the first decade of the new century, such as

Germany, Spain and the USA. Still, the entire output of solar PV installations was as little

as 18 MW in 2004 (Barnés 2006). Useful wind resources are also available in various parts

of Mexico. Again, potential seems to be underexploited: only 3 MW of installed capacity

was recorded in 2005 (GWEC 2010: 49). However, in the case of wind energy, something

remarkable must have occurred, because in 2010, installed capacity had increased with

173 percent, making for an average annual growth rate of almost 35 percent (figure 3.2).

18

3.2.3. Explaining the sudden rise of wind energy in Mexico

What explains this sudden and steep expansion of installed wind power capacity in the

second half of the first decade? While other factors may have played a role, five factors

that are especially noteworthy will be briefly discussed in the remainder of this chapter.

The first –and, arguably, most important– factor is economical. The costs of wind power

have fallen significantly in recent decades, mostly due to a phenomenon that economist

have called technological change. In short, this implies that due to a variety of factors,

innovative technologies become both cheaper and better over time (Junginger, Van Sark &

Faaij 2010). In the case of RE technologies, this mostly translates in an improved cost-

efficiency: a lower cost per watt produced. This is especially relevant in the Mexican

electricity market because federal electricity company CFE is constitutionally bound to buy

electricity at the lowest cost. Relative costs compared to other energy sources have also

fallen, mainly because of rising oil prices both on the domestic and international

markets22.

A second factor, closely related to the first, is resource availability and the availability of

accurate data to this respect. Certain areas in Mexico have conditions that are among the

best for wind energy development worldwide, making wind power cheaper than most other

sources of electricity in Mexico (Oceransky 2012). However, as Wood (2010) points out,

only in recent decades have the country’s excellent wind resources fully been appreciated.

Whereas in 2003, Mexico’s wind energy potential was estimated to be 5 GW, “research

and new technologies, as well as a heightened national and international interest in the

sector has meant a steady upwards revision of these estimates”, ranging between 9 and

40 GW (ibid: 23). In 2010, these numbers again turned out to underestimate the country’s

potential in wind power capacity, which was estimated in a new study at 71 GW. For

22 For example, Uri and Boyd (1997) explain how Mexico’s dependence on oil has contributed not only to higher carbon emissions per unit of GDP than most other countries, but also to a sharp increase in electricity prices starting in the early 1990s

19

comparison, this number represents a potential capacity that is “40 percent more than the

nation's entire installed electricity-generating capacity, including coal, gas, and hydro

power” (Vance 2012).

These advancements in wind resource intelligence were facilitated by the 'Action plan

to eliminate barriers to the large scale implementation of wind energy in Mexico', initiated

in 2003 and executed by the Mexican Institute of Electrical Investigation (IIE). The plan,

with estimated projects costs totalling nearly $ 12 billion USD, is partly financed by the

Global Environment Facility of the United Nations Development Programme (UNDP), and

co-financed with “contributions from Federal Institutions, State Governments, and the

private sector” (UNDP-GEF n.d.: 1). The plan resulted, among other things, in the building

of of several wind measurement stations and a regional wind technology centre in the

Isthmus of Tehuantepec, one of the most promising areas for wind energy development

(chapter 4).

A third factor consists of a series of government programmes and laws which some

way or another have contributed to a more favourable climate for NCRE. For instance, the

1992 Law of Public Service of Electric Energy discussed earlier (3.2.1) made it possible for

private (wind) energy companies to play a role in Mexico's electricity market. Moreover, in

2008 the Law for the use of renewable energy and the financing of the energy transition

was introduced in order to

“regulate the use of renewable energy sources and clean technologies to generate electricity

with purposes other than the public service provision of electrical energy, as well as establish

the national strategy and the instruments for the finance of the energy transition”

(Mexico 2008: 1).

20

Furthermore, according to the Special Programme on Climate Change 2009-2012, 50.65

MtCO2e would have to be mitigated by 2012, 19.36 MtCO2e of which was estimated to be

mitigated by “projects for self-supply of electric energy with renewable sources” (ibid: x).

These ambitions were made binding in June 2012, when Mexico passed the General

Climate Change Law, which had adopted, among other things, the aspiration to reduce

GHG emissions by 50 per cent in 2050 (taking 2000 as a base year) from the Special

Programme on Climate Change 2009-2012.

A fourth factor that may have facilitated the growth of wind power projects in Mexico is

related to multilateral agreements and regional development plans such as the Plan

Puebla Panama (PPP), an ambitious strategy initially proposed in 200123 with the goal to

“link Central America's energy industry and highways and develop its commercial

capabilities” (Stenzel 2006:557). Apart from the improvement of general infrastructure

benefiting wind projects, the plan helps to justify expansion of wind power capacity through

its Electric Integration System for Central America (SIEPAC), especially in the Isthmus of

Tehuantepec, as Cruz Rueda points out.

“The wind energy megaproject [in the Isthmus of Tehuantepec] denominated ‘clean electric

energy’ is promoted as having the purpose of meeting the energy needs of the states Oaxaca,

Veracruz, Tabasco, Campeche and Yucatán by the year 2020. But in reality it is obsolete,

because the demand can be covered with the currently existing production. Therefore, the

government changes its discourse and promotes the idea of selling generated power to Central

America (through SIEPAC) and to the United States.”

(Cruz Rueda 2011: 264, my translation)

23 In 2008, the PPP was denominated Mesoamerican Integration and Development Project, commonly called Mesoamerica Project

21

In addition, private sector participation in electricity generation for self-supply, which had

become possible since the 1992 reform of the energy law (see above), was further

facilitated by the signing of the North American Free Trade Agreement (NAFTA), which

states that “[...] an enterprise may aquire [sic], establish, an/or operate an electricity

generating facility in Mexico to meet the enterprise's own supply needs” (NAFTA section 6

quoted in USAID 2009).

A fifth factor that has contributed to the boom in wind energy investment in Mexico is

related to the way discourses on 'sustainable development' have penetrated international

development institutions to promote so-called 'clean' development. The most famous

example is perhaps the United Nation's Clean Development Mechanism (CDM) that

provided financial assistance to wind energy projects such as La Venta II, Eurus, Bii Nee

Stipa (I & II), Parques Ecológicos de México, and Piedra Larga. Moreover, in addition to

receiving funds from the CDM the La Mata and La Ventosa wind farm was partly financed

by the Clean Technology Fund of the World Bank (Reyes 2011: 4).

