CFE to Generate 65% of Energy by 2024: López Obrador

President Andrés Manuel López Obrador’s efforts to change the constitution failed to favor state companies CFE and PEMEX. Yet, he still aims to make a significant impact on the energy sector before his term ends in 2024. 

On Tuesday, the president stated that by the end of next year, CFE will generate 65% of the nation's power, a substantial increase from the current 39% and a win for his administration's effort to raise the figure to 54%. López Obrador mentioned the recent purchase of 13 generation plants from Spanish firm Iberdrola, which includes 12 combined cycle plants powered by natural gas. The deal is set to close in 45 days. This acquisition will give CFE control of approximately 55% of the country's generation capacity, making it possible to achieve the target of 65% by the end of next year.

The president dismissed complaints about the deal, stating that those opposing it “want to privatize profits and socialize losses.” Furthermore, he clarified that the acquisition was made possible thanks to the government's solid public finances. He also noted that the purchase price of US$6 billion for the already-operating 8.5GW capacity was 30% cheaper than building new projects.

President López Obrador stressed that by setting differences aside, Iberdrola and the Mexican government reached a historical agreement, which will allow progress in the implementation of Mexico’s new energy policy. 

Furthermore, he highlighted the combined-cycle plants in Mérida and Valladolid that would run mainly on gas imported from Texas, with capacities of 499MW and 1,020MW, respectively. These plants are expected to come online by the end of 2024 or early 2025.

Development plans also consider infrastructure works that would increase access to the fuel in the country's southeast. These projects include the recently completed 250MMcf/d Cuxtal I interconnection, which links Mexico's Sistrangas network with Engie SA's Mayakan pipeline on the peninsula. Engie and CFE have announced plans to double Cuxtal's capacity to 500MMcf/d. Another project is the US$4.5 billion Southeast Gateway offshore pipeline that CFE is jointly developing with TC Energy Corp, which will serve as an extension of the existing 2.6Bcf/d Sur de Texas-Tuxpan pipeline, providing gas to the cities of Coatzacoalcos and Paraíso, Tabasco.