Secretary of Energy, Luz Elena González, Ensures Continuity of Private Sector Participation
The Secretary of Energy, Luz Elena González, has assured that Mexico’s electricity market with private sector participation remains intact. This includes auctions where the Federal Electricity Commission (CFE) can purchase energy or clean energy certificates, a practice that began during Enrique Peña Nieto’s administration.
Private Companies and CFE Contracts
During President Claudia Sheinbaum’s morning press conference, González clarified that the new regulatory framework clearly outlines private sector participation mechanisms and respects all existing valid contracts. Private entities can engage through various means, such as selling energy to the CFE.
“Companies can indeed establish contracts with the CFE, selling them energy,” González explained. “The current law permits this energy sale by independent producers.”
Maintaining Existing Contracts and Rights
González further elaborated that independent producers can build plants to sell energy to the state-owned CFE. However, a new legal provision allows the CFE to decide whether to retain the plant at the end of the contracted purchase period, marking a shift from previous models.
Additionally, private entities continue to hold autogeneration permits. González emphasized that contracts, rights, and specific rules for each participation method are outlined in the new regulatory framework.
Auctions in the Market
As part of activating the existing market, the National Energy Control Center (Cenace) conducted three long-term supply auctions before 2018 for energy, power or capacity, and Clean Energy Certificates (CEL) acquisition by the CFE as a basic service supplier within the wholesale electricity market (MEM) to sell to high-consumption users exceeding 1 megawatt.
According to the CFE’s annual report, by the end of 2024, CFE as Basic Service Supplier achieved coverage contracts for 19,000 gigawatt-hours (5.4% of the current national generation, as Mexico produces 350,000 gigawatt-hours; and 7.6% of CFE’s generation, which reached nearly 250,000 gigawatt-hours in the latest report), along with 20 million CEL and 1,727 megawatts of power through 60 electricity plants. This totals a combined installed capacity of 8,692 megawatts, exceeding 9% of the national installed capacity since 2017.
CFE’s Participation
As the largest participant in this market created through auctions, the CFE, as a public service provider for Mexican citizens in the Basic Service Supplier business line, acquired 14,224,983.55 megawatt-hours of electricity, 16,681,916.06 CEL, and 1,257.06 megawatts of power by the end of the operational year 2024.
Key Questions and Answers
- What is the current status of Mexico’s electricity market with private sector participation? The Secretary of Energy, Luz Elena González, has confirmed that the electricity market with private sector participation remains intact in Mexico.
- How do private companies participate in the market? Private companies can establish contracts with the Federal Electricity Commission (CFE) to sell energy, as permitted by the current law.
- What changes have been introduced in the new regulatory framework? The new regulations clearly outline private sector participation mechanisms and respect all existing valid contracts. Independent producers can build plants to sell energy to the CFE, with a new legal provision allowing the CFE to decide whether to retain the plant at the end of the contracted purchase period.
- What are the auctions in the Mexican electricity market? Auctions in the Mexican electricity market involve long-term supply contracts for energy, power or capacity, and Clean Energy Certificates (CEL) acquisition by the CFE as a basic service supplier within the wholesale electricity market (MEM) to sell to high-consumption users.
- How has the CFE participated in this market? The Federal Electricity Commission (CFE) is the largest participant in this market, acquiring significant amounts of electricity, Clean Energy Certificates (CEL), and power by the end of the operational year 2024.
