Mexican government called on to reboot energy transition

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Mexico’s President Andrés Manuel López Obrador. Image: The White House/Wikimedia Commons

The Global Wind Energy Council (GWEC) and Global Solar Council (GSC) have called on Mexican lawmakers to prevent changes to the country’s Electricity Act, Ley de la Industria Electrica (LIE), which pose what they call “an unequivocal threat” to private investment in clean energy.

The groups issued a joint statement this week, responding to controversial reforms that Mexico’s lower house of Congress approved on Wednesday (24 February). Currently, the Federal Electricity Commission (CFE) has to buy renewable energy through auctions, but if the reforms are passed through the upper house, this would no longer be required.

Mexico’s President Andrés Manuel López Obrador pledged to change power dispatch rules last August, as part of an ongoing spat with privately-owned clean energy companies. In a memo issued to energy regulators, Obrador said the previous political regime’s energy reforms helped prop up “private businesses and corrupt politicians” and had provided “legal grounds for pillage”. It also claimed that state-owned operators in the country, such as the CFE, have been left in ruins as a result of the changes.

The renewables trade bodies said the change in policy “relegates renewable energy supply in Mexico” and would undo years of work on transitioning to clean energy resources. The International Renewable Energy Agency (IRENA)’s Coalition for Action has also signed the joint statement.

“Giving priority dispatch to state-owned utility CFE’s plants…undermines the principle of fair competition and puts Mexico’s climate commitments and investment environment at risk,” it said.

The statement asks Mexico’s lawmakers to reject the proposed adjustments to the LIE, highlighting the “damage already done” to the investment opportunities in the country’s renewables market. It also claims that passing the amendments could cost 17,000 jobs across the wind and solar sector, and create a “harmful ripple effect” across industrial and commercial industries already investing in clean energy.

Gianni Chianetta, chief executive of GSC, said that wind and solar “bring significant benefits to the environment and global climate commitments” and notes that costs have become highly competitive with fossil fuels in recent years.

“The global solar industry calls on the Government of Mexico to urgently adopt policies that favour the transition to clean energy sources,” she said, “which would benefit its citizens, its economy, solar businesses operating in the country and the world’s climate.”

Mexico’s current regime stepped up attempts to block renewables companies last year when the power market operator CENACE suspended commissioning and testing of built projects, citing stability issues. The renewables sector promised legal action, and a Mexican judge later granted the sector reprieve in May. A handful of Canadian solar companies went on to send a letter to their own government officials expressing their concern over project delays in the country. Developer Neon claimed at the time the delays could cost the company millions of dollars per month.

1 February 2022
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