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Sheinbaum puts CFE's US$23bn investment drive at heart of national energy plan

Bnamericas
Sheinbaum puts CFE's US$23bn investment drive at heart of national energy plan

Mexico’s state-owned power utility CFE will invest US$23.4bn in electricity generation, transmission and distribution in 2024-30 under the national energy plan unveiled by President Claudia Sheinbaum at her morning press conference on Wednesday.

Like her predecessor Andrés Manuel López Obrador (AMLO), Sheinbaum has put CFE in the driving seat of her strategy to increase the capacity of Mexico’s blackout-prone electricity system.

Under AMLO, CFE increased its share of generation from 28% in 2018 to its current level of 54%.

Emilia Esther Calleja, the utility’s CEO, said on Wednesday that CFE will invest US$12.3bn in generation, US$7.5bn in transmission and US$3.6bn in distribution during Sheinbaum’s six-year administration.

Sheinbaum said “a very significant part” of CFE’s investment in generation will be in renewable energy. 

Private operators

The national energy plan will limit the share of private power companies to the current level of 46%.

Energy minister Luz Elena González estimated on Wednesday that between now and 2030, the private sector will invest somewhere from US$6bn to US$9bn to add 6,4GW to 9,55GW of new renewable energy capacity in Mexico.

González also said that the government would increase the maximum capacity of a distributed generation project before a permit is required to 0.7MW from 0.5MW. 

These are normally solar photovoltaic installations used to power small industrial facilities. 

New permitting procedures will be established for distributed generation projects from 0.7MW to 20MW, which do not sell excess electricity to the grid and which are mainly used to provide power to industrial parks.

Larger electricity generators will be able to sell the power they produce directly to CFE using long-term contracts, González said.

They will also be able to sell power into the electricity market and participate with CFE in joint ventures, in which CFE will hold a stake of at least 54%.

Sheinbaum said that secondary legislation to be published in early 2025 will provide more details about energy market regulations and the role of the private sector.

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