Image credits: Gerd Altmann
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News Article

Energy Laws Need to Be Respected: Landau

By Cas Biekmann | Mon, 05/11/2020 - 12:39

The US Ambassador to Mexico Christopher Landau said that the recent decision of the Mexican government regarding the energy sector, as well as the lack of specifications to restart supply chains that have been halted as a result of the pandemic, are reasons for concern, reported El Fincanciero. The ambassador is just one from a multitude of experts on both sides of the table weighing in on CENACE’s decision to halt renewable energy projects for an indefinite time.

The measure delays the start of operations for 28 plants that provide solar and wind renewable energy.  Landau stated he had been in contact with the Mexican government about the issue, showing concern for private operations with US interests and those without: "When private companies come to invest under certain rules, you have to respect them. You cannot continue changing them. This has been a cause for concern for us," he said, while recognizing that it is Mexico’s right and responsibility to set rules for its energy sector as a sovereign country. Landau called for both the Mexican government and the private sector to recognize the potential for a mutually beneficial situation in the energy sector and expressed hope that the dispute is resolved swiftly as nobody can afford to quarrel in times of crisis.

President López Obrador parried criticism by stating that private companies did not contribute that much to the energy grid to begin with and that the government was merely trying to create more stability for the Mexican grid with CENACE’S measure. The president also mentioned that the overall strategy is indeed to strengthen CFE. Nevertheless, from the government’s point of view the state company was shorthanded in the Energy Reform. Now, the government just wants to give the state company a fair deal. Mexico News Daily countered the president’s first claim regarding private contributions, citing CRE data showing that private players provide 46 percent of the nation’s electricity and do so 85 percent cheaper than CFE.

Industry expert Leonardo Beltrán, currently of the Institute of the Americas, supports the notion that private companies have been quite successful in Mexico. In an interview with BNamericas, he outlines his view that the measures are in fact a 100 percent compatible with the government’s focus to strengthen state companies. Furthermore, Beltrán stresses that the government has not changed the legal framework at all, but is only altering regulations related to the processes with the goal to strengthen CFE. How far this process goes remains to be seen, as does the result of the pending lawsuit coming from the private sector.

The data used in this article was sourced from:  
El Financiero, Global Energy, CRE, Mexico News Daily, BNamericas
Photo by:   Gerd Altmann
Cas Biekmann Cas Biekmann Journalist and Industry Analyst