The crisis in Ukraine led to skyrocketing commodity prices and puts pressure on natural gas costs and supply. CFE reports its second financial year in a row with red numbers. Furthermore, the Open Parliament Forums about the electricity reform conclude after more than one month of discussions. In other news, yet another US senior official visits Mexico and pushes the agenda for renewable energy and climate change action.
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CFE lost MX$95.3 billion (US$4.68 billion) in 2021, according to its recently published financial report. The financial loss represented an increase of 10.9 percent compared to 2020, despite having increased revenue by 12.5 percent. It is the second consecutive year the state utility closes with red numbers. According to CFE, the losses were caused by the COVID-19 pandemic and increased prices of natural gas during the winter storm that froze Texas’ natural gas supply in February 2021.
Commodity prices have skyrocketed following the Russia-Ukraine conflict. War in Ukraine and economic sanctions to Russia will most likely impact oil and natural gas prices, which also concerns Mexico. The country produces 60 percent of its electricity through natural gas, which it mostly imports from the US. Europe’s desire to achieve energy security may lead Mexico to look to the US and the Middle East for liquefied natural gas (LNG), which could either drive up natural gas prices or cause a shortage in supply.
Jose W. Fernandez, Under Secretary for Economic Growth, Energy and Environment, US Department of State, is visiting Mexico from Feb. 27 to Mar. 3. Fernandez will discuss key issues for the bilateral relationship between Mexico and the US, including energy, the climate crisis and nature conservation, as well as investment promotion and innovation. Fernandez will also meet with Mexico's ministers of foreign affairs, environment, health and finance.
On Feb. 28, the Open Parliament Forums to discuss President Andrés Manuel López Obrador's energy reform proposal concluded. During the last forum, results of the 2013 Energy Reform were reviewed. The reform’s discussion will now continue in Congress commissions, before being subject to a vote. The Open Parliament featured 25 forums in which 135 panelists shared their analysis on energy issues.
A federal judge granted a definitive amparo that prevents the execution of resolution RES/550/2021 from the energy regulator CRE. This resolution gave priority to CFE plants over private power producers. The suspension, granted by Judge Juan Pablo Gómez Fierro to the Mexican Energy Association (AME), has a general effect. This means the resolution stands for all actors in the energy sector.