Transmission Fee Hike Escalates Public-Private Battle
Mexico’s CFE has hiked for transmission up to 800 percent, based on a report by El Financiero. The rise in costs applies to ‘legacy contracts’, which are private energy projects finalized before the 2014 Energy Reform. In other news, Mexico’s hydro system could benefit from small hydro and upgrades regarding storage. The renewable energy revolution has not reached the world’s major bank boardrooms yet and despite a good year, renewable energy falls short for climate change goals. Read all about it in your weekly energy roundup!
CFE Hikes Transmission Fees for Privates to 800 Percent
Yesterday, CFE hiked transmission fees up to 800 percent, reports El Financiero. The fees concern renewable energy companies with so-called ‘legacy permits’, which includes private energy projects that signed their contracts before the 2014 Energy Reform. The measure applies to fossil fuel-based energy generation, as well as renewable energy making use of cogeneration and wind. The hike comes two weeks after CRE’s approval of a CFE request to increase transmission costs.
Even though CFE has not specified the start date, transmission costs are to change to the following: For high tension, the fees increase from MX$0.049 to MX$0.27857, an increase of 469 percent. Medium tension fees increase from MX$0.049 to MX$0.2586, which represents a 428 percent increase. Finally, low tension fees were hiked over 800 percent, from MX$0.09799 to MX$0.8928.
Could Upgrades or Small Hydro Save Mexico’s Hydropower?
For now, hydropower remains at the forefront of Mexico’s clean energy generating capacity. Yet, other renewable projects, combined cycles and natural gas are quickly catching up. One disadvantage of hydro-based projects is the associated costs and the environmental impact of building a large power plant. Nonetheless, hydroelectricity might still have a future: upgrades to existing infrastructure and the potential of small hydro could make this form of energy generation relevant toward the future. Hydro is also perfectly positioned to fill in gaps left by intermittencies in the generation stemming from wind and solar. It can even be used to store renewable energy for later use. The trend of small hydro is specifically interesting, as its barely environmentally impacting footprint opens up a wide range of potential locations.
International
Renewable Revolution? Not Yet in Financial Boardrooms
Sustainable business is in fashion. Major worldwide banks are lending billions of dollars to green up their financing, meaning that renewable energy companies and other sustainability-focused businesses are more likely to get funded. On the other side, polluting companies are being cut back in their funding. However, financial boardrooms are still strongly tied to fossil fuel ventures, thus hindering the move toward a sustainable future, reports Bloomberg News. Green Finance, however, is becoming more and more of a global trend, as global business figureheads catch on.
Renewable Energy Experienced Great 2019 but Paris Agreement Goals Are Not Yet in Sight
It is true that renewable energy is big business. It is attracting large amounts of investments and developers are making decent profits with their clean energy projects, reports Axios. There is, however, the problem that it is not sufficient to meet the goals of the 2015 Paris Agreement. A report from the UN, the Frankfurt School and BloombergNEF, states the following: “Governments and companies around the world have committed to adding some 826GW of new non-hydro renewable power capacity in the decade to 2030, at a likely cost of around US$1 trillion. Those commitments fall far short of what would be needed to limit world temperature increases to less than 2°C. They also look modest compared to the US$2.7 trillion invested during the 2010-2019 decade.”
Nonetheless, the report provides a solution as well: if governments were to focus their post-COVID-19 economic recuperation plans on renewable energy instead of on fossil fuels, they can set themselves up for success regarding cleaner energy generation and a more sustainable environment.