Mexico's Government Attack on Renewables

The direct explanation of why CFE and the Mexican government is attacking the energy industry in general lies with the Energy Reform.

The reason is that with the division of CFE into several separate units and companies, CFE Generacion, CFE Transmision, CFE Qualified Users and the separation of CENACE have caused the CFE to be insolvent and citizens have to pay, as always, for government decisions.

The poor performance of CFE, the tax burden, and with the unskilled personnel of the company caused that the Reform has been very, very poorly implemented, generating absurd costs for the industry and for the same commission in December 2017 when it was implemented. already directly on the clients.

The unions were useless at all this time, the CFE and its staff were left behind, and they were never supported in anything to make it modernize, the only state and on which the national electricity grid is modeled is Baja California, reason for which, during the implementation, the best were brought to Mexico City, specifically from Mexicali to Mexico City.

CENACE plays a central role in this story and tragicomedy, within the reform he was appointed as the administrator of the Wholesale Electricity Market, and CRE became the regulator.

During the reform, Clean Energy Certificates were designed, and renewable energy projects in Mexico were on the rise, since quotas were also established for the industry to meet the percentages of consumption of energy from renewable sources. In other words, if a company does not have a renewable energy source or does not consume it from a renewable source, it will have to buy these certificates, contrary to the fact that if it had clean generation on site, they will be granted these CELs.

So we return to the heart of this matter, the CFE does not have renewable energy sources, private companies began to displace consumption, so CFE is running with a lot of unused generation capacity, or what is known as idle capacity. Imagine the scale of the loss if the shares of CELs in the coming years will reach 13.9% by 2022.

And what did the so called fourth transformation do?

Well, the easiest thing is to attack private companies, lying, hiding their true reason, which is this fear of the enormous losses that are coming.

Everything is documented in the Official Gazette of the Federation in countless documents and rules that were established for the operation of the Market.

The options that CFE has are few, it is going to have to swallow the issue by its own negligence. What you have to do is negotiate with the union and reduce your workforce, reduce your costs, and do what a normal company in any part of the world does, acquire debt, sell part of the company, and go public. to capitalize, act as a real company, which does not mean profiting and taking advantage of customers.

In general, this has always been the reason that the governments that created and defended the nationalization of the electricity industry by President Adolfo Lopez Mateos have preached, and that today with the opening of the half-hearted energy reform that neither privatized nor gave him the CFE's ability to improve will be a tragedy for clients as costs are passed on to them.

Mexico is in very bad shape, and recognizing it is the beginning to improve it, PEMEX and CFE are taking very negative steps, and with the government that does not understand capital reasons, economy, negotiating with businessmen; will cause this ship to sink hopelessly.

The government has to understand what it wants. I understand the country model they want but with so many mismanagements in all past governments, including this one, and with such deplorable figures that it was brought in from the other parties, one questions the capacity they wil have to really improve the country.

Hopefully, this government would be more pragmatic and will really focus on strengthening the country, generating the necessary conditions for us to return to being a country more open to its own citizens, dividing oligopolies and oligarchies, both state and private, those mafias that inhibit the national growth, we want more banks, more telephone companies, more CFEs in each city, more Pemex in each state, divide national unions into local unions.

The division of power to regulate power is fundamental, comes from any ideological, economic and political current. The human being tends to conquer and dominate himself with power, that tireless worm that Pepe Mujica says that we have is what makes power so exciting but equally tragic for the one who yields to it. Our power-hungry president will know how to control himself or let this People whom he says so much to want to improve fall before the misfortune of the crisis that is coming to us at a global level.

The best thing is to divide, divide and overcome the misery in which we find ourselves, to divide the power of the monopolies whether they are of the state or private, to really compete, to become more competitive as a country, and to create the bases for a more plural and just business class; and a more focused government.


15 views0 comments
  • Facebook
  • Twitter
  • YouTube
  • Instagram
  • LinkedIn

© 2020 Valqus. Intraomega S. de RL de C.V. All rights reserved. Valqus refers to the Valqus Trademark and/or one or more of its member firms and individual partners, each of which is a separate legal entity.