Iberdrola’s wind farm in Guanajuato. Photo: Google

By MARK LORENZANA

Mexico’s Energy Regulatory Commission (CRE) prevented Spanish energy company Iberdrola from operating a wind farm in the central Mexican state of Guanajuato. Iberdrola had invested a total of $150 million in the wind farm.

According to the CRE, its decision to stop the wind farm’s operations stemmed from a breach in permit that originally allowed Iberdrola to build its plant in the Villa de Reyes municipality, in the state of San Luis Potosí. The CRE granted Iberdrola a permit in 2015, with the understanding that the Spanish firm would supply energy to local companies in the area such as Gamesa, Sabritas, Pirelli and Maizoro.

Iberdrola, however, requested the CRE in May 2019 to change the permit to allow the energy firm to move the project to San Felipe, Guanajuato, and argued that the land in San Luis Potosí was leased to a third party.

In March 29 of this year, the CRE denied Iberdrola’s request, and invoked the Electricity Industry Law (LIE), which expressly prohibits authorizing changes of location from one municipality to another. The CRE said that Iberdrola would have to request a new permit for its wind farm to operate in Guanajuato.

For its part, Iberdrola said that it was still the same project, that the plant would continue to have the same generation capacity regardless of location.

Iberdrola requested an injunction against the interruption of its operations, but the hearing, which will determine the resolution of the case, was set for Sept. 5 of this year, said Judge Ramón Lozano. Lozano admitted that he did not suspend the CRE order to stop the operations of Iberdrola’s wind farm.

Mexican President Andrés Manuel López Obrador (AMLO) has tried to block Iberdrola from renewing its energy permits. Also, in January of this year, according to a report by the Wall Street Journal, the Mexican government forcibly shut down Iberdrola’s gas-fired power plant in Monterrey, the capital and largest city of the northeastern state of Nuevo León.

In 2020, while addressing economic analysts, Ignacio Sánchez Galán, chief executive officer of Iberdrola, said the energy company would cease further investment in Mexico.

“If they say they don’t want foreign investment, then we won’t invest,” Sánchez Galán said.

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