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Transmission's future in Mexico

Alejandro Peraza

Electricity general director/Comisión Reguladora de Energía (CRE)

Published  Friday, October 9, 2009

As Mexico tries to develop its power sector with more renewable energies and more efficient generation, it must also look to modernize transmission infrastructure.

Countries like the US have begun discussing smart grids. Meanwhile, just south of the border, Mexico's power regulator CRE is only just now developing the rules to connect renewables to the grid, which is almost entirely controlled by state power company CFE. The huge transmission losses associated with widespread theft certainly do not help Mexico's power sector.

The question is how far behind Mexico stands in transmission development, and what it is doing to move forward. BNamericas spoke to Alejandro Peraza, CRE's general director of electricity, to hear his outlook for possible new developments in the transmission sector.

BNamericas: Could you give me more details regarding the draft for the rules of interconnection that the CRE is going to publish in January?

Peraza: They will be for renewable energies and cogeneration, but obviously it could be applicable to other technologies. But the reach of the law will be over renewable energies and cogeneration. We began drafting the rules recently. We hope to finish the draft in December, and in January present it to the people so they can begin to discuss it. There will be a presentation by the CRE to all interested parties, and aside from that there will be a public presentation by [federal commission for improved regulation] Cofemer.

BNamericas: What do you hope to see in the rules?

Peraza: I hope the rules will be very clear and transparent regarding how the system is going to operate for renewables so that everyone knows what they should comply with and what elements they can rely on to operate with renewables. I hope investors will be able to know from the beginning what the rules are, and that those rules will not change depending on the person with whom they are dealing, or the specific zone of the country in which they are operating.

Interconnection does not have to be a barrier. It should be done in the most economically feasible way while also taking care of the system and making sure safety is not affected. But we also should not be demanding that projects interconnect with an excess of resources. That is what the rules are all about.

BNamericas: No one in Mexico is currently talking about smart grids. How feasible would the implementation of a smart grid system be?

Peraza: It's true that no one is talking about it. It's true that the issue is not part of an existing project, but I think it is inevitable. Smart grids provide options that we do not currently have to make the electricity sector more efficient. So, I think it is inevitable. Mexico normally stays behind in decision making on new technologies... but it is inevitable that it will come to Mexico.

BNamericas: So why is no one talking about smart grids then? Is it simply not a priority at the moment?

Peraza: There are many urgent issues in the country, and a lot of times people don't have a long-term vision. There are not resources to tackle those visions. There are a lot of reasons, but it's certainly going to happen eventually.

BNamericas: When do you think it would be feasible or possible to start talking about smart grids in the hopes of future implementation?

Peraza: It's more to with whether the technology is being developed and perfected in the world. What normally happens in Mexico is that once it is commercially established, once it is known, the country can start looking at the issue.

BNamericas: Is it something that would improve the power theft situation in the country?

Peraza: There are a lot of measures to improve that, but you also have to resolve the problem of a lack of resources to implement them. Shielded cable, for example, and other things like that, which are very costly.

BNamericas: There was a proposal made by a lower house lawmaker to eliminate the respective domains of the state power companies CFE and Luz y Fuerza del Centro [LyFC] so that CFE could start operating in Mexico City and the surrounding areas. Do you see that as possible?

Peraza: They would have to change the current rules. I do not see a proposal in that sense. But the current union and company rules would need to change. That would be very complicated.

ABOUT THE ENTITY:

The CRE is Mexico's power and natural gas regulator.

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