Finally, in a less official way, investment in wind projects helped institutional investors

and multinationals to nominally allocate part of their investment portfolio to 'sustainable

development' projects and meet Environmental, Social and Corporate Governance (ESG)

criteria. For example, the financial stakes in the controversial Mareña Renovables project

are divided among Dutch pension fund PGGM, Australian investment group Macquarie,

Mitsubishi of Japan and Mexican multinational FEMSA. According to PGGM's head

infrastructure, the fund's significant stake in the project “is completely in line with the ESG

criteria in the investment policy of our clients”. Similarly, a description of PGGM's

investment policy states that “[b]ecause PGGM sees no incompatibility between financial

and social return, we look for investments on behalf of our client in companies which pay

due regard to ESG [...] factors” (PGGM, n.d.). However, as we will see in the following

chapter, the current controversies over the Mareñas project are clearly at odds with such

22

statements.

3.2.4. Wind power in the Isthmus of Tehuantepec

Some of the best locations for wind energy development in the world are located in the

Mexican state Oaxaca (figure 3.3).

Figure 3.3. ‘Oaxaca – Wind Resource Map’

Source: NREL (2003: Figure 6-1)

As can be derived from Figure 3.3 and 3.4, the area with best quality wind resources

roughly coincides with the ethnically diverse region of the Isthmus of Tehuantepec (figure

3.4). As pointed out in Chapter 3, utility scale wind energy development in Mexico and its

Isthmus is a relatively recent phenomenon. In the early 1990s, a pilot wind farm was built

by CFE in La Venta, a small locality belonging to the municipality of Juchitán. The pilot

project, called La Venta I, consisted of a 7 turbines with a capacity of 225 W each, so that

a total capacity of 1,58 MW was reached (Henestroza-Orozco 2008). Technically, the

23

project could be called a great success: the first year, the capacity factor of the power plant

reached 50 per cent, to average a still impressive 40 percent in following years (Cardenas

Tovar & Saldívar Urquiza 2007). The Global Wind Energy Council states that, because

capacity factors in the Isthmus are typically “in the range of 40%, a total of 10 GW could be

developed in this region alone” (GWEC 2011). These promising technical conditions, in

combination with the factors identified in the previous chapter, have led to a spectacular

growth in wind energy projects in the region, especially in recent years (see Table 3.1). In

addition to the completed wind farms showed in Table 3.1, many more projects have been

planned.

Figure 3.4. 'Ethnicities of the Isthmus of Tehuantepec' S

o

u

r

c

e

:

V

i

l

l

a

g

ó

m

e

z

Source : Villagómez Velázquez (2004: Figure 1)

25

As can be derived from Table 3.1, the majority of developers and end-users of wind

power are (multinational) for-profit corporations or their Mexican subsidiaries, except for

CFE. As discussed in the previous chapter, the principal purpose around which each of

these corporations are structured is making profit; in a similar vein, the primary function of

CFE is the provision of electricity as a public service. In both cases, energy generation is

only a means to this goal. Moreover, a narrow focus on economic well-being and global

sustainability implies that the local impacts of their activities are subordinated to these

companies’ raison de être. As will be shown in the following chapter, this has created a

situation that is incompatible with the idea of 'sustainable development' that has often

helped funding these projects.

Tabl

e 3

.1. W

ind

pow

er

deve

lop

men

t in

the

Isth

mus

of

Tehu

ante

pec:

pro

ject

s op

era

tiona

l or

due

in 2

012

Ethnic region

Sit

e l

oc

ati

on

Pro

jec

t n

am

e

Capacity (MW) P

rin

cip

al

de

velo

pe

r(s

)

Operational

Pri

nc

ipa

l o

ff-t

ak

er(

s)

ZAPOTEC

El E

spin

alB

ii N

ee

Stip

a26

.4G

ames

a in

coo

pera

tion

with

C

ISA

(w

ind

farm

bou

ght

in 2

012

by

Ibe

rdro

la)

20

09C

oca-

Col

a F

EM

SA

La M

ata,

La

Ven

tosa

O

axac

a I L

a M

ata-

La

Ven

tosa

67.5

Ele

ctric

a de

l Va

lle d

e M

éxic

o

(Ele

ctric

ité d

e F

ranc

e E

nerg

ies

No

uvel

les)

2010

Wal

mar

t de

Méx

ico

La V

ent

a

La V

enta

La V

enta

I1.

58C

FE

1994

CF

ELa

Ven

ta II

83.3

Gam

esa

2007

Eur

us

1st p

hase

37

.5A

ccio

na E

nerg

ía M

éxic

o

Acc

iona

2009

CE

ME

X

2nd p

hase

212.

5 A

ccio

na 2

010

Oax

aca

II, II

I, IV

306

Acc

iona

2012

CF

E

La V

ento

sa

La V

ento

sa W

ind

Pro

ject

/ P

arqu

es e

coló

gic

os d

e M

exic

o79

.9P

arqu

es e

coló

gico

s de

Mex

ico

(Ibe

rdro

la)

2009

CE

ME

X

Bii

Ne

e S

tipa

II74

Ene

l Gre

en P

ow

er20

12C

FE

San

to D

omin

go

Inge

nio

La V

enta

III

103

Iber

drol

a20

12

Un

ion

Hid

algo

Pie

dra

Lar

ga (

1st p

hase

)90

.0D

emex

(R

eno

valia

)20

12G

rupo

Bim

bo,

Ca

lidra

, F

rials

a,

Mus

eo P

apa

lote

S

ou

rce

: A

uth

or’

s e

labo

ratio

n

26

Chapter 4

Opposing wind in the Isthmus of

Tehuantepec: A tilting at windmills?

4.1. INTRODUCTION

The state of Oaxaca is arguably one of the regions in Mexico where indigenous cultures

have been best preserved (Yannakakis 2008: x). Perhaps one of the most articulated

indicators for this preservation of indigenous culture is the extent to which indigenous

languages are still being spoken. According to data for 2005, more people speak one or

more indigenous languages in Oaxaca than in any other Mexican state (INEGI 2009). An

analysis of data provided by INEGI (2009) reveals that at least 30 different indigenous

languages are spoken by nearly a third of the population of Oaxaca state; of this group,

over 14 per cent speaks no Spanish whatsoever.

Special rights for indigenous peoples have been acknowledged in Mexican federal and

state constitutions, and through the signing of various declarations. For instance, Mexico

was one of the first countries to ratify ILO Convention 169, which explicitly states that

indigenous and tribal peoples

“shall have the right to decide their own priorities for the process of development as it

affects their lives, beliefs, institutions and spiritual well-being and the lands they occupy or

otherwise use [...]. In addition, they shall participate in the formulation, implementation and

evaluation of plans and programmes for national and regional development which may

affect them directly.

