Sheinbaum's pick to head CFE points to pragmatic energy policy

With the appointment of Emilia Esther Calleja Alor as CEO of state-owned electricity company CFE, Mexican president-elect Claudia Sheinbaum has burnished her credentials as pragmatic and raised hopes that the country will implement more level-headed energy policies.

Calleja will be the first woman to run CFE, which was founded in 1937. An electrical engineer by training, she has worked at the company for 21 years, most recently as head of a generation subsidiary.

She replaces Manuel Bartlett, a combative career politician who was a close ally of outgoing President Andrés Manuel López Obrador (AMLO) and a hardened opponent of private investment in the energy sector. 

Following the appointment of Luz Elena González as energy minister in June, Calleja is the second relatively unknown woman to be tapped by Sheinbaum for a leading role in Mexico's energy industry.

"CFE had a hard glass ceiling to shatter," Veronica Irastorza, senior managing director at FTI Consulting and a former undersecretary of energy planning and transition, told BNamericas. "I think it's good news that she has a technical profile and isn't a politician."

"I believe that the appointment is positive since Emilia has worked at CFE for many years and knows the challenges and areas of opportunity of the company," Israel Hurtado, a former energy regulator and the founder and CEO of hydrogen and sustainable mobility association H2 México, told BNamericas. 

"Her academic training adds technical knowledge that I believe can strengthen CFE's operations," he added. "For the first time three women will direct energy matters in Mexico and that alignment can be beneficial." 

A challenging time

Calleja is taking over the job at a critical time for Mexico's energy industry.

During a heatwave in May the country suffered widespread blackouts, which analysts say were the result of years of underinvestment in generation and transmission. Mexico's power demand is rising rapidly, partly driven by the nearshoring boom, and CFE alone does not have the financial resources to increase electricity supply to meet the requirements.

The AMLO administration capped the private sector's share of generation at 46% and Sheinbaum has said that her government will persist with this policy.

In a brief statement at a press conference on Monday, Calleja said she would maintain the outgoing administration's focus on energy sovereignty.

"We will continue to strengthen the 54% share that CFE has in the generation market," she said. 

Sheinbaum said that the government will look to find new ways of financing investment in power generation.

"We will continue to invest in generation with 'noble' financing mechanisms that do not impose debt on the company or the country," Sheinbaum said at the press conference. "Rather than increase the budget, these are mechanisms that enable continued investments."

CFE will commission about 9,000MW of new capacity in the coming years, Sheinbaum said.

As well as increasing generation capacity, CFE under Calleja will need to invest significantly in new transmission and distribution infrastructure, where CFE still holds the monopoly.

Renewable energy and gas

The new CEO will also have to repair relations with private clean energy developers and accelerate Mexico's energy transition, which stalled under AMLO and Bartlett. 

Calleja has direct experience of solar power projects. In her previous position at CFE, she was involved in the 18MW photovoltaic installation that Sheinbaum installed at Mexico City's central food market when she was mayor.

As well as the opportunity to increase solar power, Hurtado at H2 México noted that CFE also plans to add generation capacity using green hydrogen to help meet Mexico's environmental commitments. "We hope that industry can cooperate with these targets."

At the same time as pursuing renewable energy goals, Calleja will need to support the growth of Mexico's natural gas infrastructure and provide nearshoring investors with the natural gas they need.

Gonzalo Monroy, energy consultant and managing director of energy consultancy GMEC, said in a social media post that while Calleja seems to be more oriented towards electricity, the major growth opportunity for CFE will be in natural gas. 

"It is too soon to know if there is a major change in energy policy but at least it is a very refreshing change to have a technical profile after weeks of speculation about political profiles, some of which would have been frankly disastrous," he added.

The new administration takes office on October 1.