Transmission failures lead to massive two-hour power blackout in Mexico

Mexico City — The failure of two transmission lines in northeastern Mexico on Dec. 28 forced the national grid operator to shut down power supply in vast areas of the country, including the capital, for more than two hours in the biggest blackout in recent history.

On Dec. 28 at exactly 2:27 pm CST, one 400 kV transmission line between the power substations of Lajas and Guemez in the Northeast failed, said the national grid operator, Cenace, in a press conference. One minute later, a second 400 kV line between the same substations failed, causing a nationwide imbalance that forced Cenace to shut down power plants all around the country, affecting more than 10 million households in 12 out of the 32 states, plus some areas of Mexico City.

The total capacity of the plants affected was equal to 9.3 GW, almost 30% of the total demand in the country at the time, Cenace said. Full service was restored about two hours later, but the cause of the imbalance still has not yet been identified.

"We will review the failure very carefully, and will have all the details shortly," said President Andres Manuel Lopez Obrador on Dec. 29 during his daily conference.

Industry observers told S&P Global Platts that, although it is early to say, the problem is likely the result of technical issues in the transmission network, rather than something related to power plant outages.

Transmission is closed to competition and is controlled by CFE exclusively.

According to the analysis of the previous administration of President Enrique Pena Nieto, the country needed at least two new major transmission lines that had been scheduled for public tender. The tenders were cancelled by the current administration. The analysis also showed multiple other minor grid improvements were needed to make it more robust and reliable.

CFE is not responsible for the blackout, said President Andres Manuel Lopez Obrador during his Dec. 29 morning press conference.

"CFE is in good shape and these types of events will not be repeated," said the president. He also said the efforts by his government to strengthen CFE are paying off, and that if nothing had been done, the blackouts would be a constant problem.

President Lopez Obrador has made CFE one of his top priorities and has implemented a series of regulatory moves to ensure the utility gains back some of the market share it lost in power generation after the market was opened by a 2013 reform. His administration announced a set of infrastructure projects that will reactivate the economy. CFE has been the main beneficiary with investments in new plants and works to upgrade the existing ones. CFE projects will require total investments of more than $3 billion over the next four years.