Mexico’s president wants more investment in fossil fuels and less private wind, natural gas, and solar power.
John Kerry, US climate envoy, said that the US wants Mexico and other countries to collaborate to increase renewable energy use in North America. He expressed concern about Mexican attempts to increase state control over electricity markets.
Kerry’s Wednesday visit came after Andres Manuel Lopez Obrador, the Mexican President, promised to continue with reforms to Mexico’s power sector. He said that Mexico would increase investment in fossil fuels and limit private wind, solar, and natural gas to a small market share.
Kerry stated that the US government is ready and able to help Mexico increase its use of electric cars and renewable energy as companies around the world intensify their efforts to meet climate goals.
Kerry stated that Mexico can play an extraordinary and vital role in our efforts against the climate crisis.
Kerry stated that what we want to do with Mexico is to work together in a way which will increase the market’s ability to be open and competive.
John Kerry, US climate envoy met with Marcelo Ebrard from Mexico City, Mexico. [Fernando Llano/AP Photo]Kerry’s trip comes amid rising tensions about Mexico’s plan to favor its state-owned electric company and limit foreign and private companies that have invested in renewable energies. Lopez Obrador has presented a bill that has been criticized for its potential to undermine wind and solar power investment at a crucial time for companies looking to increase their clean energy mix.
Lopez Obrador tried to downplay Tuesday’s frictions, saying that there are investment opportunities. We want to strengthen the CFE, Mexico’s state-owned Federal Electricity Commission.
The commission oversees the operation of plants that burn fuel oil or coal produced by Mexico’s state-owned petroleum company. It also manages some hydroelectric, nuclear, and solar plants.
The Mexican president is a strong advocate of government firms and fossil fuels, such as oil. He denied Mexico didn’t want clean energy and suggested that the US might provide funding to help him increase Mexico’s hydroelectric power production.
Lopez Obrador stated that the US government should reach agreements on investments to get low-interest loans at the same interest rates as they charge in the United States. This would be an investment in the environment.
Lopez Obrador suggested a constitutional amendment last year to limit the sale of private power generators, and favor Mexico’s state owned utility company. The bill is still in congress and requires a two thirds majority.
The plan guarantees the government electric utility a market share at least 54 percent, despite the fact that the US-Mexico Canada free trade pact prohibits local or government-owned businesses from being preferred [File: Marco Ugarte/AP Photo]October’s bill would repeal contracts that 34 private plants had sold power to the national grid. The bill would also make illegal 239 additional private plants that sell energy directly in Mexico to corporate clients. Nearly all of these plants are powered by renewable energy or natural gas.
This measure would also cancel many long term energy supply contracts and clean energy preferential buying programs, often affecting foreign corporations.
Private natural gas plants are almost at the bottom of the list, behind only government-coal-fired plants that have rights to sell electricity into grids. This despite the fact that they produce electricity at 24 percent less cost. Government-owned plants that use dirty fuel oil would be preferred over private wind or solar plants.
The plan guarantees that the government’s electrical utility will have a market share of at most 54 percent, even though the US/Mexico-Canada free-trade pact prohibits favoring local or government-owned businesses.
