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2.1 energy [r]evolution 2010 – mexico energy policy brief
legal and institutional context in the power sector
legal framework Mexico’s Constitution (Article 27) places sole
responsibility of electricity generation into the hands of the Federal
state. Moreover, the Federal Commission for Electricity (CFE) -
state-owned enterprise and responsible for two-thirds of Mexico’s
energy generation and transmission, as well as the planning for
energy provision-, is bound by this article to provide energy at the
least-cost option. While the Ministry of Energy (SENER) could in
theory specify how to interpret this clause, it has in the past
adopted a very narrow definition based solely on financial variables.
This has favored the development of conventional sources of nonrenewable
energy, especially gas and coal, whose use for electricity
generation is expected to rise by 67% and 27% respectively by 2024. 10
The amendment of the law on public power supply of 1992 and the
related regulations confirmed the sole right of state enterprises to
supply electricity 11 , i.e. the right to transmit and distribute electricity
and to sell electricity to final consumers. The amendments opened new
opportunities for the private sector to invest in power generation, in
the wake of a substantial decline in public investment in the power
sector at the end of the 1980s. Private enterprises are now able to
engage in the following activities: self supply, cogeneration of
electricity and heat 12 , operation as small producers (< 30 MW) or as
independent power producers 13 , the export and the import of electricity
for their own use. As a result, considerable investment from the private
sector has been successfully mobilized in recent years.
government institutions The guidelines on energy policy and future
strategies as well as projections for the power sector are drawn up by
the Ministry of Energy (Secretaría de Energía – SENER), while the
Ministry of Finance (Secretaría de Hacienda y Crédito Público)
oversees tariff policy. All plans to expand CFE’s supply capacity must
be approved by the Ministry of Energy. It can issue directives for calls
to tender to include independent power producers. Power purchase
agreements concluded in the course of tendering procedures are for
terms of 20 to 25 years. All electricity generating facilities belonging
to self-suppliers and Independent Power Producers (IPPs) must be
approved by the Energy Regulatory Commission (Comisión
Reguladora de Energía – CRE), which is subordinated to the Energy
Ministry and is also responsible for the regulation of the gas sector. 14
By May of 2010 CRE had granted 684 power generation licenses all
in all, covering a total of 24,017 MW. 15 Of these, 670 plants (almost
98%) were in operation, with a total capacity of 19,144 MW. Most
of the 2% left entitled wind energy projects.
The institutions involved in energy conservation or efficiency efforts are
the National Commission for the Efficient Use of the Energy 16 (Conuee)
and CFE through the Trust Fund for Electricity Savings (FIDE).
market actors
state-owned power utility (CFE) Since nationalization in 1960,
almost the entire power sector in Mexico has been dominated by
the state providers Comisión Federal de Electricidad (CFE), which
currently has some 33.9 million customers (2010). CFE either own
the power stations itself or conclude longer-term power purchase
image A WORKER ASSEMBLES WIND
TURBINE ROTORS AT GANSU JINFENG
WIND POWER EQUIPMENT CO. LTD. IN
JIUQUAN, GANSU PROVINCE, CHINA.
agreements with private operators CFE meets approximately 67%
of aggregate national power demand. 17 By May 2010 CFE had a
capacity of 51,121 MW (including IPPs). 18
independent power producers By August 2010 there were
already 71 power stations being operated by IPPs. 19 Output and
power generation by self-generators and independent producers in
2009 accounted for almost 33% of the figures quoted by CFE,
underlining the importance of this sector for the Mexican electricity
supply industry.
small producers Small producers are defined by the electricity law
as projects with a capacity of less than 30 MW whose electricity is
sold to the public utilities. A small producer could generate
electricity without needing to win a bid, and it would then be paid a
percentage of the short term marginal cost of the energy, but no
capacity payment. There is no small producer operating in Mexico.
