Mexican Solar & Wind Projects Come To A Standstill

• CENACE has stopped grid connection process for all clean energy projects in Mexico
• It has cited COVID-19 as the reason for this move but has left out older non-renewable energy projects of state utility CFE
• The directive will remain for an indefinite period jeopardizing the prospects for clean energy in the country
• CCE has slammed CENACE for issuing the directive that has no justified legal basis; it has threatened to approach the legal system against the decision

Clean energy projects in Mexico, including solar, have fallen prey to COVID-19 pandemic as the country's system operator Centro Nacional de Control de Energia (CENACE) has stopped all operations and critical tests for these projects with immediate effect – and worse, even for an indefinite period.

A Bloomberg article referred to a CENACE statement issued last week to claim that the agency has indefinitely suspended critical tests for new clean energy projects that would have allowed them to be grid connected, citing the pandemic as the reason for the move. Preoperative tests of renewable power plants have also been stopped for now as well as those measures that lead to increasing reliability of the electrical system.

Older non-renewable projects of state utility Comision Federal de Electricidad (CFE) have been left untouched though, which  has worried the renewable energy industry, according to Bloomberg.

Mexican business council Consejo Coordinador Empresarial (CCE) is miffed with CENACE for this move. In a statement issued on May 4, 2020, the CCE called the CENACE directive arbitrary and that it puts up barriers to competition and discourages the private sector while benefiting much more expensive and polluting power generation plants. Renewable energy generation in Mexico currently represents more than $20 billion of investment, it pointed out, while calling it an essential economic activity for the country's development.

"Without solid technical motivation or fully justified legal basis, CENACE has neglected its legal mandate to safeguard the efficiency of the National Electric System and competition in the electricity market, which negatively impacts thousands of consumers in the commercial and industrial sector," stated CCE. It has now threatened to take necessary legal measures to defend 'fair competition and the right of Mexicans to a healthy environment'.

However, the solar-friendly investment climate in Mexico has changed after the Obrador administration came into office in late 2018. Obrador's government is focussing on state-owned traditional energy companies, which has been negatively impacting the development of solar in the country.