Mexico Already Favoring Dirty Fuel Sources over Clean

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Although Mexican President Andrés Manuel López Obrador’s (AMLO) controversial electricity reform bill — which would favor the use of contaminating fossil fuels over cleaner renewable alternatives — has yet to pass Congress, the state-run Federal Electricity Commission (CFE) is already prioritizing the distribution of electric power from its own plants over private sources, even though the resulting energy is more expensive, according to a report released earlier this month by the Independent Market Monitor (MIM).

Based on data from 2020 (the latest available), the MIM said that energy sourced from inefficient government-owned plants increased by 32.1 percent over the comparable figure for  2019, representing12,693 megawatt-hours.

“You can see a preponderant role of the CFE in energy production,” the report read.

“On average, 93.1 percent of the additional energy production came from CFE generation in 2020, while 6.9 percent was from other market participants.”

Using otherwise-out-of-commission power plants to supplement additional demand, the CFE spent more to activate these production centers than it would have to purchase the same energy from private sources.

The MIM also warned that the decision to activate these dormant plants was made without informing the general public, thus avoiding accountability.

“This is a policy that is not very transparent and has been left to the discretion of the operator,” said Arturo Carranza, an expert in the energy sector.

“The decision could have a technical justification, but the government has not decided to make it transparent.”

It also eliminates fair competition within the energy sector, he said.

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