27

(ILO 1989: article 7-1)

Moreover, Article 2 of the Mexican Constitution holds that it “recognises and guarantees

the right of indigenous peoples and communities to self-determination and, consequently,

autonomy” (Mexico 2012a: 2). Beyond constitutional limitations24 Article 2 is relatively

straightforward, especially regarding indigenous self-determination to “conserve and

improve [their] habitat and preserve the integrity of their lands” (Mexico 2012a: 2). Finally,

Mexico has signed the UN Declaration on the Rights of Indigenous Peoples introduced in

2007. As will be shown in the following sections, the process of consultation prior to most

wind energy projects in the Isthmus has been insufficient, if at all existent.

4.2. PRIOR AND INFORMED CONSENT

In many cases, the first time communities were approached by energy companies or

subcontracted intermediaries was to obtain permission for leasing the lands. According to

Gonzáles Pedro, this is clearly what is meant by 'prior and informed consent' or similar

formulations in various indigenous rights declarations:

“[The] process of consultation needs to be with all the adequate information. [The

companies] need to demonstrate all the environmental impact assessments, they need to

show how they will affect the lands, […] the amount of turbines, their size, how much

energy they will produce, the importance it has for our region […].”

Gonzáles Pedro (2012)

24 As argued by Hall (2005), the act of formally recognising indigenous rights also provides the recognising party with the power to define and even delimit these rights. In effect, the Mexican Constitution does set out a set of conditions and restrictions that delimit indigenous autonomy. However, in essence these limitations appear to be formulated to protect the Constitution itself –rather than the “neoliberal project”, as Hall suggests– from being undermined

28

Part of this information, especially related to environmental impacts, is presented in the

Environmental Impact Manifests (MIA) that companies need to present to the Secretary of

Environment and Natural Resources (SEMARNAT) in order to have approved their

projects. However, as González Pedro (2012) explains, “in general, none of the companies

has prepared an environmental impact assessment before the [land lease] contracts are

signed”. Moreover, as will be discussed in section 4.6, there is a tendency for MIAs to

underestimate negative environmental impacts (Grosselet 2012; Monroy 2012; González

Pedro 2012).

4.3. LAND LEASE CONTRACTS

Wind energy companies in the Isthmus lease the land on which they build their wind farms,

instead of buying it. Wind farms need a relatively extensive land area, principally because

the space between modern wind turbines in a row needs to be some 250 meters, and the

space between two rows of turbines about half a kilometre (CANWEA 2006). In other

words, while in most cases large tracks of land are needed to build a wind farm, most of

that area solely serves the space between turbines and thus can still be used for other

purposes such as farming and grazing, especially when construction has finished (at least

in theory25). Since in many cases the lands with the best wind resources are found in rural

areas, buying instead of leasing land could unnecessarily interfere with other uses,

principally farming and grazing. As will be discussed below, however, the principal reason

for companies to prefer lease contracts over buying land is most probably related to

financial concerns.

An additional reason companies in the Isthmus lease instead of buying land is the

complex regulation of land ownership in Mexico that can be traced back to the Mexican

25 As later sections in this chapter will make clear, the conditions for this theory to become fully applicable in practice have not always been met in the wind projects discussed in this case study

29

Revolution (1910-1917). Through a process of drastic land reform starting in 1914,

thousands of indigenous communities were issued communal property rights through the

establishment of comunidades agrarias, whereas ejido landholding structures were

generally allocated to non-indigenous26 peasant communities (Smith et al. 2009). In line

with other neoliberal policies promoted by the Washington Consensus, land markets were

opened up somewhat in the early 1990s, especially through the reformulation of Article 27

and the Agrarian Law in 1992, and through the Certification Programme of Ejidal Rights

and Titling of Urban Lots (PROCEDE). Nonetheless, although land leasing and renting

significantly augmented after these counter-reforms, the same was not true for the sale of

ejidal and communal lands (Assies 2008). One of the reasons for this is that PROCEDE,

the certification programme that would facilitate such a privatisation process, advanced

slower than expected. This has especially been the case in Oaxaca, where over three

quarters of total surface area is compromised by ejidal and communal lands (Secretaría de

la Reforma Agraria 2012a).

4.3.1. Landholder consultation

From the perspective of energy companies, protests from local landholders against wind

energy development in the Isthmus are all too often dismissed as a conscious strategy to

get more money, certainly because protests usually began after the contracts were signed.

However, an increasing bulk of evidence is supporting claims made by landholders,

indigenous/human rights defenders and others, that in many wind projects land lease

contracts were obtained through a process that was full of “irregularities” (Manzo 2011:

391).

In the early years of wind development in the Isthmus, landholders had little idea what a

26 Admittedly, this categorisation into indigenous and non-indigenous has not been straightforward, and probably could not have been, not least because of the theoretical and practical complexities inherent to indigenous (self)identification processes in particular (Weaver 2001), and to concepts as ethnicity, indigenous identity and mestizaje in general (Banks 1996; Rubin 1997; Da Silva 2012)

30

wind farm would look like27. As Vance (2012) explains, some landholders had “meetings

with developers in which model windmills the size of dinner platters were shown” and after

having signed contracts “were shocked to see 15-to-20-story turbines rise across acres of

their land”. The fact that CFE and other companies developing wind projects in the region

have subcontracted intermediaries to obtain the land lease contracts, might have facilitated

this process (Manzo 2011). A notorious example is Maderas y Granos, according to

Sanchez (2007) “a cover name for this speculation company whose representatives go

around trying to arrange contracts […], all while saying that they work for the government”.

A point in case here is the La Venta wind farm, as a publicly funded study reveals:

“[T]he ejidatarios that leased their lands did that initially to companies that apparently offered

productive projects like that of SEDESOL, such as Maderas y Granos […], which afterwards

sold the contracts to other companies that had won bids for the construction and operation of

wind farm; this process makes [the landholders] feel betrayed.”

(Ciesas, n.d: 105)

A similar example can be found the village of Xadani where, in 2006, “the company men

made it sound like a government aid program, and […] many small landowners signed up

even though they couldn't read the contracts” (Hawley 2009).

In Unión Hidalgo, landholders were approached on an individual basis by

“representatives” of the Piedra Larga project, who after landholders had agreed to signing

a contract “returned with the 'official' copies of the contracts [in which] many key terms had

been changed, endless clauses added, and the term of the lease had been changed from

twenty to thirty years” (Sanchez 2007). While some landholders were wisely opted out

before the definitive signing of the Piedra Larga contract (Díaz 2012), many did not fully

27 In recent years, this can be expected to have changed somewhat due to the the increased visibility of wind turbines in the region, as well as information diffusion through indigenous and human rights groups

31

understand what had happened and signed the contracts anyway, reportedly under

pressure of the intermediaries and their notaries (Sanchez 2007). In a similar vein, Girón

and Beas Torres (2010) account how Maderos y Granos was charged with the landholder

'consultation' for the Eurus wind project, during which some plots were reportedly seized

while no contract had been signed. In most cases, however, Maderos y Granos reportedly

manipulated landholders into signing lease contracts, and since no copy was provided,

conditions could be –and were– easily changed afterwards (ibid).

