State company CFE is already building a solar park in Puerto Peñasco and has four more planned in the same region, as part of the so-called Plan Sonora. It has also expressed its intention to invest in wind power plants, without any details in this regard having been formalized so far. But for now, all such generation falls into private hands.
But renewables went from representing 13.1% of the electricity generation park in 2021 to 12.3% last year.
“The year 2022 was marked by the volatility in the price of natural gas. Within this context and in the current regulatory environment, solar and wind generation decreased in Mexico for the first time, based on an annual comparison. The decrease in generation from renewable plants and other technologies was offset by natural gas and coal-fired plants,” says the Mckinsey consultancy in an analysis based on the operator’s data.
Natural gas generation continues to be the most predominant in the country, with 58% of the market, according to an analysis by consulting firm Fresh Energy.
But the surprise came from the coal-fired power plants: CFE, which is the only market participant with coal-fired power plants -with three in the country-, increased electricity production using this method by 63% in just one year. The federal government has stated since the beginning of the six-year term its intention to increase the use of state company assets, mainly those that work with this fossil fuel.
The increase in the use of coal-fired power plants in the country is in line with a global trend. The forecasts of the International Energy Agency (EIA), made at the end of last year, pointed out that during 2022 the world was heading to set a new record in the use of coal as a source of electricity generation. . The increase has occurred as a result of the instability of the natural gas market – the most used for this purpose. The price of fuel increased resoundingly as a result of the war between Russia and Ukraine, which generated in the European markets the need to look for more fuel suppliers. And so coal became an emergency fuel.
But beyond the external factors and their effects on the domestic market, the regulatory actions implemented by the federal administration had an effect on the electrical dynamics that had an impact on the decrease in the use of renewable power plants and an increase in the assets of the state-owned company. CFE. The Fresh Energy consultancy analysis also speaks of an increase in the company’s market share in electricity generation activities: The state company had a 40% share last year, as part of a continuous recovery since 2020 when the figure was 37%.
Analysts talk about the implementation of some of the points included in the reliability policy published by the Ministry of Energy in 2020, which for now remains detained in court.