Supreme Court Disarms Energy Policy; New Initiative on the Way

Mexico´s Supreme Court has invalidated the government’s controversial 2020 energy policy, which is set to boost CFE and limit private participation. Nevertheless, a new initiative following has been sent to the Chamber of Deputies.

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Mexico

Mexico’s Supreme Court Rules Against Energy Policy

Following seven months of deliberation, Mexico’s Supreme Court (SCJN) invalidated the main pillars of an energy policy intended to boost state-owned CFE while restricting private participation in the industry. The matter was brought to court through the Federal Economic Competition Commission (COFECE). Controversial points, such as CFE’s participation in the development of guidelines and reliability criteria for the planning and operation of the National Electric System and CFE’s power to propose strategic infrastructure projects, grid modernization and removal of power plants, have all been disarmed, Forbes reported. On the other side, strengthening of the strategic planning of CFE and so-called ‘New Related Services’ linked to the operation of the National Electric System, necessary to guarantee reliability were kept intact.

Minister of Energy Rocío Nahle said the government respects the decision of the Supreme Court, just like it always has, and that it will respect the Chamber of Deputies’ decision regarding its new initiative to benefit CFE as well.

Government Prepares Initiative to Benefit CFE

President López Obrador has launched a “preferential initiative” to reform certain areas of the 2014 Energy Reform to benefit state utility CFE. Today, the coordinator of MORENA’s parliamentary group, Ignacio Mier Velazco, said the initiative was fast tracked to prevent CFE’s “extinction.” Industry experts consider the counter-reform to be an unwise move, as CCE signals it could open the door for indirect expropriation.

Ministry of Energy Releases Energy Sector Development Plan

Mexico’s Ministry of Energy has rolled-out its National Electricity System Development Program (PRODESEN) for the 2020-2034 period. In the plan, combined cycle and hydroelectric power generation through state-owned utility CFE are to form the base load of the country’s energy mix, which will grow in capacity by 6.8 percent by 2024.

CFE Issues Bonds to Finance Business Plan

CFE has issued two bonds totaling US$2 billion in North American markets, aiming at obtaining resources so it can refinance a bond that expires in late May, as well as financing its investment plan published last week, the state utility reported.

International

Denmark Reaches Political Agreement for a US$34 Billion Wind Project

Denmark has managed to reach a broad political consensus toward the construction of an artificial island in the North Sea, functioning as an energy hub surrounded by offshore wind turbines. This energy hub, a first in the world, could provide as much as 10GW of energy. Total costs of the largest construction project in Danish history are estimated at US$34 billion, reported Renewables Now.