Power to the people?

Power to the people?

Type: Reports
Date: 1 November 2011
Campaigns: Climate

The La Mata and La Ventosa wind park in the state of Oaxaca is the World Bank’s flagship Clean Technology Fund (CTF) project in Mexico. The UK government has provided £385 million in capital to the CTF from its overseas aid budget, 14% of the CTF’s total funding.

This study shows that the wind park will produce 67.5 MW per year, enough to power 160,000 homes in a state where around 7 per cent of the population lack access to electricity. However, it will not power any homes as all of the electricity will be sold at a discounted rate to Walmart, the world’s largest company (and owner of Asda in the UK).

This is achieved by exploiting a loophole in Mexico’s energy laws, which allows Walmart to officially claim that it has produced the power itself. In fact, the company owns just a nominal stake in the wind park, which is 99 per cent controlled by EDF (Électricité de France), the world’s largest electricity utility.

Instead, the World Bank hopes that the project will encourage a broader transformation in the Mexican electricity sector, where the state controlled company currently charges companies more for their electricity than domestic consumers. Local activists are demanding cheaper electricity to avert energy poverty, but “self supply” projects following the Walmart EDF model only reduce costs for corporations and could worsen energy inequalities.

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