Presidential candidate Gálvez proposes hiking permit threshold for Mexican power generators

Mexico’s leading opposition contender for the presidency, Xóchitl Gálvez, proposes making a substantial hike in the capacity of generators exempt from having to obtain permits, with the aim of boosting national generation capacity. 

Gálvez suggested increasing the threshold over which generators would need to request a permit to 10MW from the current 500kW, which would pave the way for a considerable increase in the installed capacity of small generators. 

“Why increase the exemption for generation up to 10MW? So you don't have to ask permission from the [energy regulator] CRE, which is corrupt," she said on Wednesday during a real estate event in Mexico City. 

She also proposed resuming energy auctions so the private sector can once again bid to sell cheaper and cleaner electricity to the State, adding that this is necessary for certain businesses that are not receiving much-needed clean energy from state-owned power utility CFE. 

The current legal framework forbids anyone from generating more than 500kW without a permit. But at the same time, obtaining licenses for power generation has become a challenge that only a few have been able to accomplish under the administration of President Andrés Manuel López Obrador. 

The restrictions are even tighter when it comes to renewables. Gálvez cited the example of a chicken farmer in Baja California who installed solar panels at his farm to supply his own demand, but the inability to generate more has prevented him from achieving his production goals. 

In December, one of Mexico’s biggest business associations, Coparmex, proposed a reform to the law to increase the permit exemptions to 1MW, amidst the nearshoring phenomenon that is bringing more companies to Mexico who are concerned about their greenhouse gas emissions.