Image credits: Kristjan Kotar
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News Article

CFE Seeks to Import Electricity From the US

By Paloma Duran | Wed, 12/02/2020 - 11:21

CFE International hopes to import electricity from the US during a five-year term. However, this depends on an environmental evaluation and the assurance that this new supply will not affect US demand.

Back in June, the company filed a request to the US Department of Energy to transmit electrical energy from the US to Mexico. The request was signed by Axel Rodriguez, Director of CFE International, who said CFE has CRE’s authorization and support, says El Sol de México.

The request states that energy purchased will be used to supply electricity at the border. In addition, CFE assured that it will not affect the demand for electricity in the US, since the energy that will be used in Mexico is expected to come from the surplus of entities that sell electricity, reported Cobertura 360.

According to CENACE, CFE does not generate enough energy to satisfy demand in Mexico. As a result, the company requires US electricity imports, reported El Sol de México.

Rodrigo Osorio, General Director of Energy Agency at Puebla, said there are many challenges in the energy sector, but unquestionably one of the most urgent ones is universal electrification. Osorio said the lack of electrification is an amplifier to any other social disadvantage, reported MBN.

Last year, the Program for the Development of the National Electricity System (PRODESEN) estimated that 6,497 communities in Mexico lacked access to electricity. Osorio added that the nation's current and future development depends on proper electrical infrastructure planning. He said that to achieve social justice, it is imperative to achieve universal electrification, reported MBN.

However, CFE declared that the company is unable to satisfy some regional demands at the border, reported Vanguardia. In September, CFE recoded losses totaling US$3.18 billion. These have been greatly influenced by COVID-19 and show a stark contrast during the same period in 2019, when CFE recorded roughly US$104.3 million in profits, reported MBN.

In November the Federal Audit Office (ASF) published its report on the Public Account’s Superior Fiscal Results for 2019 where it mentions that CFE’s subsidies, its uncompetitive tariffs, the ageing of its infrastructure and inefficient governance have caused the company to be unprofitable and incapable of generating economic value. These deficiencies mean the company is not able to guarantee operations with efficiency and effectiveness, reported MBN.

According to El Sol de México, CFE said electric power transmissions can be carried by any transmission facility or interconnections authorized by Mexico and the US. PRODESEN reports that Mexico has 11 electrical interconnections in the Mexico-US border with capacities that range from 6 to 800MW and that the transmission could be made through the plants in Texas, California, New Mexico and Arizona, reported Vanguardia.

The request’s approval depends on environmental impact evaluations and the assurance that this will not affect the US supply. Ramses Pech, Energy Analyst and Partner of Caraiva and Asociados-León & Pech Architects, said that electricity trade between the US and Mexico has been a common practice.

Documents from the US Department of Energy confirm that the Mexican government has requested the commercialization of electricity since the 1990s. Pech said these requests are authorized mainly because Mexico does not have the necessary infrastructure to supply electricity in some regions, reported El Sol de México.

The data used in this article was sourced from:  
El Sol de México, MBN, Vanguardia, Cobertura 360
Photo by:   Kristjan Kotar
Paloma Duran Paloma Duran Junior Journalist and Industry Analyst