self-suppliers Besides CFE, which are vertically integrated, and the
independent power producers, which solely serve the purpose of public
supply for CFE, other actors in the Mexican electricity market are
engaged in self-supply projects and for export. Self-suppliers projects
account for almost 7% of total installed capacity. A large proportion
of these self-supply projects are owned and operated by the stateowned
oil company Pemex, with about 4% of all electricity
production 20 , and private producers (3%). Industrial, commercial and
municipal self-supply is also permitted. In every case, however, the
power purchaser (i.e. a municipality, for example) must have at least a
pro forma involvement in the company generating the power. It is also
possible to make use of the public transmission grid if the generation
location is some distance away from the place of consumption. A
number of enterprises can also found a joint subsidiary for the
purposes of self-supply. Optionally, any electricity not used for the
producer’s own purposes at the time of generation can be sold to CFE
at 85 % of the short-term marginal costs. In recent years there has
been considerable growth in self-supply in the service sector.
references
10 ELECTRICITY SECTOR OUTLOOK 2009- 2024 (PERSPECTIVA DEL SECTOR ELÉCTRICO
2009 – 2024). CURRENTLY, GAS REPRESENTS ABOUT 58.5% OF TOTAL GENERATION AND
COAL ABOUT 18%, WHILE 23.5% OF GENERATION ARE PRODUCED BY OIL COMBUSTION.
HTTP://WWW.SENER.GOB.MX/WEBSENER/RES/PE_Y_DT/PUB/PROSPECTIVA%20SE%20200
8-2017.PDF
11 LEY DEL SERVICIO PÚBLICO DE ENERGÍA ELÉCTRICA, DIARIO OFICIAL DE LA
FEDERACIÓN DEL 23 DE DICIEMBRE DE 1992; REGLAMENTO DE LA LEY DEL SERVICIO
PÚBLICO DE ENERGÍA ELÉCTRICA, DIARIO OFICIAL DE LA FEDERACIÓN DEL 31 DE MAYO
DE 1993.
12 COGENERATION OF POWER AND HEAT IS MAINLY EMPLOYED IN THE MEXICAN OIL
INDUSTRY (PEMEX).
13 ONLY PLANTS RATED AT MORE THAN 30 MW WHICH GENERATE POWER SOLELY FOR SALE
TO CFE OR FOR EXPORT ARE CLASSIFIED AS INDEPENDENT POWER PRODUCERS (IPPS).
14 THE TASKS ARE DEFINED IN THE LEY DE LA COMISIÓN REGULADORA DE ENERGÍA,
OCTOBER 31ST, 1995 (MOST RECENTLY AMENDED VERSION OF JANUARY 23TH, 1998).
15 RESPECTIVELY, IMPORTATION AND EXPORTATION LICENSES ACCOUNT FOR 228 MW
AND 2,780 MW. IN TOTAL, CRE AUTHORIZED A TOTAL OF 27,026 MW. SEE:
HTTP://WWW.CRE.GOB.MX/DOCUMENTO/1565.PDF
16 THE FORMER NATIONAL COMMISSION FOR ENERGY CONSERVATION (CONAE) BECAME
CONUEE AFTER THE LAW OF SUSTAINABLE USE OF ENERGY HAS CAME INTO EFFECT
(NOVEMBER 28TH, 2008).
17 GROSS POWER GENERATION IN 2009 TOTALED 230.64 TWH, INCLUDING SUPPLIES
FORM INDEPENDENT PRODUCERS. SEE:
HTTP://WWW.CFE.GOB.MX/QUIENESSOMOS/QUEESCFE/ESTADISTICAS/PAGINAS/INDICADO
RESDEGENERACI%C3%B3N.ASPX
18 INDEPENDENT POWER PRODUCERS ACCOUNTED FOR 11,457 MW OF THIS. SEE:
HTTP://WWW.CFE.GOB.MX/QUIENESSOMOS/QUEESCFE/ESTADISTICAS/PAGINAS/INDICADO
RESDEGENERACI%C3%B3N.ASPX
19 HTTP://WWW.CFE.GOB.MX/QUIENESSOMOS/QUEESCFE/LISTADOCENTRALESGENERADORAS/
PAGINAS/PRODUCTORESINDEPENDIENTES.ASPX
20 PEMEX ALONE HAS AN INSTALLED POWER STATION CAPACITY OF 2,100 MW.
© GP/MARKEL REDONDO
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