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Mexico's proposal to slow clean energy stalled at the last minute

Alejandro Cegarra/Bloomberg

- 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

MEXICO CITY
Petroleumworld 05 14 2020

Proposals by Mexico's government to favor state-owned power utilities over new renewable generators were stalled at the last minute, according to documents viewed by Bloomberg News.

In an email dated May 12, an official for the National Commission for Regulatory Improvement said that the new measures presented possible compliance costs and called for a further regulatory impact study. The Energy Ministry had wanted the measures to be published immediately in Mexico's official gazette.

The plan was the latest move by President Andres Manuel Lopez Obrador's administration to reduce private sector generation, policies that have been criticized for stifling development of green power. The proposals were designed to support supply stability, according to a draft proposal seen by Bloomberg News.

A ministry spokesperson didn't respond to requests for comment.

Under the proposal, the energy ministry would impose a number of tests and limitations on new solar plants and wind farms, 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 . Without the tests, new plants will not be able to come online.

“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.”

Mexico's president, 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.

Under AMLO's watch, Mexico also suspended long-term power auctions for private companies and delayed a rule banning the sale of highly polluting diesel for five years because state-owned oil company Petroleos Mexicanos wasn't prepared. At the same time, the country is oversupplied with high sulfur fuel oil after the International Maritime Organization banned its use to power ships this year due to the environmental impact.

Reporting by Justin Villamil and Amy Stillman from Bloomberg.

bloomberg.com
05 13 2020

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