Mexico’s CFE considers expanding renewables, investing in hydro modernization

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Mexican public power utility Comision Federal de Electricidad’s (CFE)  is studying plans to build 500 MW of renewable capacity, as well as modernize and overhaul eight hydroelectric units.

According to BNamericas, this news comes amid criticism of the firm’s focus on growing its generation park through new thermal units. CFE did not specify which kinds of renewable technology it was interested in.

The new capacity, as well as the hydroelectric unit work, would involve investments of 12.2 billion pesos (US$602 million) over the next five years.

With the announcement, CFE has shown the first sign of flexibility after its strict stance on the growth of renewable generation in Mexico, which CFE has largely opposed since a change in leadership after the 2018 elections. Since becoming chief executive officer of CFE, Manuel Bartlett has repeatedly criticized renewable energy due to its intermittent nature and has said renewable developers should be charged for the backup energy CFE must provide to ensure the grid’s reliability.

Earlier this year, Bartlett said the country’s renewable energy policy, deployed under previous president Enrique Peà±a Nieto, was “stealing from the nation.” But he has softened his stance, saying CFE “is not against clean energy” and must contribute to Mexico’s international commitment to curb carbon emissions. According to the executive, the focus of the state-owned player should be on natural gas generation, as well as growing its nuclear and hydroelectric portfolios.

Energy ministry Sener and grid coordinator Cenace have made several regulatory changes aimed at boosting CFE’s thermal and hydroelectric units by altering the normal dispatch priority, which favors renewables due to their low generation cost. They have also attempted to limit the ability of ongoing renewable projects to connect to the grid, as BNamericas reported previously.

In its five-year energy program, Sener said CFE’s transmission and distribution costs are too low and the operation of a growing number of privately owned renewables projects contributes to the company’s losses. It has concluded a key goal of energy policy should be to “rescue” CFE by protecting its central role in the Mexican energy market.

According to CFE, the company is deploying an environmentally conscious strategy through the construction of 4,550 MW of high-efficiency and low-emissions natural gas-powered capacity over the coming years. The firm also said it is reviewing its energy consumption to increase efficiency and will deploy charging stations in “strategic areas” to encourage the adoption of electric vehicles.

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