Mexico power watch: Ebrard praises renewables, distributed generation regulatory changes

Mexico's foreign minister and potential 2024 presidential candidate Marcelo Ebrard said the country should increase its clean energy output dramatically to ensure local products comply with international environmental standards.

According to the official, who is part of the Mexican delegation to the COP27 summit in Egypt, he has scheduled a meeting with US climate envoy John Kerry to discuss an "expansion of clean energy production in Mexico."

Mexican authorities have been slowly changing their tune regarding clean energy in recent months amid ongoing USMCA negotiations with the United States and Canada, who have said Mexico's anti-renewable policies breach the trade treaty and could take their case to an arbitration panel.

The new approach accompanies a change in attitude by public power company CFE, which over the past year switched from arguing intermittent wind and solar generators jeopardized system stability to announcing a long-term renewables investment plan. The plan includes five solar plants and one wind farm, as well as nuclear and geothermal expansion. Its foray into wind and solar may involve a deal with private sector players, CFE said.

New finance minister Raquel Buenrostro has also softened her stance recently, stating that "negotiations and commercial agreements that favor both countries [the US and Mexico] are a necessity and an imperative. Mexico is not at all interested in confrontation."

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A new set of rules being proposed by energy regulator CRE to oversee Mexico's distributed generation segment could make changes to the way injections are tallied and compensated.

The new proposal, which is currently out to public consultation by regulatory improvement agency Conamer, seeks to replace the net-billing and net-metering payment frameworks with a new scheme, consultant Víctor Ramírez Cabrera wrote in local outlet Energía a Debate.

According to Ramírez, it was expected the net-metering model would be changed as it compensates the injected energy at the same price as that provided by the utility, so it can cause the distribution firm losses when the expensive night-time power it provides is cancelled out by the cheap daytime energy injected by solar panels.

The regulation proposes an alternative net-billing scheme, he said, where injected and supplied energy are both tallied at the cost for their respective time of day.

"This project for a new methodology, instead of only limiting net metering (which was the logical approach) creates a new compensation model with a cost different from the market," Ramírez wrote. The cost would be calculated based on what the power distributor paid for its own energy purchases. CFE is the only power distributor in Mexico.

Inevitably, and depending on whether the price is set higher or lower than the local marginal price of the system, either the utility will subsidize distributed generators or the other way around, Ramírez argued.