In addition, the CFE and multinationals have allegedly obtained land lease contracts

illegally through local and regional leaders and caciques28, who received a commission per

signed contract (Oceransky 2009). For example, although a court case related to these

allegations has as yet been undecided, the then president of the Commission of Ejidal

Goods of La Venta allegedly bypassed consultation procedures with the ejido council to

negotiate land deals directly with CFE, receiving significant payments in return (Oceransky

2008; Girón 2012). According to some sources, this process has been companied by

forging signatures of people who were openly against the project, migrants working

abroad, and people that had already died (Girón 2012; González Pedro 2012).

Finally, translation of the contract terms in indigenous languages has been often

selective and sometimes absent in cases where landholders did not speak Spanish, and

contracts were not read fully to illiterate farmers (Oceransky 2009). For illustration, it

should suffice to mention that in La La Venta, more than three quarters of the population is

illiterate (Girón 2012). This fact, in combination with the workings of caciquismo may also

partly explain the fact that an order from Ulises Ruiz —then governor of Oaxaca for the

Institutional Revolutionary Party (PRI)— to sign land lease contracts addressed to the PRI

28 As can be concluded from contemporary works on caciquismo, the exact use and meaning of the term cacique continues to be subject to academic debate (cf Knight & Pansters 2006). Originally, the term was an “Awrak term denoting a chief […]; in colonial Mexico, caciques were indigenous rulers” however, from the nineteenth century the term was “detached from its indigenous roots and came to denote a form of political boss, mediator or broker” (Knight 2006: 10).

32

dominated La Venta ejido “was blindly obeyed by a high percentage of the population”

(Oceransky 2009: 209).

4.3.2. Financial structure and transparency of land lease payments

One reason companies might prefer to lease land instead of buying it, is that the

acquisition of large lands areas needed for a wind projects would significantly increase up-

front costs, already taking up the greatest share of total project costs for RE. Lease

mechanisms, on the other hand, allow for spreading the costs more evenly over the

lifetime of a wind farm, typically twenty to thirty years. Moreover, unlike in the case of

instalment sale agreements, the financial structure of lease contracts can be designed in a

way that makes leasing a more cost-effective option and lowers financial risks. In the

contracts reviewed for this section (see Table 4.1), the greatest share of payments is

allocated to landholders whose lands are directly affected by power generation equipment

and related infrastructure. In a similar vein, Table 4.1 shows that payments structures are

generally differentiated by two phases: the pre-operational phase, which can take up

several years and in which the technical assessments, environmental assessment,

planning and construction are carried out; and the operational phase, which can usually

last between 20 and 30 years, depending on the contract.

Another way landholders are financially compensated is through royalties payments.

This could be perceived as a sympathetic gesture of sharing part of the project revenues

or as a conscious company strategy to externalise financial risk29. What is clear is that, by

making part of the payments directly dependent upon project revenues, energy companies

can mitigate financial risk while at the same time increasing landholders' engagement in

the project and their sense of responsibility for the project to succeed. The last column of

Table 4.1 shows that in the reviewed contracts, the royalties landholders receive are

29 For a detailed elaboration on the externalisation of risk in wind projects in the region see Baker (2011)

33

calculated by dividing a share of gross revenue (typically 1-1.5 percent) by either the total

surface area or by the total amount of landholders. However, as Oceransky (2010) points

out, many wind projects in the region are developed by large consortia consisting of a

power producer and the final power consumer; consequently “since the pricing policy

within the consortia is internal, the consortia could establish the value on an arbitrary

basis” (ibid: 618).

In any case, while a detailed comparative analysis of land lease payments is beyond

the scope of this thesis, several authors (Pasqualetti 2011; Vance 2012; Girón 2012) have

calculated payments to be significantly lower than in other places in the world that have

similar wind resources, although there seems to be little agreement on the exact amounts.

According to Vance (2012), small landholders in La Venta have been paid “a third to a

sixth” of what farmers receive in south east Wyoming. Girón (2012) holds that according to

his calculations based on company figures, landholders in La Venta have been paid up to

twelve times less in terms of revenue share than their counterparts in other countries.

Arguably, the underpayment of farmers has been facilitated by the disadvantaged

position of landholders in the Isthmus (Baker 2011; Oceransky 2009). Soon after the

exceptional quality of wind resources in the Isthmus had been mapped out by experts in

the first decade of the new century, “a group of primarily Spanish and French companies

[…] moved quickly to identify a strategy that would effectively divide El Istmo into

development parcels to serve as individual sites for wind projects” (Baker 2011: 280). As

Oceransky (2009) points out, this strategy has prevented competition between companies

over the same land parcels. Consequently, each company gained a monopsony30 position

in the land negotiation processes, allowing contract terms to be dictated entirely by the

30 Similar to a monopoly, where the market is dominated by one supplier, a monopsony implies a situation where many suppliers are dependent on one buyer. Although in this case the transactions are based on lease contracts rather than instalment sale agreements, I still consider the use of the word monopsony adequate in this context.

34

companies31.

31 Exponential increases in land lease offers, which cannot realistically be attributed to other factors, seem to support this assumption (Oceransky 2009).

Tabl

e 4

.1.

Fin

anci

al s

truc

ture

of l

and

use

pay

men

ts (

in M

XN

) by

to w

ind

pow

er c

ompa

nies

: se

lect

leas

e c

ontr

acts

Co

mp

any

and

lo

calit

y

Pre

-op

erat

ion

al p

has

e O

per

atio

nal

ph

ase

Lum

p su

m

paym

ent

Fix

ed a

nnua

lfe

e pe

r ha

Fix

ed a

nnu

al

fee

per

turb

ine

Fix

ed

annu

al

fee

per

ha

Fix

ed a

nnua

l fe

e pe

rtu

rbin

e

Roy

altie

s

(R)

a

Un

ión

F

eno

saJu

chitá

n de

Z

arag

oza

1.00

015

04.

000

N/A

N/A

1.A

ll la

ndh

olde

rs in

pro

ject

are

a:

R =

(0,0

10

GR

a)

2.La

ndho

lder

s w

hos

e pl

ots

are

affe

cted

by

the

win

d fa

rm (

by

turb

ines

, ac

cess

roa

d, c

able

s,

etc.

