Your electricity bill will be more expensive due to climate change

Residential electricity consumption could rise up to 20% by 2070 due to cooling demands to stay comfortable despite climate change.
Image: neopraxis.mx

The impacts of climate change on our household economies will be considerable. Rising temperatures will cause us to consume more electricity, and during more intense heat waves, it will be harder for the power grid to meet demand, an effect we are already beginning to see today in the Yucatan Peninsul (southeaster Mexico) with its continuous blackouts.

To understand the origin of this problem, we must consider that the average family in Mexico uses 30% of their electricity to make their homes more comfortable when it is hot, either with fans or air conditioners. However, there is significant variation across the country: in the center, only 3% is used for cooling, in the south 30% is used, and in the north it accounts for up to 53% of households’ electricity bills.

Graph showing % of electric consumption due to AC for different regions in Mexico
Own ellaboration with data from ISBN:978-607-8273-30-0

CFE (Mexican electric utility) is aware of these regional differences and applies different electricity rates across the country. In some relatively temperate places such as Mexico City (central Mexico), the basic rate 1 applies, where electricity costs start at MXN 1.08/kWh (around US $0.05). In Cuernavaca (central-southern Mexico), which is a little hotter, rate 1A is cheaper, starting at $0.96/kWh. In the hottest cities in the country, such as San Luis Río Colorado in Sonora (northwestern Mexico), rate 1F starts at $0.80/kWh. The idea behind this differentiation is that where it is hotter, people use more electricity to maintain comfort, and CFE subsidizes rates more to protect household budgets. In reality, this is a huge problem for CFE, which must receive 120 billion Mexican pesos each year to compensate for the fact that most of the population pays less than 30% of what it costs to generate electricity. What makes the situation worse is that these subsidies do not reach those who need them most; the current rate structure means that those who have the money to pay for air conditioning and consume more electricity receive most of the subsidy.

This tariff structure is particularly vulnerable to climate change. We must consider what will happen in a country that is warming faster than the rest of the world: a much-discussed news item in recent weeks was that Mexico has warmed by 1.8°C while the global average is 1.3°C, figures obtained by researchers from the UNAM Climate Change Research Program. By 2100, we could see more than 3.1°C of warming in Izcalli, a suburb of Mexico City. Today, the average family in Izcalli pays $165.00 every two months for electricity. By 2070, that same family could have to pay up to an additional $137.00 solely due to the increase in cooling demands to maintain comfortable conditions inside their homes. Nationwide, residential electricity consumption could rise by almost 20% by 2070 due to global warming.

To stay comfortable, many families who can afford it will buy air conditioning. Today, only 20% of Mexican households have air conditioning, but in higher-income places such as the United States, this figure rises to 89%. However, this is not a good measure of adaptation to climate change, as it involves enormous electricity consumption that can lead to the failure of the national power grid just when we need it most; a blackout on the hottest day of the year can quickly turn into a tragedy. To truly adapt properly, the government must encourage our homes to reject external heat with thermal insulation, light-colored waterproofing, and a bioclimatic design that is in tune with our local climate.

Article translated from Spanish with DeepL, proofread by a human

Article published originally in Spanish in the Izcalli Times