CFE Strengthens International Collaboration

Mexico’s Supreme Court of Justice ruled against SENER’s gas decree, removing the energy ministry’s strategy for natural gas from the market, at least for the time being. Meanwhile, CFE’s 2023 budget reveals the state-utility bets on geothermal energy to strengthen its clean power production. Moreover, ASOLMEX assured that Mexico has the potential to further detonate solar energy. In other news, Mexico’s energy policy is under the scope as it allegedly violates USMCA standards. 

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Supreme Court Rules Against SENER’s Gas Decree

The Supreme Court of Justice (SCJN) suspended the Mexican government's order, issued by the Ministry of Energy (SENER), for companies to purchase surplus natural gas from the state energy companies, PEMEX and CFE. The suspension entered in general effect.

CFE Bets on Geothermal Energy as Pilar of its Clean Energy Strategy

In 2023, CFE's investment projects in clean and renewable energies will partly focus on geothermal energy, where it plans to invest MX$1.5 billion (US$75.2 million). This positions geothermal energy as the state-owned company's main commitment regarding clean energy greenfield development, displacing solar and wind. The investment information was published in the draft of the Federal Expenditure Budget (PEF) 2023.

Mexico’s Energy Policy Discourages Foreign Investment 

A new report revealed that the Mexican government's decisions regarding energy and hydrocarbons policy discourage foreign investment in the sector. The US Department of State published its Investment Climate Statements: Mexico 2022 report, which indicates that private investors have been discouraged by energy policies implemented in Mexico.

Private Players Produce More Electricity Than CFE

Despite several rejected permits involving clean energy generation, private companies have increased their participation in the National Electrical System (SEN) since 2021. From Sept. 1, 2021, to the end of June 2022, SEN increased its power generation capacity by 1,687.5MW, of which CFE only generated 656MW supported by the start of operations of its combined cycle power plant "Centro." Meanwhile, 19 private wind and photovoltaic plants went into operation, adding 517MW of capacity to the SEN, together with another three plants powered by different technologies representing 514 MW, adding up to a total 1,031MW. Approximately 33 percent of the 1,687.5MW, came from clean technologies.

Mexico Has the Potential to Detonate Solar Energy: ASOLMEX 

To reach its clean energy goal set for 2030, Mexico requires new investments equivalent to US$13 billion in large-scale solar projects. By the end of this decade, experts predict that the installed solar capacity can reach up to 15,040MW. Because the current installed capacity stands at 6,488MW, this equals an increase of 8,552MW in the next 8 years. Nelson Delgado, Director, the Mexican Association of Solar Energy (ASOLMEX), said that accomplishing this goal is possible, as Mexico has the resources and technology to do so. However, a plan to detonate these projects remains pending.

FIDE Installed 100MW of Distributed Power

The Electric Energy Savings Trust (FIDE), recently reached the milestone of 100MW of installed power by placing 41,436 photovoltaic systems at homes as well as micro, small and medium-sized enterprises (SMEs). The Trust highlighted that this was accomplished without saturating or destabilizing the country’s transmission and distribution network, as occurs when intermittent photovoltaic solar technology began to permeate the energy mix.

BMV Creates the Mexican Carbon Association

As part of the initiatives of MEXICO2, the environmental market platform of The Mexican Stock Exchange Group (BMV), the financial entity announced the launch of the Mexican Carbon Association. The association’s main objectives will be to contribute to the fulfillment of the commitments made in the Paris Agreement, to work toward achieving the UN Sustainable Development Goals and to reduce the impact industries have on the environment.

Mexico Among Cheapest Electricity Rates in Latin America

According to data from Global Petrol Prices regarding December 2021, Mexico has the fourth-cheapest electricity tariff in Latin America, with a price of US$0.086/Kwh. Meanwhile, Cuba, paying US$0.030/Kwh, Argentina, with US$0.041/Kwh and Paraguay, with US$0.058/Kwh make up the top three countries with the cheapest electricity in the region.

Mexico’s Energy Sector Under Alleged USMCA Violations

If the 2014 Energy Reform promised greater protections for free trade and a partial retreat of the state, recent reforms have seen the state re-immersed in all aspects of the energy industry. Through these reforms, it has been alleged that Mexico has violated aspects of the USMCA free trade agreement by fomenting state monopolies within the energy sector and hindering the participation of private companies, particularly from the US. Earlier this year, the US initiated formal proceedings between both countries.