On November 6, 2024, the Secretary of Energy, Luz Elena González, and the General Director of CFE, Emilia Calleja, presented the National Electric Sector Strategy (the “Strategy”). The Strategy follows the publication of the constitutional reform in strategic sectors, which, among other things, returns the nature of public entities to the Federal Electricity Commission (“CFE”) and PEMEX.
The following elements stand out from the content of the Strategy:
1. During the next six months, the following changes will be made regarding CFE, among others:
- Horizontal and vertical integration to take advantage of economies of scale.
- Implementation of a new operational and functional structure.
- Improve financial capacity and promote new investment instruments.
- CFE will resume sector planning and will have prevalence, maintaining at least 54% of generation, without detailing what should be understood by prevalence.
2. Energy Policy:
- CFE will resume sector planning and will be in charge of the reliability of the National Electric System.
- CFE investment plan of USD$23.4 M: USD$12.3 M in generation, USD$7.5 M in transmission, and USD$3.6 M in distribution.
- The Energy Regulatory Commission (“Comission”) and the National Center for Energy Control will maintain their technical independence - noting that the Commission would become part of the Ministry of Energy according to the constitutional reform bill for administrative simplification that is being discussed in Congress.
3. New Figures for Private Investment:
- Private participation will be allowed with a percentage of up to 46% in electricity generation, which could add between 6.4 and 9.55 GW of installed renewable capacity by 2030.
- Private generation will be allowed under six new schemes:
- Distributed Generation: the limit will be increased to 0.7 MW (permit exempt generation).
- On-site Generation: between 0.7 MW and 20 MW without injecting surpluses into the grid and for self-consumption.
- Self-consumption Generation with grid injection: through the payment of grid usage fees.
- Delivery of Energy and Capacity to CFE: through long-term contracts.
- Mixed Producers: where CFE must have at least 54% participation.
- Generation for Sale in the Electric Market: complying with reliability and backup requirements.
- Regarding legacy projects, it is noted that self-supply projects that do not pay for the use of the grid, that have obtained a favorable amparo ruling, or that sell their energy through an illegal market, must migrate to one of the previous schemes.
The Strategy is a conceptual document, and to understand the details of its implementation, it will be necessary for the bills to amend the implementing legislation to become known.
For any questions or comments, do not hesitate to contact our expert team.
.svg){kind=small}
