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Constitutional reform to undo power liberalization to be presented in September: Mexican president


Proposal said to restore dominance of state utility CFE in power generation business

Strategy to reduce dependency on fuel imports on track

New Dos Bocas refinery to be completed on time in July 2022

  • Author
  • Sheky Espejo
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  • James Bambino
  • Commodity
  • Electric Power
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  • Wind energy
  • Topic
  • Mexico Energy Reform

A constitutional reform in Mexico to undo the liberalization of the power sector will be presented to congress in September, Mexican President Andres Manuel Lopez Obrador said Sept. 1.

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The Lopez Obrador administration tried to curb the participation of private players in the power sector to benefit CFE by modifying the law in March, but the modifications were halted in court. In June, the president said he had no other option but to change the constitution and promised to present his reform by the end of the year.

"This month, I will send a reform initiative that will allow us to repair the damage caused by privatization," the president said during his yearly state of the nation speech.

The reform will be the first of three major constitutional amendments planned before the end of the his term in 2024 and will restore the dominance of the state utility CFE, Obrador said.

After the liberalization began in 2014, private companies were allowed to produce electricity with newer, cleaner plants and now generate almost 50% of the power in the country, data from the state utility CFE showed. Companies using solar and wind technologies managed to install roughly 12 GW in the country through international auctions.

Mexico's power demand in 2021 is expected to remain steady year on year around 44 GW, data from the energy Secretariat, SENER, showed, as the economy slowly recovers from the pandemic. The country reached record demand in 2019 at 47 GW, the data showed.

The government has made good in stopping the privatization wave started by the previous governments in all sectors, but most importantly, in the energy sector, the president said, emphasizing that his strategy will be focused on hydropower generation, which is clean and cheap.

The president also praised the results achieved so far in strengthening the state oil company Pemex, in particular in its refining business. The president highlighted the program to modernize the six existing refineries and the construction of a seventh refinery in the port of Dos Bocas in the state of Tabasco which will help the country reduce its dependency on imported fuels.

Mexico has increasingly depended on imported fuels to meet demand. At the end of June, imports of gasoline were 643,000 b/d, while demand was 779,000 b/d, data from the energy Secretariat shows.

"The Dos Bocas refinery will be finished on time in July 2022," the president said.