Mexico announces plans for 13 GW of new generation capacity – but no renewables in sight

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The new board of Mexican utility CFE has approved a plan to expand generation capacity with 13 GW of new facilities owned and operated by the company – with none of the new plants incorporating renewable energy.

CFE director-general Manuel Bartlett said the plan complies with instructions from Mexican president Andrés Manuel López Obrador and is intended to reverse the decline of CFE and address alleged corruption at the state-owned entity. “The CFE will once again be a company of national pride,” said Bartlett.

The utility will start by resuming power generation at five facilities, only one of which has been officially named: a 750 MW thermal power plant in Salamanca, in the state of Guanajuato. “The main goal of this project is to generate [power for] the minimum price and not only to think about the commercial profitability of the plant,” the company said, without providing further details.

Financial newspaper MiBolsillo, meanwhile, revealed the Salamanca plant – idled in late 2017 – will be converted into a combined cycle facility. The Mexican newspaper says the same conversion will take place at another thermal plant in Tuxpan, in the state of Veracruz, which the previous regime had intended to convert into a gas facility.

MiBolsillo claims the remaining three generation projects referred to in the CFE plan will be new power plants in San Luis Río Colorado, in the state of Sonora; in Lerdo, Durango state; and in another, unspecified location in the state of Baja California. All of the facilities will be combined cycle gas power plants, according to the local journal. It was further reported, the five projects will have a combined generation capacity of 2.76 GW and will require investment of $2.4 billion.

No renewables in sight

No mention was made in the CFE statement, or by the Obrador administration, of a plan to add new renewable energy generation capacity.

On the contrary, Bartlett in late March said the CFE intended to review the contracts awarded in three energy auctions held by the previous government. “The supporters of clean energy should not be worried, as we too are not against it, we are in favor of multiplying clean energies,” the director-general said at the time adding, the CFE was committed to using all sources of electric power generation.

That reassurance may have rung hollow, however, given Bartlett had announced earlier in the month no more clean energy auctions would be held in the immediate future. The fourth energy action, planned for the end for 2018, never took place and was eventually cancelled in January by the new administration.

The three procurement exercises the Mexican authority held after the introduction of energy reforms in 2015 led to the allocation of around 6 GW of PV capacity. In the third auction, the world’s cheapest solar bid – $0.02057/kWh – was recorded.