CFE directly awards another 5 power plant contracts

Mexico’s state power company CFE issued direct awards on five projects expected to add 2.26GW of installed capacity to the national grid for investments totaling US$1.74bn, according to a company presentation.

The move is the latest from CFE in opting to advance with projects via through direct awards after open tenders were met with a palpable lack of interest in late 2021.  

Asked about the awards announced on Thursday, Víctor Ramírez, spokesperson for Mexican energy transition think tank PMCE, said, “There wasn’t much interest from companies. Some of the tenders they're talking about were already declared void. 

“I think [CFE CEO Manuel Bartlett] has gone overboard with these attacks on private companies, and this is fostering mistrust,” Ramírez added, speaking at the 2022 Mexico Solar Summit event in Mexico City.

The result, he said, is “they end up having to make these direct awards.”

Bartlett has been a primary advocate for Mexican President Andrés Manuel López Obrador's (AMLO) constitutional reform initiative, now being discussed in congress, which would, among other things, eliminate all current power purchase agreements and establish CFE as a self-regulating, sole buyer of power nationwide. 

In recent months, speaking in support of the package, Bartlett has likened private players and particularly Spanish power company Iberdrola to thieves and raiders who take advantage of the Mexican people and their resources, and has done little to distinguish responsible private players from those the CEO has labeled “illegal” and “fraudulent”.

CFE awarded Finland-based Wartsila contracts to build two internal combustion engine power plants: the 429MW CCI Mexicali Oriente plant in Baja California state and 202MW CCI Parque Industrial, to be built in Sonora state. 

The other three are combined cycle plants: CCC San Luis Potosí (442MW) in the state of the same name and the 932MW CCC Salamanca plant in Guanajuato state, both awarded to Mitsubishi Power; and finally CCC El Sauz ll (256MW) in Querétaro state, with the contract going to TSK and Siemens Energy. 

These represent five of the eight projects CFE outlined in its 2022-2026 business plan to be financed via its conventional generation fund, as shown below.

SOURCE: CFE

The specific investments are as follows: US$282mn in CCC El Sauz II, US$577mn in CCC Salamanca, US$338 in CCC San Luis Potosí, US$369mn in CCI Mexicali Oriente and US$169 in CCI Parque Industrial.

These follow direct awards in late February for expansion and construction of six combined cycle plants made to Siemens Energy and Mitsubishi Power after the failure of earlier attempts at open tenders.