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Mexico's renewable energy resources
hit by a reliability proposal

Alejandro Cegarra/Bloomberg

Future of Mexico solar industry challenge by a new government proposal

- Proposal would prioritize operations by state-run utility CFE
- New tests and limits on solar and wind plants would be imposed

By Justin Villamil and Amy Stillman/Bloomberg

Petroleumworld 05 13 2020

Mexico's energy ministry is seeking to prioritize state-run utilities over new entrants to support supply stability, according to a draft proposal seen by Bloomberg News, a step that could place restrictions on expanding the country's renewable power capacity.

The plan is the latest among moves by President Andres Manuel Lopez Obrador's administration to reduce private sector generation, which have been criticized for stifling development of green power. A ministry spokesperson didn't respond to requests for comment outside normal business hours.

Under the proposal, the energy ministry would impose a number of tests and limitations on new solar and wind projects, including congestion studies, according to the documents. It would also give the National Center for Energy Control, known as Cenace, the power to reject new plant study requests and prioritize state-run utility Comision Federal de Electricidad .

“This policy will contribute to the reliability, safety, continuity and quality of the National Electric System,” the ministry said in the document. It will provide for “the orderly increase in generation with intermittent clean energy, connected and not connected to the National Electrical System, supervised by the state, through the Energy Ministry.”

Mexico's president, widely known as AMLO, has come under fire for favoring the nation's state-run companies at the expense of new competition and dialing back energy reforms from the previous center-right administration. Earlier this month, Cenace indefinitely suspended critical tests for new clean-energy projects, leading to a rebuke by the nation's antitrust regulator.

A draft proposal by the Federal Electricity Commission leaked in December aimed to increase transmission costs for private companies and give the CFE preference over private generation when electricity is dispatched into the national grid.

Reporting by Justin Villamil and Amy Stillman from Bloomberg.
05 12 2020



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