If the modifications to the Constitution on energy matters proposed by the federal government that limit private generation and ensure most of the market to the Federal Electricity Commission (CFE) are approved, the cost of generating electricity in the Mexican electricity system will increase 31.7 % minimum and up to 52.5%, which is equivalent to between 3,322 and 5,567 million dollars of additional costs.
This was projected by the Renewable Energy Laboratory of the United States (NREL, for its acronym in English), in its study Analysis of the Impacts of the Modifications to the Rules of Commitment and Dispatch of Units of Mexico, published this Monday. NREL is funded by the US Department of Energy.
The agency proposed three scenarios, all of increases in the costs of electricity generation and a quota in generation greater than the legal minimum 54% that the CFE would keep, if the modifications to Articles 25, 27 and 28 of the Charter are approved Magna, in which the federal government intends to return to the CFE the monopoly in electricity commercialization.
In the scenario of less participation of third parties and preponderance of the CFE -which may occur given the loss of interest of investors in the country-, the dispatch would practically leave out the independent energy producers whose contracts will be renegotiated, the CFE may reach 74.3% of electricity generation, while the cost of generation will skyrocket 52.5%, which implies an additional 5,567 million dollars per year.
In this scenario, a 30% increase in the use of natural gas for electricity generation will be required, and the use of fuel oil will increase 11 times. Meanwhile, the use of coal would increase 129%, and would imply a 65.2% increase in carbon dioxide emissions, according to the NREL.
In an intermediate scenario, the CFE’s generation would reach 52.5%, the independent energy producers would participate almost entirely, as they currently do by selling to the CFE, and even more contracts of this type could be signed, although the technology that used is not preferably renewable nor are environmental criteria considered for dispatch.
Finally, in the most moderate scenario, the CFE would keep the generation slightly higher than in the second scenario, since the state company would also be prioritized, although with less preponderance than in the third scenario, with that the CFE would have a participation in the generation and dispatch of between 51% and 57% of the energy, averaging the 54% that the Constitution would mark
In this scenario, in any case, the generation cost would increase by 32% (3,322 million dollars), while the consumption of natural gas would increase by 5.5%, that of fuel oil would increase by more than 800% and the use of coal would increase. 47.2 percent.
“The proposed and possibly approved amendments to Mexico’s power unit dispatch and commitment rules will likely increase the variable costs of electricity production in all scenarios. The increase could be added to electricity subsidies or passed on to consumers. “, concluded the NREL in its study.
karol.garcia@eleconomista.mx