)

R =

(0,0

10

GR

a)

+ 0

,002

GR

3.La

ndho

lder

s w

ith a

t le

ast

one

turb

ine

on

thei

r pl

ot:

R =

(0,0

10

GR

a)

+ 0

,005

GR

DE

ME

XU

nio

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36

4.4. IMPACTS ON ARGICULTURE

As pointed out earlier, the presence of wind power equipment should in theory not

significantly reduce possibilities for agricultural uses of the land, and companies rightly

point out that many disruptions caused by construction are temporary32 and mainly

restricted to the construction period. However, there are concerns among landholders that

not all modifications might be temporary. In La Venta and La Ventosa, for instance, altitude

levels of lands in irrigation zones have been modified in order to construct access roads,

which may compromise agricultural productivity because in the period of heavy rains, “part

of the parcel gets filled with water, so [...], the harvest, many harvests, are lost” (Gonzáles

Pedro 2012). However, according to Oceransky, these impacts occur mostly in irrigated

areas and could have easily been prevented, especially in the case of La Venta II, “where

they did it very badly”.

“It is possible to build wind farms without affecting in this way. They just did not give it

priority. There is no need to augment [the level of] roads. It depends on how you design

them. And if there is any part where you need to augment levels, you can create drains,

based on calculations”.

(Oceransky 2012)

Moreover, while the surface area taken up by the turbine foundation is relatively small33,

farmers fear that the estimated 1500 ton “blocks of concrete that make up each turbine's

32 As Brian (2010) points out, in most cases, the 'local jobs' these companies usually promise are usually equally 'temporary', apparently closely related to this construction period. After this period, maintenance jobs can be filled by a handful of specialists, commonly from outside the region (Vance 2012). At the La Venta wind farm, for example, only 5 persons are currently being employed for maintenance (Girón 2012). Moreover, wind farm labourers have repeatedly put construction on a hold because of unacceptable working conditions and payment uncertainties. 33 According to BP (2012), the surface area taken up by the base of one turbine including the access road is typically between 0,3 and 0,4 hectare.

37

foundation will hinder the natural flow and drainage of water, causing their crops to be

flooded” (Brian 2010; Manzo 2011; González Pedro 2012).

A final issue related to agricultural impacts is that, after a land lease contract has been

signed, the land becomes automatically “fixed” (González Pedro 2012). In practice this

implies that farmers with a type of land right that previously allowed them to use their piece

of land as collateral for small agricultural loans (commonly used to buy seeds and

fertilizers) are no longer able to do so. According to González Pedro, this is not explicitly

communicated to landholders and contract details on this clause are usually limited to

ambiguous statements on the ample usufruct rights granted the company, articulated in

“technical juridical language” (ibid). Consequently, farmers often do not become aware of

this term until asking for a loan at their bank, usually provided on a yearly basis (ibid).

4.5 ENVIRONMENTAL IMPACTS

As pointed out earlier, prior to each project, companies need to prepare a MIA in which the

expected environmental impact of the project is assessed. However, there are many

reasons to assume that negative environmental impacts are generally underestimated in

the MIAs (Grosselet 2012; Monroy 2012; González Pedro 2012).

First, the MIAs consider the impact of individual projects as if they were isolated, rather

than being part of an increasingly large scale scale project concentrated in a limited

geographical space (Manzo 2011; González Pedro 2012). As Manzo (2011: 397) explains,

“this situation […] ‘favours’ the approval of the projects […]”. Another implication of this is

that the potential of mitigation efforts is overestimated, especially concerning the effects on

local and migrating bird and bat populations (González Pedro 2012). Secondly, MIAs are

based on a project design that often changes afterwards. For example, in the case of La

Venta II, the amount of turbines that was eventually placed exceeded the amount on which

the MIA was based by over 16 percent (Manzo 2011: 399). A third factor that may

38

contribute to the underestimation of negative impacts of the projects is that companies pay

researchers not to publish their findings (Grosselet 2012; Monroy 2012). Leaving aside

any speculations about the companies’ possible influence on how data is presented, this

lack of transparency may well impede wider possibilities of peer review and cross-

verification that can filter out questionable methodology as well as flawed data-

interpretation34.

One area in which all the the above mentioned factors can be discerned is the impact

on local and migratory bird populations. As pointed out earlier, the Isthmus of Tehuantepec

is a crucial corridor for migrating birds and habitat of several endemic species, such as

Percale sumichrasti, Passerina rositae, and Aimophila sumichrasti (Rodarte García 1997;

BirdLife International 2012). Each year, the Isthmus of Tehuantepec is used as a corridor

for about 12 million migrating birds of at least 130 species of which many are protected by

Mexican law (Vélaz Ascencio 2012). One effect wind farms has on these birds is causing

lethal collisions with wind blades. This problem has been widely recognised, including by a

case study of La Venta II under the umbrella of the World Bank (Ledec, Rapp & Aiello

2011). However, the numbers of casualties provided in this study are probably

underestimated, as the authors of the report and testimonies by other ornithologists point

out (ibid; Grosselet 2012; Monroy 2012). Reasons for this include the fact that measures

are taken in a limited area around turbines –whereas some birds may still be able to fly

some distance after a collision before passing away– and that predators removing

cadavers are not taken into account (Ledec, Rapp & Aiello 2011; Monroy 2012; Grosselet

2012). Anonymous researchers previously contracted by wind companies argue that the

methodology being used is “not […] adequate” for the aforementioned reasons and

because the focus is only on large species, while “the bulk of the [migrating birds] are

34 For instance, Manzo (2011) finds that in the MIA of the Mareñas project (Chapter 5), “the environmental impacts […] were evaluated and approved without any verification of the presented information, in which according to the MIA some data to be evaluated correspond to another region unrelated to the project site”

39

missing, the small ones make up millions” (Anonymous researcher cited in Rojas 2012).

The researchers warn that if the bird mortality assessed for the case of La Venta II is

multiplied by the thousands of turbines that are being placed in the Isthmus, serious

consequences can be expected for the function of birds and bats in all of the continent,

especially in related to their functions in seed dispersal, pollination and as insectivores35

(ibid). This is one of the reasons two ornithologists with extensive knowledge of bird

populations in Mexico and the Isthmus of Tehuantepec declare to be in principle in favour

of wind energy, “but not in the Isthmus” (Monroy 2012; Grosselet 2012).

