Concluding an Energy RevolutionWed, 02/21/2018 - 16:30
Q: What are your goals as the new Deputy Minister of Electricity at the Ministry of Energy?
A: Although I have recently been appointed Deputy Minister, the team and I have been working since the beginning of this administration on the same goal: the implementation and consolidation of the Energy Reform. As head of the Deputy Ministry I can bring a transversal vision of the whole energy industry and the way the oil and gas and electricity sectors relate and affect each other, due to my experience interacting with CFE, CENACE, PEMEX and CENAGAS
Q: What is the importance of CFE’s separation into several subsidiaries for the Mexican energy market?
A: The Deputy Ministry of Electricity takes part in the Board of Directors that monitors the strict legal separation of CFE. As a part of that board, I have witnessed how several projects have been submitted for review by CFE’s generation subsidiaries, including associations with private companies. Such associations are highly beneficial for both players. CFE can provide tangible and intangible assets such as the generation plant, previous knowledge of the industry and generation permits, among others, while the private company can offer cutting-edge international technologies and experience, as well as investment capital. We are heading in the right direction regarding CFE’s effective and complete separation, but there is still a great deal of work to do to ensure that the previously monolithic company, which owns over 85 percent of the installed generation capacity in the country, allows for fair competition in the Mexican market, while also remaining a competitive player.
Q: What project do you consider critical for the proper development of the Mexican energy industry?
A: It is hard to talk about how important the projects outlined in PRODESEN 2017-2031 are, as they are all part of a plan to achieve a dynamic sector that fosters investment and competition by developing an efficient and clean industry. As part of a chain, it is important they are all completed. Nevertheless, a project that will be shaping Mexico’s energy infrastructure in 2018 is the public tender for the construction of the interconnection line between Sonora and Baja California. Its importance resides in the fact that it will interconnect an isolated system with the rest of the country, with the benefit of providing the first system with more reliability, demand peaks coverage and the ability to reduce and even possibly stop energy imports from the US. The pre-basis for the tender was published on Dec. 7, 2017, and we have happily witnessed a strong reception from the whole industry. We hope to be able to receive offers by 2018 with the start of operations expected in 2021. This project represents an estimated investment of around US$1.1 billion.
Q: What is the importance of Mexico’s admittance into the International Energy Agency?
A: As a member, Mexico is now part of an association with the mission to promote both the creation of more clean sources of power generation and energy efficiency. As our country is a strong producer of oil and gas, but also has plenty of renewable resources available, Mexico can profit from the broad knowledge and experience of the IEA member countries, learning from their best practices and avoiding their previous mistakes. We will also obtain a series of international regulatory best practices from the agency as well as five-year evaluations of our energy policies. As the Executive Director of the IEA, Fatih Birol, mentioned, Mexico’s fast implementation of its Energy Reform equates it to an energy revolution.
The agency is also benefiting from our integration, since Mexico is the first Latin American country to become a member. Furthermore, we have been the fastest country to be accepted after application. The letter of intent was presented to the agency on November 2015 and by December 2017 the Mexican Senate was already ratifying the International Energy Program. One of the contributing factors for our rapid integration was the fact that the agency was able to witness the solid participation of the private industry supporting public institutions in the energy sector.