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News Article

285 Potential Energy Projects Waiting for SENER’s Approval

By Cas Biekmann | Thu, 09/03/2020 - 09:19

Following President López Obrador’s announcement to reactivate energy infrastructure investments, the Business Coordinating Council (CCE) organized to suggest projects that are at a more advanced stage and therefore have higher potential for said reactivation. In total, there are 285 projects pending approval from SENER, which represent an investment of over US$100 billion, said the president of CONCAMIN’s Energy Commission, Regulo Salinas, to El Financiero.

“We took this information to the government and told them that there are many projects that have been put on hold due to bureaucratic procedures, which they could easily undo to quickly obtain capital and resources,” Salinas said. In addition, he argued that according to guidelines, permits should be much easier to obtain, yet slowdowns from SENER are unavoidable.

Salinas pointed out that 220 definitive suspensions against SENER and CENACE’s recent measures affecting renewable energy projects had been obtained during the last couple of weeks. This follows definite suspensions on the potential expansion of Clean Energy Certificates (CELs) and the increased transmission costs proposed by the ministry. “The result has been good, in the sense that these provisions have not had a real effect in terms of costs. They have had an effect on investor confidence, however. They prefer not to invest, while there are no clear rules of the game,” Salinas warned.

While changes might alter the industry’s workings, what hinders development most is uncertainty, says Salinas. If the government does want to change the rules to favor state production companies, it should do so structurally and follow appropriate processes. What causes uncertainty, after all, is to change rules for projects that have already been invested in. In an interview with MBN, Energía CB Consultores’ Director General Cynthia Bouchot agrees with this point of view: ““If the government wishes to change the schemes, it should do so in a legal and constitutional manner. This also means it needs to respect past investment rights. New players will know what the new rules of the game are and whether or not they can work within them,” Energía CB Consultores’ Director General Cynthia Bouchot said in an interview with MBN. “With the measures the government is taking, regulations are so uncertain that companies do not know what will happen to them, including their already built projects. This is also generating a significant increase in basic supply tariffs and impacting the interest of off-takers to create safer options.”

The data used in this article was sourced from:  
El Financiero, MBN
Cas Biekmann Cas Biekmann Journalist and Industry Analyst