4.6. THE MAREÑAS PROJECT: THE BELO MONTE OF WIND ENERGY?

The Mareña Renovables (Mareñas) project will be the first wind farm to be located around

the interconnected lagoons and estuaries in the coastal area of the southern Isthmus

(Figure 4.1 and Figure 4.2). If the Mareñas project is constructed according to the original

plan, 102 large turbines (3 MW each) will be placed on the Barra Santa Teresa (thin barrier

in figure 4.2) and 30 of the same turbines on the Barra Tileme (thick barrier in figure 4.2),

making it the biggest wind project in Latin America. Although the map in Figure 4.1

(Chapter 3) would suggest wind conditions in these locations differ little from those found

up north, the continuity of the resource in the former area is even better than in the latter.

Moreover, building the turbines on sea barriers closely approximates the essence of an off-

shore wind farm (Vance 2012), which typically catches more wind but is also more

expensive than its onshore counterpart. It is in this context, interest for wind development

in this particular area becomes understandable.

However, this coastal region is also home to indigenous fishing communities called

Ikooc or Ikoot in their own language, more widely known by as the Huave Indians (Cruz

35 For humans, this last point is especially relevant in the light of devastating impacts of insect plagues on harvests and of mosquito species transmitting dengue, malaria and chagas throughout the continent, the latter of which has been recently been denominated “the new HIV/AIDS of the Americas” (Hotez et al. 2012).

40

Rueda 2011). For this ethnic group, the wind is 'sacred' (Vance 2012), as are certain areas

that are included in the design of the Mareñas project, such as the Tileme island36 or

Pueblo Viejo (Vélaz Ascencio 2012). Exploitation of primarily shrimp in the Laguna Inferior

is dominated by the Huave or Ikoots, while the Laguna Superior is exploited mainly by

Zapotecs (ibid). As a consequence, the project is increasingly protested by both Huaves

and Zapotecs, who fear the project will damage ecosystems and restrict the natural flow

of salt water between the lagoons and the Pacific.

The Mareñas project was first proposed in 2004 by the Spanish company Preneal, who

planned to develop it through Mareña Renovables S.A.P.I. de C.V., a financial vehicle

registered in Mexico37. In 2011 Preneal had already secured about 1500 hectares in San

Dionisio del Mar (Manzo 2011). According to Vance (2012), community members of San

Dionisio initially disapproved eventually but gave in after Preneal representatives 'warned'

the community that rejecting the project might have harmful consequences for the local

shrimp industry. Moreover, the community assembly in which the project was approved

was presented by Enrique Toledo and Álvaro Velasquez, two government officials the

former of which was in charge of assessing ejidos and comunidades agrarias (Rojas

2012). In the light of the influence these government officials have in the communities they

assess, their presence might have influenced the decision of the San Dionisio community38

(González Pedro 2012). Local caciques may have also played their part. For instance, on

21 January 2012, mayor Miguel López Castellanos allegedly signed building permits for

the Mareña project without the approval of the community assembly.

36 'Peninsula' would perhaps be a better description, since the Pueblo Viejo is connected to the mainland by a the Tileme barrier (Figure 4.1) 37 In 2012, a group of investors including FEMSA, Mitsubishi, PGGM and Macquarie acquired a majority stake in both Mareñas Renovables and the project itself (chapter 3). 38 Tellingly, after the contracts signed in San Dionisio, Velasquez was hired by Preneal (and later by Iberdrola) and Toledo was contracted by Acciona (González Pedro 2012)

41

Figure 4.1. ‘Chart of the Tehuantepec lagoon complex'

Source: Cromwell (1984: Figure 3)

Figure 4.2. 'Direct and Indirect area of influence of the Project '

Source: IADB (2011: Figure 7)

42

Chapter 5

Towards the first community-owned wind farm of Latin America

5.1. INTRODUCTION

With a population of around 26,450 Ixtepec is a fairly small city. Land ownership has been

organised in a comunidad agraria and administered by the Comisariado de Bienes

Comunales (Commission of Common Goods), or comuna. The comuna is a legal body

that according to Mexican law serves as a ‘representative and administrative organ of the

assembly of comuneros [comuna members] on the terms that are established by the

communal statute and custom’ (Mexico 2012b: 22). The original idea of a COWF for

Ixtepec arose during a course on territorial planning, along with other proposals such as a

site for nature conservation and a site for agricultural development (Vásquez García

2012). To be sure, these were still only ideas, and in case of the COWF nobody had a

clear vision of what it would look like, how they would be able to build it, nor where the

finance would come from.

“They [other community members] told us: you are insane, who is going to come and do it?

You have no resources to do it, nor the necessary contacts. And they were right. We were

living completely in a dream world.”

(Vásquez García 2012)

43

By chance, however, they heard about Sergio Oceransky, who was starting an

organisation named Yansa aimed at facilitating community owned wind projects. What

followed was a series of assemblies, the final of which took place on 23 October 2011,

when the COWF and Yansa's involvement in the project was approved for the second time

by majority vote39. Yansa's founders emphasise that they “are very critical of corporate

globalisation [and] definitely come from a different space […] as a normal wind developer”

(Mozen 2012) and that the community of Ixtepec “will have the final word on whether to

undertake the project” (Oceransky 2010: 747). In the light of their background40, both

founders of Yansa may be entrusted with such statements, which are among the basic

principles on which the Yansa is constituted (Oceransky 2010). Moreover, the complex

legal structure of the Yansa Group is designed in such a way that conflicts between

community interests and financial interests of investors and the CIC have been made a

practical impossibility (cf Oceransky 2010; Hoffman 2012).

5.2. LOCATION OF THE PROJECT

Originally, the comuneros that came up with the idea of the COWF had proposed an area

that was not being cultivated. However, ornithologists invited by Yansa pointed to the

importance of the site for biodiversity and an endemic bird that was nesting there

(Oceransky 2012), so a new location was needed. A garbage was proposed instead, but

this proposal met with protests from people that had squatted the place (ibid). The final

proposal was an area in the north-east of Ixtepec territorial scope (Figure 5.1 and 5.2),

which is currently used for crop growing (principally maize) and low intensity cattle farming

39 Video footage of this event has been made public and is available at: http://www.youtube.com/watch?v=6prYIiA5CtQ 40 Oceransky has previously been working as a grass-roots development worker and as a coordinator of the World Wind Energy Institute, a network of training institution aimed at democratization of wind energy intelligence. Mozen became famous as spokesperson of the group that coordinated the protests against economic globalisation during a meeting of the IMF and the World Bank in Prague in September 2000 (Schattle 2008).

Figure 5.1. The proposed location for the community based wind farm

 community bsed wind farm

Source: Author's elaboration of a satellite photo reproduced by José Luís Alvarez PalacioNote: red circle is meant as approximate indication of the area, which was still being defined at the time of writing

Figure 5.2. Views of the proposed wind farm site from the “Super” highway

Pictures on top and below left by Bart de Swart; picture on below right courtesy of The Yansa Group.

