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Mexico Set to Reshape Power Sector to Favor the State

  • March 07, 2021

She added, “He wants to bring private producers to their knees, and we are seeing this in the most absurd ways.”

Jeremy M. Martin, vice president for energy and sustainability at the Institute of the Americas, a public policy think tank in San Diego, said the legislation probably resonates with Mr. López Obrador’s supporters, who have been made to feel that they finally have a president who is putting Mexican people first.

“It doesn’t make any economic sense, but it makes a great deal of sense to people who feel they’ve been screwed for years in Mexico,” he said. “It’s pure ideology, it’s political.”

The legislation would rewrite the rules governing the electricity sector. Among other changes, it would alter the so-called dispatch rules that govern the order in which plants feed their power into the nation’s grid, giving greater priority to plants run by the state electrical company, the Federal Electricity Commission.

The energy market liberalization approved in 2014 by the Mexican legislature prioritized low-cost power generation, which increasingly favored solar- and wind-generated power plants, inspiring a surge of private investment — from Mexico and abroad — in the renewables sector.

But the new legislation effectively restores preferences for state-run, fossil-fuel-driven plants that generate power at higher costs and produce greater carbon emissions.

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