Insights from COPARMEX’s Clean Light Forum

Planning, innovation and public-private participation are fundamental pillars to strengthen the functioning of the Federal Electricity Commission (CFE), said the Employers' Confederation of the Mexican Republic (COPARMEX) during the forum "Clean Light for All Mexicans."

During the event, experts suggested that strengthening CFE should be approached from two perspectives: generating public policies to provide greater benefits to end-users and promoting better corporate practices. Carlos Aurelio Hernández, National Vice President of Renewable Energies, COPARMEX, emphasized the importance of strengthening the state-owned productive company, considering that in 2021 alone, it recorded technical and non-technical losses of MX$13 billion (US$763 million). 

Other topics discussed included participation in the Wholesale Electricity Market (MEM), the reactivation of long-term auctions and transmission line capacity, among others. Diana Pineda, Partner, González Calvillo questioned whether it is beneficial for Mexicans to have a strengthened CFE and whether this necessarily implies state monopoly and rescuing different parts of the productive company at the expense — or not — of state finances.

"The largest machine created by man is the Interconnected Electrical System," says Santiago Barcón, CEO, PQ Barcon.  Hence, he highlights the need for planning and greater involvement of CFE in the processes mandated by CENACE and SENER to indicate where and when terminals should be placed. "In 10 years, we have not expanded the transmission system; obviously, destiny catches up with us," he adds.

The focus of a public policy should be the consumer, says Viviana Patiño Alcalá, Investigator of México Evalúa. Talking about strengthening CFE must involve discussing its corporate governance, decision-making and understanding that for it to achieve its goals, it must invest in its business plans and innovation, she adds.

José Carlos Femat, Founding Partner, AEE Sustentabilidad Energética explains that the MEM, which is small compared to the size of the economy, could be expanded with private participation, for which clear rules are essential. "The state cannot do it alone; we need the Private Initiative to participate as well and allow complementing, not replacing, the State in this great goal of providing energy security to the Mexican population regardless of their demand size," he adds.

At the event, experts also discussed challenges and opportunities of distributed generation, as well as strategies to access more competitive costs and to provide energy to remote communities and expand coverage. "Currently, 13.5 million people use wood or coal in their homes, a sign of energy poverty," says Patiño.

CFE, as an energy provider to market participants, could benefit from greater price stability and supply assurance, says Femat. The challenges would be to avoid distorting competition in the MEM, ensuring equal opportunities for actors and guaranteeing fairness in participation, he adds.