CRE Fines Iberdrola for Self-Supply ContractsBy María José Goytia | Wed, 06/01/2022 - 17:47
CRE fines Iberdrola with the highest fine in the history of the energy sector. Meanwhile, despite negotiations with US companies, President López Obrador keeps pushing for contract cancellations, arguing that the national electricity system may collapse. Furthermore, studies explore the potential of offshore wind energy in Yucatan.
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CRE fined a Nuevo Leon-based arm of Iberdrola, imposing the highest charge in the history of the Mexican energy sector. The penalty is the first concrete action taken by the López Obrador's administration against the self-supply market. The energy regulator fined Iberdrola MX$9.14 billion (US$466 million) for operating based on illegal self-supply contracts via its plant in Nuevo Leon, called Dulces Nombres. The announcement was published after the regulator’s extraordinary session past Friday, May 26. CRE considers the Spanish multinational violated the law by illegally selling electricity to its partners.
Meetings continue between President López Obrador and the US Ambassador to Mexico, Ken Salazar, to discuss investment possibilities in the Mexican energy sector. For the past few weeks, the public functionaries have negotiated with US companies that hold concessions in Mexico, aiming to reach agreements to avoid lawsuits and meet the USMCA’s provisions. Nevertheless, even though the negotiations continue, López Obrador continues his efforts to revise private energy contracts.
While Mexico focuses on fossil fuels, an unused opportunity for renewable generation is left on the table in Yucatan. The peninsula’s potential is enormous: the region's winds, which reach great distances out in sea, are ranked among the strongest in the world. Meanwhile, the low intensity swell allows for easy maintenance operations. Some challenges for offshore wind are the investment in underwater transmission lines and technology required to mitigate environmental impact. However, the possibility should be explored, as it could launch Mexico as a wind power producer leader.
During his tour of Sinaloa, President López Obrador informed that the Picachos and Santa Maria dams will start operations in Dec. 2023 and will begin producing electricity in March 2024. The new infrastructure works are part of the government's strategy to strengthen CFE's electricity generation capacity through the modernization and construction of new hydroelectric plants.
The Energy Committee of the National Chamber of the Transformation Industry (CANACINTRA) has identified 10 projects for clean energy generation. Five of the projects received investment from Spain, Italy and the United States. The other half of the projects use Mexican funding.
The CRE approved a permit to generate electricity to the oil company Hokchi Energy, which applied for the permit in Dec. 2020 to generate electricity using natural gas at its a 27MW facility in Tabasco. Hokchi was the first private oil and gas operator in Mexico to receive authorization to execute the development plan for the Hokchi field, located in the Gulf of Mexico, after the approval of the energy reform of former President Enrique Peña Nieto.