Acquisition of Iberdrola Mexican assets sparks hope among renewable developers

Mexican energy association AME has said it expects the high-profile purchase of Iberdrola's assets in the country to signal the start of a new attitude towards development of renewables in the country.

In a release, the association said it "valued the constructive attitude that resulted in this agreement" and said it was available for "open dialogue between the public and private sector" to foster investment in the country's energy sector.

"AME celebrates that the deal struck by the government will represent a new stage in which the private sector is welcome to invest in the development of renewables in the country, under the state's tutelage," as stated by Mexico's finance ministry after the preliminary deal was signed, the trade group said.

"The private sector can provide its experience, technological, financial and human resources, to increase installed capacity in the country, and contribute towards a dependable, accessible and sustainable energy supply, allowing it to attract investment and improve the efficiency and competitiveness of our national industry," AME said.

The association's members have combined generation capacity of 33GW, accounting for the majority of privately-owned capacity in Mexico.

Mexico's finance ministry unexpectedly included the statement that it welcomed private investment in developing renewables in its breakdown of the US$6bn purchase by a public-private trust fund of 8.5GW of Iberdrola's assets in the country. That was surprising, as it contradicts Mexico's recent policy towards renewables, which has been seen as hostile to the development of privately-owned utility-scale assets.

Iberdrola itself said the sale, which would rid it of most of its thermal capacity in the country, was expected to improve its relationship with regulator CRE and clear the way for the development of 6GW in renewables assets.

The government's unfriendly stance towards private renewables, however, has been consistent throughout the presidency of Andrés Manuel López Obrador, and has involved a range of actions by CRE, grid control center Cenace, public utility CFE and energy ministry Sener. Many renewables developers have postponed the development of projects until after the presidential election in 2024 in the hope of possible changes.

The administration's announcements regarding solar power growth in Sonora state and wind growth in Oaxaca are all focused on CFE-owned plants, which will be contracted out to private players.