CFE to Consolidate Power in 2021-2025, Reports Business PlanBy Cas Biekmann | Mon, 01/25/2021 - 16:56
Mexico’s state utility CFE published its business plan for 2021-2025. In the 106-page document, the commission outlined a MX$381.5 billion (US$19 billion) investment plan, with a focus still on natural gas-based energy generation. For 2021, CFE´s portfolio of projects and investment has increased by 20.6 percent.
Fifty-three percent of this investment, which is partly financed through CFE´s Master Investment Trust, will go toward capacity to generate electricity, whereas CFE´s transmission and distribution arm will receive 20 percent of the investment. That being said, CFE stresses that all of this investment depends on available resources and further analysis for the projects regarding their financial and operational viability. The rest of the investment is destined to CFE´s telecommunications and internet efforts, Energía a Debate reported.
The largest amount of investment will take place in 2022. MBN Expert Victor Luque, Partnet at ATIK Capital, says that this is in line with expectations. “In Mexican governmental periods, the first two years are usually very slow. Since the new government is completely new, the transition is even more difficult. In addition, we are dealing with COVID-19. But usually, the third and fourth year of a term are good years for investment and the private sector,” he said in an interview with MBN. Using the business plan, CFE aims to strengthen its leading position in Mexico’s energy matrix.
Furthermore, CFE does not have plans to invest in renewable energy during the current presidential term.
The company highlights that additional energy generating capacity will be required from all players in the market during the 2021-2025 period, where more than 24.8GW entered operation in the year 2020. From this total, the main technologies consisted of 10.2GW of combined cycle, 7.5GW of photovoltaics and 5.7GW of wind energy.
The eight projects announced by CFE in the 2020 infrastructure plan, which total 4.55GW, are being analyzed for their capability to replace old capacity or to function as a strategic reserve toward reliability in the wholesale electricity market (WEM).
CFE’s transmission plans continue to be based on the National Electricity System Development Program (PRODESEN) 2019-2033. The PRODESEN for the 2020-2034 period will be published soon, reports the state utility. In any case, this includes 142 new projects for transmission lines, substations of power and installation of reactive compensation equipment. For the distribution area, CFE aims to carry out 100 new projects regarding expansion and modernization of the distribution network and to acquire operating equipment.