The heads of the largest business and energy management organizations in the country agreed that the 277 legacy contracts for self-supply and independent power producers (PIE) are on their way out, for which they questioned whether it is worth a constitutional reform to modify them now. they constitute only 15% of the energy at the national level.
On the second day of discussions of the Open Parliament towards the electrical constitutional reform, on Wednesday in the Chamber of Deputies both those who argued for and against the presidential initiative recognized that these schemes inherited from the 1992 legislation can be adjusted, although in 2013 they were given a validity that is limited to that of their contracts, with which they would later enter the market to sell, just like the new plants that would be built, such as those in the auctions, which could also be resumed with adjustments so that cheaper and cleaner energy is generated in the future.
José Abugaber Andonie, president of the Confederation of Industrial Chambers of the United Mexican States (Concamin), assured that “there can be improvements in the current scheme without a constitutional change, because we all know that opening the electricity sector greatly benefited the industry” .
In arguing against the presidential initiative to revoke existing contracts to renegotiate them with the CFE, recalled that today only 15% of the national generation corresponds to legacy contracts, with a tendency to drop because the permits are expiring.
In addition, the cheapest energy that the state company has is that generated by its IPPs and with this CFE has control of 70% of the electricity and the IPPs represent 18% of the company’s capacity, while 80% of its energy They sell it to the CFE and the rest with all the permits to the market, in addition to the fact that, like the self-supply contracts, there have been no new IPPs since 2013.
In favor of the constitutional modifications, Adrián Olvera Alvarado, director of the subsidiary CFE Generación V, explained that the self-supply companies bequeathed by the 1992 regime commit fraud against the law, and it is enough to consult the CRE page, where there are one dollar capital companies where the generator has 99% and the rest its hundreds of partners. There are currently 243 plants under this scheme, but they have 77,767 clients.
“They constitute an economic affectation for CFE of 10,000 million pesos per year because they enjoy a privileged office, they benefit from stamp-type porting for generating without greenhouse gas emissions, although only 72 of these plants are renewable and cannot sustain a continuous operation, they do not participate with related services causing instabilities in the network”, he said.
Likewise, it also attacked independent energy producers, since in 1992 the CFE to buy energy at PIE for 25 years scheme in which there are 34 plants with 16,051 megawatts installed; 28 are combined cycle and only six plants are wind and generate 613 mgawatts, while the combined cycles are gas and eight plants also run on diesel and “also pollute”.
In addition, the CFE pays them the fixed charges even if their plants are not dispatched, there are clauses in which the risks pass to the CFE, such as fortuitous cases, in addition to the cost overruns being transferred to the CFE, with fixed charges for capacity. , increasing and in dollars. The day of
, the IPPs are four consortiums that practically constitute the oligopoly of these legacy contracts and they are: Iberdrola, Mitsui, Naturgy and Saavi.
“There is no competition but an arrangement between foreign private companies to take over the market and disappear the public company that is the CFE and that belongs to all Mexicans,” said the director general of the CFE, Manuel Bartlett, regarding these two schemes. .
Window for long-term auctions
Eleazar Castro Pérez, independent consultant on energy matters and supervisor of the execution of the energy auctions of the past six-year term, explained that in the long-term auctions for the acquisition of energy, power and clean energy certificates (CEL) hundreds of variables to maximize buyers’ savings, which is why the system was so competitive and so successful, with the cheapest energy prices in the world, available at that time to the CFE.
In addition, a technical institution, which was the National Polytechnic Institute (IPN), validated the results of the auction, favoring transparency and curbing the possibilities of corruption, something very necessary in a country like Mexico.
He explained that we then have secure energy for the next 15 years, guaranteed for buyers, and a firm business, even at low prices, for sellers. And he assured that in the fourth auction, the one that was cancelled, 40% was going to be bought by private parties, no longer at the risk of the CFE.
“Auctions are not perfect, they can improve with adequate and prior social and environmental evaluations, with purchase offers by regions and not only national ones, with interconnection studies before their execution and adding related services such as energy storage to the auction if we want integrate many more renewables, which is a very big challenge”, said the specialist.