Mexico wants to review contracts awarded in energy auctions

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The Comisión Federal de Electricidad (CFE), which is the state-owned electric utility of Mexico, will review contracts awarded in the three energy auctions held by the Mexican government, according to a press release published by the company.

This unprecedented announcement was given yesterday by CFE general director, Manuel Bartlett Díaz. “We do not want to buy electricity, we want to generate electricity, it’s an aberration that we are forced to buy electricity from our competitors”, he said during a press conference. How and when the auction contracts may be changed was not explained.

Bartlett Díaz also refuted claims that the CFE is against clean energies, while also rejecting that the utility is moving towards increasing emissions in the country, as it has committed to use all sources of electric power generation. “The supporters of clean energy should not be worried, as we too are not against it, we are in favor of multiplying clean energies,” he said.

He also stated, somewhat ambiguously, that electric power generation through coal is a common process internationally, like the whole world, thus confirming that the CFE continues to consider coal a viable option for future electricity production. Bartlett stressed that currently only 9% of its power generation assets are using coal.

According to several Mexican media articles, in addition, Bartlett has also said during the press conference that the current prices for renewable energies are not real, while also citing their intermittency (a now obsolete argument against renewables) as an element to corroborate his thesis. “A whole campaign is being made that clean energies are the cheapest and it is a lie,” he said.

Bartlett also made a comparison with Spain and Germany and stressed that these two countries were forced to push for renewables as they had few coal resources (which in the case of Germany is completely false), while also claiming that in both nations electricity prices increased as a consequence.

The director of the CFE had also made it clear in mid-March that no more auctions would be held in the upcoming years, while the fourth energy action planned for the end for 2018 was canceled in January.

The three auctions the Mexican government held after it introduced the energy reform in 2015 saw the allocation of around 6 GW of solar power. In the third auction, the world’s cheapest solar bid of US$20.57 per MWh was recorded.