Insight

The new strike on Mexico’s energy sector: AMLO’s reform initiative to the Electricity Industry Law

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04 February 2021

The new strike on Mexico’s energy sector: AMLO’s reform initiative to the Electricity Industry Law

Report summary

On 1 February 2021, President Andres Manuel López Obrador issued an initiative with preferential processing to modify the Electricity Industry Law (LIE) created with the energy reform. This modification goes a step beyond the SENER’s reliability policy issued in 2020, risking self-supply and auctioned projects, Independent Power Producers, and Clean Energy Certificates (CELs). Although the Nation’s Supreme Court of Justice invalidated key provisions from last year’s policy, the President intends to have the amendments approved by Congress, allowing him to continue with his purpose of strengthening the national utility and securing a 54% (or higher) market share. However, this would lead to a new wave of national and international legal procedures. This insight analyses the proposal’s main points and provides our view on their potential implications on the market and renewable investments.

Table of contents

    • To modify the economic dispatch logic to prioritize CFE’s generation over private participants
    • To establish that the granting of permits is subject to the electrical system planning criteria issued by SENER
    • To modify the criteria to determine who is entitled to receive CELs
    • To eliminate Basic Service Suppliers obligation to procure new energy only from auctions
    • Force the CRE to revoke self-supply permits when constituted under fraudulent actions and review the legality and profitability of contracts with Independent Power Producers (PIE)
  • Conclusion

Tables and charts

This report includes 1 images and tables including:

  • Monthly Local Marginal Prices by region

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  • Document

    The New Strike On Mexico’S Energy Sector PR

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