When a fight erupts between a populist head of state and the business community over renewable energy, you might expect the leader to take the green side of the debate. Not in Mexico, where President Andres Manuel Lopez Obrador has recently taken steps that would block some existing wind and solar power projects and make it harder for new ones to get going.
1. What’s happened?
On May 2, the nation’s grid regulator, known as Cenace, indefinitely halted the testing required before new clean-energy plants can go into operation, blaming the coronavirus. In mid-May, Mexico’s Energy Ministry fast-tracked a set of rules that would expand its ability to limit production, add new tests for solar and wind projects and give Cenace the power to reject new plant study requests.
. What impact did this have?
3. Why is the government doing this?
The major justification for the new rules is that Mexico must protect the integrity of the electrical grid. The government says there have been grid failures in southern Mexico, but so far has not identified any of the companies involved. An analysis by environmental think tank Plataforma Mexico Clima y Energia (PMCE) found no specific failures attributable to renewable generators over the month of April, when Mexico’s virus lockdown came into effect. In the eyes of many investors, however, the pandemic is only a pretext. They see the limitations on renewables as just another example of Lopez Obrador trying to stifle private investment in order to protect large, state-run companies, like public utility Comision Federal de Electricidad, known as CFE.