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Weekly Roundups

Mexico May Face More Pressure from USMCA

By María José Goytia | Wed, 06/29/2022 - 17:16

As Mexico’s energy policy follows largely the same direction, the US Trade Representative is preparing international arbitration against Mexico under USMCA provisions. Moreover, SENER seeks to remedy CFE’s excess gas capacity by altering gas transportation rules. In other news, due to a worker’s accident during maintenance operations, the Yucatan Peninsula experienced a massive blackout.

Ready for more? Here is the Week in Energy!

 

Mexico at Risk of Facing Further USMCA Claims

Mexico’s energy policies continue to motivate international arbitration, as US companies argue new regulation violates the US-Mexico-Canada Agreement (USMCA). The claims are meant to push Mexico to adopt corrective measures toward its implementation of the free trade agreement, as the US and Mexico continue their democratic efforts to avoid the arbitrations. According to Bloomberg, Katherine Tai, US Trade Representative, has worked on a request for formal consultations on the USMCA.

 

SENER Seeks to Remedy CFE’s Excess Gas Capacity

The Mexican Ministry of Energy (SENER) has urged natural gas pipeline operator CENAGAS and CRE to implement new criteria to favor the contracting of natural gas transportation from CFE, as the state company pays for significant natural gas capacity that it does not utilize. The move would grant priority to the gas transportation service to companies that signed contracts with CFE or any of its subsidiaries over those with private contracts.

 

Massive Blackout Leaves Yucatan Peninsula Without Electricity

A massive blackout affected 1.3 million users in the Yucatan Peninsula on June 22, due to operational problems of six high voltage lines. The incident was caused by a CFE worker, who suffered an accident while performing maintenance on one of these lines. Affected users in the three states amounted to 20,938 in Campeche, 681,950 in Yucatan, and 619,612 in Quintana Roo.

 

Electricity Prices Pressured by Rising Natural Gas Costs

US gas prices have been increasing the past week, which consequently impacts Mexico’s power and gas markets, as the American product is the source for over 65 percent of the electricity supply in the country. As the trend is expected to continue through the rest of 2022, experts are concerned of how this could affect the government’s ability to maintain the subsidy on electricity prices. As CFE was said to require adding close to US$7.4 million to the Federal Expenditure Budget (PEF) in order to sustain the rising gas prices, utilities could be expected to respond to market pressures by increasing electricity prices.

 

FIDE, Honduras Collaborate to Implement Energy Efficiency System

The Honduran Ministry of Energy and Mexico’s Energy Efficiency Trust (FIDE) signed an agreement to design and implement a system that allows to report, measure and verify energy savings in Honduras. The collaboration is an effective example of regional collaboration toward a sustainable future. The agreement aims to support Honduras and Mexico in removing 1.3 million incandescent and fluorescent lamps in homes that consume too much energy, replacing them with efficient light-emitting diode (LED) lamps. By promoting these changes, Honduras and Mexico could become more energy-efficient.

 

Laguna Verde Study Reveals What May be Ahead for Mexico’s Nuclear Power

The International Atomic Energy Agency (IAEA) has completed a review of the long-term operational safety at the Laguna Verde power plant in Veracruz, the only nuclear power plant in Mexico. Meanwhile, energy experts continue to debate whether increasing nuclear power generation could help transition to renewable sources of energy.

 

US$500 Million to Be Invested in DG Before End of 2022

In recent years, distributed generation (DG) in Mexico has slowly but surely consolidated its place in the energy sector. Although a potential rise in interest rates and the imminent arrival of an economic recession could be otherwise threatening to the industry, experts said that the use of DG for homes and businesses will see a further US$500 million investment in Mexico before the end of 2022.

The data used in this article was sourced from:  
Mexico Business News
Photo by:   Pixabay
María José Goytia María José Goytia Journalist and Industry Analyst