   La Ventosa

CITY OF IXTEPEC

Nizanda

La Mata

Santo Domingo Chihuitán

CarrasquedoZapote

“Super” Highway

44

(Sustentavía 2012a). As yet, the proposal of this site has generally met with positive

response from the posesionarios of the plots that make up this area.

5.3. COMMUNITY OUTREACH

In March 2012 it was highlighted by Vargas (2012) that not everyone in the community

was informed or even aware of the project. However, significant efforts have been made

since then –as had been the case before March 2012– to inform and consult the Ixtepec

community about the project (Mozen 2012; Vásquez García 2012). The principal agents of

this process have been Sergio Oceransky and the comuneros most actively involved in the

project, through channels that compromise, but were not limited to “all the organised

bodies in Ixtepec” (Mozen 2012), documentaries, personal visits, and word of mouth. In

addition, social scientists working for Sustentavía, as well as a student from Lund

University41 have – while carrying out their research through interviews, surveys, and focus

groups– further contributed to a wider and deeper understanding of the project among

community members (Mozen 2012; Vásquez García 2012). However, as Vásquez García

(2012) points out, there are limits to what can be done to inform people, if they do not want

to be informed: “you invite them and the people say no, I don not possess land in that

area, why should I go?”

5.4. LANDHOLDER CONSULTATION

Although Yansa might explicitly state it fully respects self-determination of individual

community members and the community as a whole, one might argue that the Yansa

Group has limited influence on the way empowered community members behave in the

consultation process (Hoffmann 2012). During my fieldwork I have been extremely alert for

signals that could suggest some way of 'steering' by the communeros consulting

41 See Hoffmann (2012) for the impressive and insightful result of this student's efforts

45

landholders, especially when a small group of landholders appeared to have turned

against the project (section 5.3.4). From the observations I was able to make, no such

signals were evident. For example, every landholder we spoke to was told explicitly, and

sometimes in tireless repetition, that if they did not want to participate, “no pasa nada”42.

Furthermore, in discussing the progress of the consultation process, comuneros agreed

that “if they don't want, they don't want, we will respect their choice”. Moreover,

landholders were constantly reminded that from the moment of registration it would take

until January 2013 until the results of the CFE bidding process would be known and no

'definitive' contracts nor any payments could be expected before that time.

5.5. PAYMENTS AND SOCIAL BENEFITS

Due to the heated performance of one of the four brothers holding usufruct rights to the

largest tracks of land in the proposed COWF – let us say his name was Antonio43 – the

meeting of 11 July 2012 (see above) got a little tense. Antonio, who arrived late at the

meeting, accused comunero Juan of becoming “a millionaire” through the COWF.

Essentially Antonio and a small group of peers argued that landholders were paid too little

relative to the income the project would generate.

At this point, too much of the project is still too undefined to make even an educated

guess about the expected annual revenue of the COWF. For instance, Yansa could not

start the technical design of the 100 MW wind farm until the outcome of the landholder

consultation process was known. Without this design, it would be difficult to calculate the

exact costs –estimated by Oceransky at about $ 200 million USD (Oceransky in Hoffmann

2012: 13)– and financial viability of the project, and consequently, to obtain long term loans

needed for the high upfront costs. In addition, as discussed earlier, CFE is constitutionally

bound to buy electricity at the lowest cost possible. According to Oceransky (2012) at least

42 Literally “nothing happens”, a Spanish expression to reassure someone that “it's okay”. 43 For reasons of discretion I prefer not to mention his real name here

46

11 private wind developers are known to join the CFE in the bidding process and

competition is expected to be fierce; consequently, there is much uncertainty on exactly

how low the the COWF's offer will need to be44.

However, even without this information it is possible to review the allegations that

farmers would be underpaid relative to whatever total revenue may be. To this end, I briefly

need to explain the structure of financial flows if the project as communally agreed upon

through various steps in the consultation process45. In essence, any surplus income

generated by the project after debt servicing and interest payments will be split into two

equal shares. One share (a) is reserved for the Ixtepec community and will be

administered through a trust that is democratically controlled through various existing

organisations, such as the comuna, a women's forum and a youth forum. The other half

(b) will be shared by (b1) the Yansa Foundation, which fully owned by the participating

communities, and (b2) a guarantee trust designed to minimise risk in an measure inversely

related to the amount of risk, which in turn is inversely related to the share of the debt that

has been serviced (Hoffman 2012). Of share (a), one part (a1) will be reserved for land

holders and the rest (a2) will be reserved for 'sustainable development' projects which will

be proposed and democratically approved through the aforementioned new forums an the

existing bodies.

As this structure makes clear, if carried out as designed, it is practically impossible that

anyone become rich of the COWF. In fact, the only people that get individual income from

the project are the landholders themselves. On the non-binding document the landholders

were offered to sign, it is clearly stated that individual payments would be as follows (Table

5.1.).

44 Moreover, as long as loans have not been secured, it is unclear under what financial terms (particularly interest rates) the project can be developed, in other words, how low offered power rates can be. 45 While detailed descriptions of the complex structure that will regulate financial flows of the COWF have been provided elsewhere (Oceransky 2010; Hoffmann 2012), for the purpose of this paper I will provide a simplified version here

47

Table 5.1. Proposed individual payment structure for landholders in the Ixtepec COWF

Payment per turbine

Payment for temporal impacts on lands

Payment for structural impacts on lands

$ 30.000 MXN $ 10 MXN m-2 y-1

($ 100.000 MXN ha-1 y-1)

$ 15 MXN m-2 y-1

($ 150.000 MXN ha-1 y-1)

Moreover, the document states that by signing the document, the landholder will form part

of a civil association solely consisting of the landholders of the wind farm area. This

organisation will receive approximately $ 2 million MXN per year “for productive

investments and social development, from the moment electricity generation starts”, as the

document states. In sum, if these amounts remain unchanged or go up in the final

contracts, financial and social compensation for landholders can be expected to be many

times better than in the other projects in the region.

Moreover, as a study by Sustentavía points out, the majority of the landholders that

currently farm the land use the yield solely for subsistence, and in general, productivity is

low (Sustentavía 2012). Most farmers indicated that they would like to improve and

commercialise production, but they need equipment, a well, and irrigation systems (ibid).

The extra individual income in combination to the funds channelled through the

aforementioned civil association can be expected to facilitate this. Asked what 'sustainable

development' projects have been so far proposed, among other things Vásquez García

(2012) named the creation of a well for landholders, various innovative irrigation systems,

and workshops on agroecological farming methods. The latter will “allow better productivity

without needing to add chemical fertilisers” (ibid).

