Mexico Passes Energy Bill

Mexican Congress passed an energy bill that will change the distribution rules under which electricity is fed to the power system. Specifically, the bill prioritizes energy plants owned and operated by the Federal Electricity Commission, followed by solar, wind, and combined cycle stations owned by private entities. As a result, no new renewable energy projects are likely to be developed in the coming years, impacting Mexico’s ability to fulfill its commitments under the Paris Agreement and USMCA. Business organizations across the country have been vocal about their opposition, highlighting the impact to the energy sector and national economy.

Last year, the State of Baja awarded a bid for the development of a photovoltaic power plant. NextEnergy signed a 30-year contract to provide the state its own supply of electricity. The state’s current 3,040-megawatt demand often causes energy and water deficits, especially during the periods of high temperatures, forcing it to rely on private companies which results in volatile prices. Deficits have further increased over the summer due to a greater percentage of individuals working and studying from home during the COVID-19 pandemic. The solar plant project is estimated to decrease the energy deficit by 20-30%and help reduce electricity bills across the state. The federal government has so far declined to grant the necessary permits for the project to be implemented.