Natural Gas Combined-Cycle Power No Longer Eligible for CELs

A legal resolution has suspended CRE’s agreement that made natural gas eligible for Clean Energy Certificates (CELs). As previously reported by MBN, on May 26, 2023, CRE issued an agreement that categorizes natural gas generation in combined-cycle power plants as fuel-free energy, thereby approving it for Clean Energy Certificates (CELs). This agreement sparked controversy and raised concerns about the integrity of Mexico's clean energy program.

Three judges suspended the A/018/2023 agreement published by CRE, which classified natural gas as clean energy. The judges ruled that this agreement violates the Energy Transition Law of 2015, which stipulates that power generation from natural gas involves the burning of fossil fuels. As a result of the suspension, the agreement is on hold while the legal process continues.

Second District Judge Specialized in Administrative Matters for Economic Competition, Broadcasting and Telecommunications, Juan Pablo Gómez Fierro, considered that CRE's controversial agreement could have an important impact on the CELs market, immediately increasing the offer of clean energy. “By redefining the concept of clean energies to include combined cycle power plants (which operate with natural gas), CRE would allow these power plants to obtain Clean Energy Certificates (CELs), which could lead to an oversupply of certificates and result in a reduction of prices. Consequently, this could diminish the attractiveness of investing in renewable energies,” reads the resolution.

Avant Energías Renovables sought legal protection against CRE's agreement and its request was granted. Similarly, several different actors voiced their discontent following CRE’s agreement. The Mexican Solar Energy Association (ASOLMEX) and the Mexican Wind Energy Association (AMDEE) objected, asserting that considering natural gas a fuel-free energy could undermine the integrity of the program and lead to an artificial inflation of the clean energy share in the electricity system. A group of NGOs requested the reversal of CREs decision, arguing that its implementation threatens the right to a healthy environment.

The Citizen Energy Observatory (OCE) proposed to increase the installed capacity of nuclear electric generation and to disable old thermoelectric plants as alternative measures to CRE’s agreement. Heberto Barrios, Deputy Minister of Planning and Energy Transition, SENER, addressed the controversy and emphasized that SENER does not consider gas nor steam combined-cycle power plants as clean energy sources.