Mexico Energy Bill Prioritizes State Hydro Power: Minister

(Bloomberg) -- Mexico’s government wants to prioritize hydroelectric power supplied by a public utility over privately owned wind and solar generation as the nation restructures its electricity network, Energy Minister Rocio Nahle said Monday. 

The country is seeking to cut private sector participation in electricity generation to 46% from 62%, Nahle said during a press briefing with President Andres Manuel Lopez Obrador. Hydroelectric power will be given priority, she said, followed by other Comision Federal de Electricidad (CFE) power sources like nuclear and natural gas. Renewable wind and solar power would be near the bottom of the list, beating out only natural gas from the private sector and coal.

Mexico’s government wants to roll back previous liberalization of the sector and expand the roles of state-owned Petroleos Mexicanos and CFE, a move proponents say will cut costs for consumers. The bill that Lopez Obrador presented to congress on Sept. 30 calls for a constitutional change to give more control over the power market to the state utility. It would also fold the country’s energy regulators into the state-owned producers they regulate. 

It’s unclear if the government has enough votes in both houses of congress to get the bill approved, and similar bills in the past have been blocked by courts. Even so, the effort is alarming Mexico’s wind and solar energy associations, which say it would violate pledges Mexico made under the 2015 Paris Agreement on climate change. 

The Energy Regulatory Commission, or the CRE, would be folded into the state utility under the government’s plans, Nahle said. 

(Updates with list of priority energy sources in second paragraph)

More stories like this are available on bloomberg.com

©2021 Bloomberg L.P.