On February 11, 2019 President Andrés Manuel López Obrador announced in a press conference the strategy that the electricity state-owned company will follow the next six years. After the cancellation of the fourth long-term electricity auction and the Ixtepec-Yautepec Transmission Line, the clean energy industry is under a wait and see environment, where policy remains as the key driver for further movements.
According to López Obrador, CFE produced the whole share of the country’s electricity consumption 40 years ago. “To date, CFE only generates half of what is consumed. Particular companies are the ones that supply energy at very high costs,” he added. In various occasions, the president has made the commitment of not increasing electricity prices in real terms for the end-use consumers. “This is my commitment and we are going to accomplish it. But we want the help of the private, national and foreign sectors,” he said.
Derived from the three long-term electricity auctions that took place between 2015 and 2018, 78 power plants were awarded. The investment made in these projects equals to US$9 billion and 93 percent of this capacity comes from clean technologies. “We are encouraging the companies that have contracts with CFE to celebrate a common agreement, to revise contracts and come to an agreement where electricity prices would not increase,” said López Obrador.
PROJECTS IN THE SPOTLIGHT
Huexca Themoelectric Plant
López Obrador opened the conversation with Huexca’s thermoelectric plant. This power facility is located in the municipality of Huexca, in Morelos. The 647MW plant, owned by CFE, has been non-operational since its construction in 2009. The president aims to conduct a public consultation to start operations as according to him, this plant could power the whole state.
“The gas pipeline that was constructed for this plant belongs to a private company. It travels from Tlaxcala to Morelos, passing through Puebla. There is an investment through the Pidiregas mechanism of more than MX$20 billion,” said López Obrador.
The main reason behind the project’s shutdown are the protests against the related works of the pipeline construction. The project requires large amounts of water that could be obtained from Cuautla’s river stream. On the other hand, the gas pipeline passes through a seismic region that is closely located to Popocatepetl volcano. The pipeline that will supply natural gas to power the plant is missing only 150m to reach the connection.
“We have seven gas pipelines that are being paid for by the government and do not have a plant to generate power,” said López Obrador. According to Bartlett, the companies that own these pipelines are Carso, IEnova and TransCanada.
The 60 Hydroelectric Power Plants
“In this past period where preference was given to private companies, CFE’s infrastructure was abandoned. The 60 hydro power plants were neither utilized nor modernized,” said López Obrador. The National Electricity Plan aims to fully support this segment. According to Bartlett, CFE holds 12,642MW from hydropower sources that produce an energy output of 30TW. But as the hydro power capacity will be increased, transmission and distribution infrastructure need to be reinforced to communicate generation points with consumption ends, mostly in the Grijalva basin.