Finally, a problem many landholders were complaining about was a recent increase in

cattle theft by outsiders, according to some accounts facilitated by the “Super” highway

built in recent years (Figure 5.1 and 5.2). One sceptic landholder commented that, rather

than being convinced by the 'benefit' of paved roads that would facilitate access to lands,

48

he feared that this would only further increase cattle theft. However, due to the presence of

security staff that will be hired from the local community to guard the wind farm area, the

COWF will more likely result in a decrease in cattle theft.

5.6. CULTURAL ASPECTS

In at least two ways the COWF can be expected to have a positive influence on the local

culture in Ixtepec. On the one hand, as pointed out above, it might increase agricultural

productivity; this in turn, might help preserve a culture of working on the land, which is

especially being lost in younger generations (Vásquez García 2012). On the other hand,

one of the development proposals that have been identified as deseving priority in the

women's forum was a programme for the preservation of indigenous languages. As

suggested by the outcomes of a study by Sustentavía (2012b), Zapotec and other

indigenous languages are being lost as they are spoken by only a small percentage of the

younger generation in Ixtepec. If the aforementioned proposal turns into a sustainable and

effective programme, the COWF will indirectly have contributed to the preservation of

culture46. This would mean a remarkable contrast with the common many (wind energy)

development projects in the region that are being perceived as a threat to local culture and

social cohesion, as we have seen Chapter 5.

5.7. ENVIRONMENTAL ISSUES

To be true, one part of the COWF plan (as approved by the comuna) stipulates that the

area originally proposed for the wind farm site will be used as an environmental

conservation area “to mitigate the environmental impacts of the wind farm” (Oceransky

2012). To this end, the posesionarios of this area will be paid for making sure biodiversity

46 In a similar vein, Pinel (2009) has shown how two Pueblo communities in New Mexico have used development to preserve their cultures

49

can flourish unrestrictedly47. As Grosselet (2012) notes, although the idea is “sympathetic”,

it will not be able to mitigate bird mortality through turbine collisions. A more effective

mitigation effort, as two ornithologists independently argue, would be to put the turbines on

hold during certain time periods birds are known to fly near turbines (Monroy 2012;

Grosselet 2012). According to Oceransky (2012), these types of measures have indeed

been included the “energy production model”, as well as the financial losses that might

result from this.

47 This idea is not new, of course, and resembles the UN-REDD programme and other mechanisms that facilitate payment for environmental services, including various Mexican initiatives

50

CHAPTER 6

Conclusions

In this dissertation, I have first tried to show that socio-environmental externalities and

conflicts resulting from RE projects in Latin America are not confined to place or type of

technology, although both may cause significant variations in the nature and intensity of

these externalities. The following common denominators could be identified: (1) the lack

of consultation of the local communities; (2) the fact that generated energy does not

directly benefit local communities; (3) focus on 'clean' aspects of the project (low carbon

emissions), and underestimation of local impacts in company discourses and impact

assessments.

Secondly, I have identified six factors that may have contributed to the growth of wind

development in Mexico and the Isthmus of Tehuantepec: (1) falling costs; (2) wind

resource and data availability, facilitated by the 'Action plan to eliminate barriers to the

large scale implementation of wind energy in Mexico'; (3) a series of government

programmes and laws creating a more favourable climate for NCRE; (4) multilateral

agreements and regional development plans; (5) penetration of 'sustainable development'

and 'clean energy' discourses in international development and finance institutions (6)

efforts by institutional investors and multinationals to meet ESG criteria.

Consequently, I have identified the ways in which wind energy projects have been

affecting local communities and their environment in the Isthmus of Tehuantepec. As I

have tried to show, it is especially the consultation and participation of indigenous peoples

described in ILO Convention 169, their “autonomy” described in the Mexican constitution

51

and their “free and informed consent prior to the approval of any project” described in the

UN Declaration on the Rights of Indigenous Peoples (UN 2008: 9) that have not been

respected. In the case of Mexico, this is partially due to the virtual absence of sufficiently

effective institutionalisation processes and constitutional guarantees that are needed for

the functioning of rights in general, and indigenous rights in particular48.

Other ways communities have been affected are mainly restricted to landholders. First,

some wind projects seem to have had severe impacts on land quality and irrigation

systems, although this is a subject that would certainly need closer investigation. In

general, landholders appear to have been underpaid by wind companies, a fact that was

facilitated by the monopsony position of the latter. Furthermore land contracts were lacking

transparency. For instance, many contracts restrict possibilities for small agricultural loans

but do not explicitly state this in the contract, or at least not in a language that is

straightforward and understandable (González Pedro 2012).

The Mareñas project, although still being developed, has already caused protest by

local Huave indigenous communities, for who certain areas included in the design of the

project are sacred. Moreover, both Huave and Zapotec fishermen fear the project will

affect local ecosystems and as a result compromise their fishing activities. I cannot help

noticing certain similarities here with the Belo Monte case, nor can I resist uttering the

feeling that this case might well be exemplary for the future of wind power in the Isthmus

region, and possibly the LAC region as well.

However, as a more optimistic scenario, the first stage of a COWF currently being

carried out in Ixtepec has been assessed. Unlike the CFE and the companies carrying out

wind energy projects in the region, the principal goal around which Yansa’s organisational

and financial structure have been designed are local communities. As has become clear in

48 This was also one of the principal conclusions of the colloquium "Reflexiones teóricas en torno a los derechos de los pueblos indígenas" that took place from 31 August to 4 September 2009 at the Law Faculty of the Universidad Nacional Autónoma de México and which was attended by the Author.

52

chapter 5, this has already proven to mitigate many social disruptions commonly

witnessed in other cases of wind farm development. Moreover, while the project will not be

free of externalities, a primary goal is to keep impacts to a minimum and carefully assess,

publish and evaluate any remaining problems. Finally, in case the project in Ixtepec

succeeds, part of the revenue will be used for the conservation of indigenous language

and culture, and for the revitalization of traditional agriculture, of agroecological methods

that will diminish the need for fertilisers (Vásquez García 2012). Among other arguments,

the latter is perhaps one of the most important reasons for suggesting that using

discourses on ‘sustainable development’ as a vehicle for change might a much more

pragmatic strategy than throwing the baby out with the bathwater.

That said, it is important to note that environmental effects of wind farms in the region,

that serves as one of the most important corridors for bird migration worldwide, have been

insufficiently been taken into consideration, nor have the indirect consequences of mass

bird mortality for humans in Mexico and Latin America. This, together with the impact of

wind farms on land quality, is definitely recommended as a line of further investigation.

53

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APPENDIX

Land lease contracts analysed for Table 4.1